Lukashenko says he may quit as president
Belarus hits EU with tit-for-tat sanctions
Belarusian police introduce colour-coded torture system for detained protesters
Kremlin publicly condemns Belarusian police brutality in hint of growing frustration with Lukashenko
Russian services PMI rises to 48.2, but remains underwater as recovery continues to slow
Russia to start mass vaccinations on December 7
Azerbaijan’s Aliyev calls on Armenia, Russia, Turkey and Iran to assist in creating Nakhchivan land corridor
FPRI BMB Russia: Sberbank releases a three-year transformation strategy to e-commerce concern
Ukraine’s banking sector continues recovery, but profits still lagging last year
Ukraine’s real wages up over 10% in October but have been stagnant in dollar terms for almost a year
FPRI BMB Ukraine: Public has confused opinions on resolving the Donbas conflict
Western Balkans plus Ukraine subsidised coal with over €900mn in 2018-2019
Estonian parcel robot firm Cleveron eyes €30mn state loan
Estonia’s chief auditor says €1bn in state COVID-19 loans issued haphazardly
Economic sentiment in CEE falls in November as recovery momentum splutters
Estonian animation studio Imepilt to hold IPO
Brighter days ahead: The economic bounce back in 2021
Central, Southeast Europe stock markets jump in anticipation of COVID-free future
VISEGRAD BLOG: An easing of trade tensions but still an uncertain situation for export-oriented Central Europe
Hungary's PM risks isolation as Poland mulls dropping EU budget veto
Poland ready to back down from veto of EU budget
Hungary's ruling party in damage control mode after MEP sex scandal bombshell
Poland’s PMI remains stuck just above the improvement line at 50.8 in November
Czech companies dominate this year’s Deloitte Technology Fast 50 CE
Coronacrisis to get worse before it gets better forecasts wiiw
EU diplomats say no chance of Bulgaria removing veto for Skopje to start EU accession talks
IMF says downside risks to Albanian economy are increasing
EU ministers fail to agree on launch of accession talks with Albania and North Macedonia
Western Balkans commit to green agenda and regional common market at Sofia summit
Bosnia’s opposition ousts nationalist parties in major cities
Bosnia’s main ethnic parties fight to hold onto power in local elections
Southeast Europe’s EU members to get biggest boost from next budget and recovery funds
Bulgaria imposes 3-week lockdown to slow down COVID-19 spread
CEE politicians highlight trade and security ties as they congratulate Biden
Breakaway Transnistria fully under Sheriff’s control as Obnovlenie party sweeps board in parliament election
Moldova’s presidential election is over, now the battle for the parliament begins
Moldova’s foreign policy reset
Russian establishment quick to congratulate Moldova's new president-elect
Rising COVID-19 cases put intense pressure on CEE healthcare systems
MEPs urge European Commission to act against Hungarian media financing in North Macedonia and Slovenia
North Macedonia mulls decriminalising cannabis to boost tourism
Retail surpass pre-crisis peak as Romanians shop instead of holiday
Romania’s stability election
Romanian venture capital firm Catalyst launches new €40mn-50mn fund for TMT
The state is back in business
Slovenian PM Jansa stands alongside Hungary and Poland in EU rule of law row
BEYOND THE BOSPORUS: Turkish number crunchers deliver November inflation surprise of 14%
Erdogan needs to go says analyst assessing Turkey’s economic collapse
Ukraine strikes deal with Turkey to produce killer drones instrumental in Karabakh conflict
In Karabakh deal, as many questions as answers
Protesters flood Yerevan demanding Armenia’s “traitor” PM quit over Nagorno-Karabakh surrender
Who emerge as the real winners from the bloody Nagorno-Karabakh conflict?
Below average 2020 wine production destined for volatile and uncertain global market
Iran calls on Saudis to limit $67bn defence spending to Tehran’s $10bn
Iranian prosecutors pledge to pursue Trump for Soleimani killing even after he leaves White House
No reaction from Kazakh elites as bombshell FT report says Nazarbayev’s son in law siphoned millions from pipeline scheme
UK court freezes $5bn in assets connected to fugitive Kazakh banker Ablyazov
Attack of the Debt Tsunami: global debt soars to a new all-time high
Kyrgyzstan's proposed new constitution provokes widespread revulsion
Kyrgyzstan's China debt: Between crowdfunding and austerity
CFC joins RWC in assessing KAZ Minerals buyout offer as under-valuation
China business briefing: Not happy with Kyrgyzstan
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
Mongolia’s wrestling culture: From the grasslands to the cage
No surprises in Tajikistan as Rahmon retains presidency with 91% of vote
A Tajikistan poised on verge of economic calamity set for vote
Tajikistan revives on-off dispute with Iran
Turkmenistan: The dammed united
Turkmenistan: Everybody yurts, sometimes
Dirty money investigation reviews identified payments worth $1.4bn linked to Turkmenistan
Uzbekistan unveils extensive privatisation programme
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Foreign chief executives in Moscow are becoming a rare breed, as a combination of cost-cutting and the need to play fast and loose with corporate governance make them surplus to requirement in a stagnating economy.
