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| Yulia Barabasheva: A Moscow businesswoman, she works 12-hour days at her new beauty salon– sometimes closing up shop at midnight.
She feels intense responsibility for her 14 employees, who, she says, have become like a family to her. Melanie Stetson Freeman - staff |
Putin generation: Opportunity – and corruption – test a young entrepreneur
Yulia Barabasheva puts in long hours at her beauty salon, which she opened last April.
from the February 27, 2008 edition
Page 3 of 4
According to Transparency International, a watchdog group based in Berlin, corruption has increased slightly in Russia since 1999 and the country is now ranked 143rd among 179 countries profiled. Its national business environment ranking – compiled by the World Economic Forum's Global Competitiveness Report – has also fallen since 2001, from 56th to 70th, though most of that is due to the addition of new countries. In addition to corruption, the report cites tax regulations, bureaucracy, and inflation as some top concerns.
So despite a flourishing economy, Barabasheva and others say starting a business is still tough – even once it's up and running. And according to the liberal Levada Center, young people believe it's connections (49 percent) – more than talent (38 percent) – that enable one to succeed in Russia today. There has also been a marked drop in the percentage of young people who see hard work as integral to success, falling from 60 percent in 2002 to 48 percent in 2006.
Misha Sagiryan, the young owner of two fitness clubs in Moscow, says he used his partner's connections to resolve things when police took his computer to check if everything was "correct." He took the same tack when the antiterrorist unit visited to ask about reinforcing the windows.
"There are always things like that," he says. "In my business plan, I have the line 'solving problems' " – keeping officials happy with gifts and perks.
Igor, the director of a legal-consulting firm and a former government employee, writes that into his budget, too. "Everyone has it," he says, laughing. Still, local authorities can't meddle the way they used to, he says, citing his firm's successful resolution of a bankruptcy case in which local officials had tried to personally benefit from the company's demise.
"It's a very good example; it answers the question, 'Are authorities interested in promoting business?' " he says. "My point of view is there is more order, especially at the federal level."
But Barabasheva doesn't feel protected from the law. She plucked her staff primarily from the salon where she used to work, an outfit owned by three ex-criminals who failed to inspire loyalty.
"That salon is 20 years old and people have connections, possibly at the level of local administration. The consequences could be quite great," worries Barabasheva, who says she didn't lose a single client in the transition. "I consider myself lucky enough already, but as I know these kinds of people, I think they might just be waiting."
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