PRIOR GROUP

  The Economist Overview

Stuart Prior

(graduate of Otago University 1972; New Zealand Ambassador to Russia 2003-2006)

Foreword

These notes are offered as a guide to help the New Zealander visiting or living and working in Russia to succeed as a negotiator or contribute to the success of his or her company or team’s negotiations with Russians, whether they are with private business or with the public sector. They are based on my personal experience of Russia (and the Soviet Union before it) over three decades.  Having worked in the New Zealand’s public sector for thirty years I moved to the “dark side”, establishing my own company Prior Group in 2006 to promote New Zealand’s business with the new Russia. Why? because of the  amazing opportunities for contributing, via business, to the development of this exotic, great country whose future shape matters to the world. I hope that the picture which emerges from these notes is of a country of present promise which is going through understandable and essentially normal processes of change. It is an exciting time to be here in Russia – it is hard work but it can also be a lot of fun. This is a country with the “wow factor”!

INTRODUCTION

Russia today is a true negotiators’ paradise. It is a “can do, must do” society, rather than a “can’t do, won’t do” society, and the question constantly asked is “why not?” rather than the negative “why?” But everything has to be negotiated.  Positions in the economy have to be fought for and won, defended, given up, fought for again and again, as the economic battles ebb and flow. If it sounds like a “peaceful war” – that’s what it is. The negotiating process provides as many ups and downs, twists and turns, tests of mettle - and tests of metal - as a negotiator could possibly wish for.  It gives wonderful insights into Russia and its peoples. You will have the chance of eyeball-to-eyeball confrontations with proverbial “bad cops” and subtle and elegant negotiations with proverbial “good cops”.  The funny thing is, they almost always are singing from the same song sheet. You will learn that there is almost certainly a “good cop-bad cop” genetic marker which sets Russians apart.

New Trade Minister for New Zealand

  New Zealand's new Prime Minister, Mr John Key, announced his new Government on 17 November. Mr Tim Groser has been appointed Trade Minister, Minister of Conservation and Associate Minister of Foreign Affairs. Mr Murray McCully is the new Minister of Foreign Affairs. Mr Groser is ranked twelfth in the twenty-person Cabinet. One of New Zealand's most experienced and respected international trade negotiators, Mr Groser is expected to play a leading role in shaping the new Government's international trade and economic policy and will also contribute to policy on Climate Change, for which he is an Associate Minister responsible for international negotiations. His appointment has been widely welcomed by businessmen in New Zealand and abroad.

   Mr Groser has significant experience of, and interest in, working with Russia. In 2003,  with Mr Stuart Prior, then New Zealand Ambassador to Russia, Mr Groser was lead negotiator for the New Zealand - Russia bilateral goods agreement for the World Trade Organisation. This was the first such negotiated agreement to be signed in Russia's long WTO accession process. Observers at the time noted that this initiative helped to give impetus to a number of Russia's other bilateral WTO negotiations.

    The Show Goes On! Eurovision Safe From Crisis

     Russian Deputy Prime Minister Alexander Zhukov said most of the money will be spent on making sure the Olympisky Stadium has all the necessary mass media equipment to provide "beautiful images." The First TV Channel will broadcast the event and is the main organiser.

Last year, Russia won the Eurovision title with Dmitry Bilan's ballad "Believe", thus gaining the right to host the next contest.

September 2008

    Russian Finder's Fee for Foreign Investors

Russia’s growing elite

     The fortunes of Russia's elite have been growing rapidly, supported by high commodity prices, strong foreign investment and rapid economic growth. Russia is now considered one of the most promising luxury markets in the world.

Issue 

Russia's economy has boomed in recent years averaging 7.3% annual real GDP growth between 2003 and 2007:

• - Between 2000 and 2007, the average annual disposable income of the 10% richest households (decile 10) grew faster than those of any other income group, reaching US$34,741 in 2007. This means that decile 10 households possessed 31.2% of the total disposable income in 2007, up from 25.4% in 1993;
• - In 2008, Russia could boast between 87 and 101 billionaires, placing it second in the world after the USA.

Percentage of household annual disposable income by decile: 1993-2007

Source: Euromonitor International from national statistics