The ouster of Swede Bo Andersson at carmaker Avtovaz in March is the most prominent dismissal of a top foreign boss in Russia since 2008, when the head of oil producer TNK-BP Bob Dudley was sensationally expelled from Russian after his visa wasn’t renewed.
Andersson, a former General Motors and Saab Automobile executive and the first non-Russian to run Avtovaz, was sacked after losses tripled last year, but insiders say he was fired for trying to deal with the corrupt supply chain. Dudley, now the head of BP, left a joint venture between the British oil company and a group of Russian tycoons in 2008 after facing personal harassment.
The ranks of foreigners have been decimated at Russian investment banks Renassiance Capital, Sberbank CIB and VTB Capital, as well as at foreign banks over the past two years, while oilfield services company Schlumberger took the nuclear option of axing all of its foreign personnel in the wake of sanctions against Russia over its interference in the Ukrainian conflict. Now, the dwindling number of foreign senior executives working in large corporates in Russia are becoming increasingly paranoid that they could be next.
“I am 150% expendable in this climate, but I am hanging on for now,” the CEO of a large company with Russian and foreign shareholders tells bne IntelliNews. “I am still here simply because Russians don’t trust Russians to run the business – never mind foreigners not trusting Russians.”
Nick Rees, a Moscow headhunter and former Russia head for SThree, explains the cost of expat chief executives on a euro/dollar/sterling package can no longer be justified after the Russian ruble’s massive devaluation. The fall in the ruble is also affecting the attitude of CEOs to working in Russia.
“Expats on local currency contracts, which was a surprisingly high percentage, simply couldn't justify seeing their earnings halve in 12 months,” Rees tells bne IntelliNews. “Many took the position that they were here for the money, so it's no surprise to see them leave, but there are still a lot of long-term expats who are committed to Russia in the longer term.
“Some sacrifices will be made as companies become desperate to cut costs, so corporate governance and compliance could definitely become more of an issue until things pick up, especially within Russian firms,” he adds.
Foreigners at the top or on boards can provide leadership and genuine experience from other markets or lend a fig-leaf of respectability for oligarchs looking to list shares or tap the capital markets for bonds and loans. But many expats now are simply seen as a luxury as the country lurches into its second year of recession and with little sign of economic sanctions being lifted.
“If you put pressure on the system, something will crack and then you will have to paper over the cracks and corporate governance can take a back seat,” a senior foreign businessman, who sits on several boards in Moscow, tells bne IntelliNews. “Expats might have a bigger problem signing off on due process vis-à-vis their Russian counterparts.”
Not all foreign bosses in Russia can claim to be whiter than white. Some even go native, like the Swedish bosses of flatpack furniture giant IKEA Per Kaufmann and Stefan Gross, who were fired in 2010 for giving the go-ahead to bribes
Ingvar Kamprad, the founder of IKEA, told journalists at the time he “was heartbroken” about colleagues of 20 years deceiving him in the company’s worst corporate scandal in history. A former director of IKEA in Russia, Lennart Dahlgren, wrote a book about the incident titled, "Despite Absurdity: How I Conquered Russia While It Conquered Me”.
Russians are sometimes seen as preferable when the country is in crisis mode. Andersson got stick for being responsible for canning 15,500 of the workforce at Lada-manufacturer AvtovAZ whereas Russian Igor Komarov didn’t face such a wave of criticism when he performed the same level of cuts as CEO in the 2008-2009 crisis.
The new head of Avtovaz is also a foreigner, Renault's Nicolas Maure, but he will share authority with Sergei Skvortsov, a top manager at state holding Rostec, according to a Vedomosti report. Skvortsov is expected to call the shots and deal with all the delicate issues such as labour relations.
Some foreign institutions in Russia, such as US lender Citigroup, have never had a local chief. Czech-born Zdenek Turek, who ran Citigroup in Moscow for five years, told this journalist in 2013 that the New York-based lender “was grooming local talent” who will eventually assume the top job. It hasn’t happened yet. Turek was replaced by Frenchman Marc Luet, who is expected to step down in September after three years. Most banking observers say they would be pleasantly surprised if Citigroup chooses a local to replace him.
HSBC also prefers foreigners to run their business in Moscow. The British bank recently replaced Mark Stadler, an Englishman, with an Irishman, Malachy McAllister.
Goldman Sachs, Wall Street's most profitable investment bank, last year finally decided to trust Russian financiers to run its operation in Moscow after a decade with foreigners at the top. After reshuffling the deck, the bank said in September the business will now be run Sergei Arsenyev and Dmitri Sedov, albeit with Tim Talkington, an American, who will act like a chaperone to the two Russians.
“Having even one foreigner in a Russian company can be a big draw,” the European CEO of a large Russian industrial firm tells bne IntelliNews . “If there are foreigners at the top, Russians will want to work there because there is a segment of workers who want to work for international companies. Even if the company is Russian, they will have different expectations of standards if foreigners are at the top.”
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