[This article was first published by The Times of London]
In Zero Sum, Charles Hecker reveals the hubris, greed and gullibility of the Western investors who flocked into Russia to make big bucks
Dud lightbulbs on sale in a Moscow street market summed up the Soviet Union in its collapsing years. Working ones were unavailable in shops, so if you needed light at home you stole a bulb from your workplace and replaced it with a dead one, bought if necessary. The vignette, one of many in Charles Hecker’s book on post-communist Russia, encapsulates the inventive, cynical and self-destructive mentality that thrived as the planned economy collapsed.
On paper, that era passed. Business life became increasingly normal in the 1990s. Western investors thrived in a vast country blessed with limitless natural resources and a colossal appetite for consumer goods and services. “Opportunity was everywhere,” Hecker writes in Zero Sum: The Arc of International Business in Russia. Western expats whose lives revolved around the Radisson Slavyanskaya business complex, with its serviced offices, swimming pool, cinema and bustling restaurants, all vividly described by Hecker, could believe they were in any other emerging market.
But the westerners were willing, well-paid accomplices in the construction and population of a Potemkin village. Crooks, goons and cronies flourished behind the façade of democracy and capitalism. This was exemplified by the oh-so-convenient Radisson. Its nickname was the “Chechenskaya”, an allusion to the Chechen art collector Umar Dzabrailov, who owned it. His American business partner, Paul Tatum, died in a hail of bullets in a nearby underpass after a lengthy and bitter business dispute (Dzabrailov has always denied involvement and a police investigation proved inconclusive).
Such incidents were rare. Most westerners were untroubled by crime or conscience, feasting at fleshpots and making extraordinary profits. Fleeting contacts with the criminal netherworld provided only a “slight electric charge”. What really happened behind the scenes was a story that they preferred to ignore — until the Russians had the final say and the last laugh.
Hecker begins his book with this: the foreign business elite’s Napoleonic retreat from Moscow after Russia’s invasion of Ukraine in February 2022. Frantic packing, exorbitant air fares, hurried goodbyes and emergency liquidations marked the unexpected end of an era that, for some, involved three decades of life in Russia.
The overall loss for European businesses from leaving the Russian market was more than €100 billion, and almost nobody saw it coming. “What did we miss? And what did we really know?” These questions launch Hecker into a mix of autobiography, management studies and cultural anthropology.
The author’s career in Russia started in journalism and ended in corporate intelligence. He has interviewed scores of witnesses and participants for his chronicle of the rise and fall of western business in Russia. Unfortunately for the book’s flow, he feels obliged to quote them all, often with stunningly banal observations. He also backs up his story with contemporary reportage from foreign newspapers. A tougher editor would have excised most of this, leaving a punchier book.
His first-hand observations are more interesting. A description of the “metallic human warehouse” of Sheremetyevo, Moscow’s main airport, suggests that a second career as a travel writer may be looming. A “grimy funnel” for arriving passengers, with its floors of “sullen, mottled granite”, it shaped first impressions for a generation of western newcomers to Moscow. One longs for more such insights rather than yet another verbatim extract from a New York Times report about a long-forgotten scandal.
Hecker describes in detail the snares and pitfalls that everyday life in Russia provides for the unwary, and the evolution of countermeasures, from tolerating theft and paying bribes to hiring well-connected locals and being (at least on the surface) squeaky clean.
Readers impatient with the hubristic, greedy world he depicts may find themselves cheering its nemesis. The Putin regime and its cronies confiscated the businesses the foreigners left behind, a satisfying revenge for the headlong, humiliating privatisation of the 1990s in which outside investors snapped up the crown jewels of the Soviet economy.
The book’s conclusion is bleak and correct: modern Russia was cursed, probably fatally, by its totalitarian and imperial past. No post-1991 ruler “laid [a] brick in building durable, transparent, public-facing institutions”. Westerners who failed to notice this were at best culpably naive and optimistic or at worst greedy.
As the Moscow bureau chief of The Economist from 1998 to 2002, I battled a “rah-rah chorus”, as Hecker calls it, of businessmen, bankers and their associated grifters and fixers, but also diplomats, academics and think-tank types, all of whom had an interest in keeping the gravy train rolling. This was dressed up with highfalutin ideas about a growing, democracy-minded middle class and the irrevocably peace-making effect of trade. To argue that the ruling elite was corrupt and brutal, the rule of law a fiction, revanchism was ingrained and Russia a menace to its neighbours was deeply unfashionable and potentially career-killing.
We are paying the price for that and so are the Ukrainians. The gilded, patronising people whom Hecker describes must take a big share of the blame.
Photo Credit: Nikita Karimov on Unsplash