Summer School For Would Be Capitalists

The Russian bankers weave their way from a quiet computer room, past racks of clothing, to a steamy factory floor. The scene isn't so different from one in a Russian textile plant: Dozens of women are hunched over humming machines. But here, each piece of cloth has been precision-cut from computer-generated designs. And workers are paid for each article of clothing they finish rather than getting an hourly wage, as is common in Russia. "Here we get ideas to improve our business," says Vladimir Evsioukov, a general manager for a Bryansk-based TV-tube manufacturer, as he watches one of the workers sew sleeves onto a gray flannel suit coat.

Evsioukov and 22 other Russian financiers came to the U.S. to learn about capitalism, American-style. They arrived at Dulles International Airport on Apr. 10 for a 12-week crash course in the basics of American business and government. The program, sponsored by the Treasury Dept., private foundations, and George Mason University in Fairfax County, Va., was intended to train Russians in America's best business practices and help them establish contacts to spur business back home. Vladimir Iljin, a 40-year-old Moscow banker, sums up the overarching problem: "How to get foreigners to put money into Russia. It's a key question in our country now."

The course was an intensive one. For six weeks, interns took field trips and clocked 160 hours of classes in accounting, banking, and financial practices at GMU. They got six weeks of on-the-job training at banks, insurance companies, and in the nearby government offices of Montgomery County, Md., studying everything from the economics of parking meters and government-backed loans to computerized payment systems.

"ALL IS DIFFERENT." What the Russians see at the JoS. A. Bank Clothiers plant in Hampstead, Md., impresses them. Says Igor Chinyonov, 36, an accountant for a bus manufacturer in Chelyabinsk: "All is different here." His colleague, economics professor Olga Onoshko, agrees, as she watches a piece of cloth become a jacket. "The U.S. economy is focused on pleasing customers," she says. "In Russia, customers exist only for the industry--it should be the ether way around."

Fear of civil unrest and the instability of the Russian economy prompted the Treasury Dept. to launch the internship program. Treasury officials who traveled to Moscow in February, 1993, to teach banking practices at the All-Russia Academy for Foreign Trade came home troubled: They had found empty shops, paralyzed city governments, and a populace that had lost faith in the economy.

The Treasury Dept. figured that transplanting Russians to the U.S. for hands-on business experience would be the fastest way to train would-be capitalists. This year's summer school is only a tiny step, but it could help forestall Russian extremists from taking more radical action, such as a return to a planned economy. "You've got to do this with tens of thousands of people for any real change to occur," says a Treasury official.

For Iljin and his colleagues, adoption of even rudimentary American practices is fairly radical stuff. Iljin is deputy chairman of the board of Innovation Bank Technopolis. But when he was assigned to First Union Corp. in Washington, it was his first brush with the notion of collateral. In Russia, there are no property rights, so the only security for a loan is the borrower's reputation.

TOUGH SELL. Iljin also saw how government financial support can spur everything from small-business creation to home ownership. He marvels at the Small Business Administration, which guarantees bank loans to would-be entrepreneurs. "In Russia, we have no such thing," he sighs. Iljin is hoping to launch a pilot project like the SBA back home.

Getting the private sector to lend to Russian entrepreneurs may be hard, notes Iljin: Russian businesses have a habit of not paying bills. And while Vladimir Evsioukov thinks the American idea of a commission plan could fire up his sales force, he realizes that such a scheme must be tailored to the realities of Russian business: Commissions will be paid, he says, only when the money for an order is actually collected. It is an untested concept, true. But, he says, "you have to be very flexible to survive." Seems like the first lesson in capitalism has taken hold.

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