Business Philanthropy, Soviet-Style
Vladislav Konovalov plans to make millions of rubles - so that he can help needy people. INTERVIEW: `PERESTROIKA' ENTREPRENEUR
LENINGRAD — THERE'S the old stereotype of the average Russian as all heart and no initiative. And then there's Vladislav Konovalov. He's not lacking in heart, to be sure. A television commentator whose program, ``The Fifth Wheel,'' is well respected among thoughtful Leningraders for its intelligence, feeling, and insight, he uses his two-hour late-night shows to highlight social problems.
And now that Soviet leader Mikhail Gorbachev has lifted the lid on private initiative, Mr. Konovalov is bubbling over with inventive ideas for helping solve the problems he's been airing.
In a two-hour discussion at a friend's apartment one rainy afternoon here, Mr. Konovalov, speaking through an interpreter, laid out plans for his latest venture. Along the way, he provided a rare glimpse into one of perestroika's newest phenomena: the Soviet entrepreneur.
His venture began, he says, with some ``Fifth Wheel'' programs he did on the problems of aging pensioners who live alone. Soviet citizens, he explains, can retire at 55. But even if they live with their families - which many do, given the acute housing shortage here - the small pension they receive is barely adequate.
``If an average wage in the Soviet Union is 140 rubles a month,'' about $233 at official exchange rate, ``and a person gets a pension of 36 rubles [$60] a month, he's in a desperate situation,'' he says.
The problem is particularly acute in Leningrad, where about 60 percent of the population is of pension age. Until recently, the government failed even to acknowledge the problem - since, says Konovalov, ``there was no such official category or even concept as poverty.'' Last year, however, the government announced that one-third of the nation's 58 million pensioners live on less than 58 rubles ($95) per month. Unofficially, economists here set the poverty level at about 75 rubles ($125) per person per month.
After one of Konovalov's programs last October, the mayor of Leningrad contacted him and praised his efforts. ``The only way out for the mayor,'' explains Konovalov, ``was to try to get an increased budget from the state. But in the complicated situation in which the Soviet economy now finds itself, that's not possible. So there had to be a radical change in the way that we approach the problem.''
That was just the opening Konovalov wanted. Putting on his entrepreneur's hat, he laid out a series of business plans that would send an American venture capitalist reeling. His idea: Establish a firm called Chelovek (``man'' in Russian), the earnings of which - from various business ventures - would be dedicated to helping elderly and infirm pensioners.
``I came to [the mayor] with a prepared social program and a commercial program,'' says Konovalov with a smile, ``and got his full support. I asked for only one thing: unlimited credit, and defense from the bureaucrats.'' So taken was the mayor with his proposal that the City Soviet (city council) gave the plan the go-ahead three months later. ``For us,'' says Konovalov, ``that's fantastic speed.''
The aim, he explains, is to take 50 percent of the firm's earnings and plow them back into the company. The other 50 percent are to be distributed to pensioners, with guidance in the selection process from a newly formed group, the Leningrad Society for the Handicapped.
In fact, the social side of the equation is already in operation. ``Since I'm known as a television commentator who's concerned with these social problems,'' he says, ``I get vast amounts of mail from people with requests for aid. At the same time, I get letters and telephone calls from people who volunteer their services to help.''
So far, he says, some 300 volunteers are in action - caring for the sick, shopping for shut-ins, and providing the human contact that helps overcome the sense of isolation.
``This aspect of the activity of the firm is for me personally more important than the commercial part,'' he says. ``But the commercial part is necessary.''
The first venture, says Konovalov, involves the publication of a book on sex education. The problem, he explains, is that ``in the Soviet Union the level of knowledge on that question is zero. We've never had discussions of that, and never had anything published on it,'' at least not for broad distribution.
The book, titled ``Sexual Life,'' will be published in July under agreement with a state printing organization in a first printing of 300,000 copies - a substantial print run by Soviet standards. It will sell for 2 rubles ($3.30) a copy. Konovalov's plan is to print 5 million copies, which he says will produce a profit of 7.5 million rubles ($12.5 million).
The second venture involves a partnership with foreign firms to build a first-class business hotel - complete with conference rooms, communications and copying facilities, and restaurants - catering to the overseas business visitor. The city has already provided Chelovek with a site: a run-down but architecturally valuable building at 54 Hertzen Street, which he plans to gut and rehabilitate.
Konovalov is deep in negotiations with several construction firms in Italy, Finland, the Netherlands, and the United States, with a decision to be made by next week. For collateral, he says, he is offering ``the whole faith and credit of the Leningrad City Soviet.'' Why is the city willing to provide such credit? Because, says Konovalov, ``we're helping the city solve a social problem.''
So far, Chelovek has five employees - including co-president Tatyana Bondarchuk, who was the assistant director of a local electrical firm. ``She really knows finance and economics,'' says Konovalov.
What's does Konovalov see ahead?
``We're planning for the first year of our activity - a year from this spring - to give us 15 million rubles of income.'' By the second year, he expects it to rise to 24 million rubles.
``I know that this sounds fantastic and dilletantish,'' he says, ``but it's based on very strict calculation.''