What about Russia?

 I had one trip to Russia in 1998, almost at the end of the Glasnost and Perestroika initiatives, just before Putin came to power.

Harlequin had sold large numbers of books to Russia, in Russian, in the years after the Berlin Wall had come down.

The question was: How were we going to extend the business?

I was accompanied by Barbara, our Russian-speaking and very competent Managing Director of our Polish operation. She had an abiding hatred of all things Russian.

I had the benefit of a large amount of research that had been done in the previous year by a well-known US consulting firm, making recommendations as to how we might proceed.

I engaged a very professional, ex-KGB agent to see what he could find out about the thirty distribution businesses recommended by the research. I did not understand why our books were being sold for less than what it would cost to print them.

We had been warned that the Russian economy was about to collapse.

Bertelsmann, a leading German publisher had a large distribution facility in Yaroslavl a city about a three-hour drive northeast of Moscow. They were keen to contract us to use this facility.

We left Moscow at six am having no time for breakfast.

The road for the first hour or so was a well-constructed, smooth, tarred road. This was the area where the ‘leadership’ had their country estates or dachas. After that, the road deteriorated and became uneven and rough. We passed through many poverty-stricken villages with no apparent shops, pubs, or facilities of any kind.

Not having had breakfast I asked if there was any place where we might get a coffee and a bun. Eventually, the driver stopped and pointed to a very poor-looking spot on the side of the road as we entered Yaroslavl. The driver notably stayed in the car. We did indeed get a coffee and a bun, which cost almost nothing. The most striking thing about the place was the intensely hostile atmosphere in the café. It was clear that the locals did not want to see reasonably well-dressed Westerners anywhere near them.

We eventually found the place we were looking for, having driven around Yaroslavl. Moscow looked reasonably well to do; Yaroslavl looked poverty-stricken, with gray-faced people wandering the streets.

When we found the place we were looking for I had to almost climb through a doorway to be confronted by a man pointing a large, fearsome-looking revolver at me. “Passport!” he yelled.

We fetched our passports and were then pointed along a passage where over decades, even centuries, seemingly hundreds of feet had worn a depression down the middle of the passage. We were then directed up some stairs where we suddenly found ourselves in a place that could have been in West Germany, with clean toilets and a large office with perhaps a hundred or so, well-dressed women all furiously typing away- entering book orders into their system.

We were ushered into a boardroom where we met several German executives, all wearing suits. During our discussions, they explained that they each spent three weeks in Yaroslavl, before returning to Bertelsman headquarters in Gutersloh, for a week’s respite. They had taken over the top floor of a nearby hotel, completely refurbished the place and had their own chef etc.

We were then taken to a very well-appointed, automated facility where orders we had seen being processed were packed and dispatched. All very impressive.

On returning to Toronto about six weeks after our visit I received a very professional report from the ex-KGB agent. The main point in the report was that twenty-nine of the thirty distributors recommended in the report had ‘criminal connections’, i.e. they were dealing drugs. No wonder they didn’t have to worry about the prices of books-the book distribution business was obviously just a front.

Needless to say, we did not pursue any further expansion of our Russian business; in fact we closed it down.

The Russian economy collapsed shortly after that, so we would have lost the lot if we had invested any further in that operation.

Russia by then had become a ‘haven’ for the Oligarchs, who seemed to steal the place blind and then invest their ill-gotten gains in Western Countries.(ref: ‘Red Notice’ by Bill Browder). After all, they wouldn’t want to invest in Russia-it might be stolen.

The Ukraine war has not improved my view of Russia. For all the great potential it has, it is run by a gang of crooks.