Nathan Hunt (aged 49) was born in Nebraska (USA)), and is an American citizen. Graduated from the Russian Studies Department of Yale University (New Haven, Connecticut, USA).
Been living in Moscow since 1992. Was President of his own consultancy company Skylight Inc. Set up the US Meat Export Federation’s first office in Moscow.
From 1996 till present: member of the Board of Directors of theCanada Eurasia Russia Business Association (CERBA). 2009-2013: Chairman of the National Board of Directors at CERBA. 2001 till present: Chairman of the Board of Directors of the Moscow Chapter of CERBA.
Director of the Russian Representation Office of the Canadian meat/dairy trading brokerage Ronald A. Chisholm Limited. Member of the Board of Directors of the Russian real estate developer corporation “Housing Capital” Group. Representative in Russia of Australia’s Monash University, supervises its links with the Russian Academy of Sciences.
Fluent in Russian. Married, with a son and daughter.
— Mr. Hunt, you became the head of CERBA in 2001. Then, it was still called the Canadian Business Association in Russia (KDAR). But since 1996, that is from the moment it was founded, you went onto its Board of Directors…
— That’s not quite the case. When exactly KDAR was formed, I cannot say precisely. But in the 90s it was a small organization. And after the default in Russia of 1998, it was left virtually without leadership. The members: you could count them on both hands. There was talk of closing it down. But I began to protest: why? Let’s attract some new members. So they suggested I take charge.
We started to put more effort into hosting business events, to talk more to Russian business circles. In 2003, we began negotiations with different Canadian business clubs oriented towards working with Russia. Ultimately, we formed the present organization, extending its activity to Kazakhstan, and started to work with different former Soviet countries. I consider all this, possibly, to be my greatest achievement during my working life in Moscow.
— Today CERBA has over 200 members. What, given the tricky diplomatic and economic situation, is the dynamic of this membership?
— If the membership has gone down, then it’s not by much. About a dozen CERBA members have left the organization in the last 12 months. But in that time, two dozen new members have appeared. These are firms that are newcomers to the Russian market, as well as companies that have been operating here for a long time already but hadn’t joined CERBA.
— Why hadn’t they joined?
— Clearly, they felt that things were fine with them as they were. But now, in accordance with the official political line, the Canadian government and Canadian Embassy don’t have the right to promote the efforts of Canadian firms to expand their activities in Russia: only to support the existing level of business. Whereas, for us, an independent organization, this is a statutory objective.
The Canada Eurasia Russia Business Association (CERBA) was officially established in 2004 by Canadian businessmen (until 2004 it was called the Canadian Business Association in Russia).
At this moment in time it has branches and offices in Moscow, Alma-Ata (Kazakhstan) and in five Canadian cities (Toronto, Montreal, Ottawa, Calgary, and Vancouver). Apart from Russia and Kazakhstan, it develops partnership business ties with other post-Soviet countries. It unites over 200 corporations and individuals (both Canadian and Russian), representing various fields of economics and finance.
CERBA regularly arranges corporate events, informational seminars on current themes in the markets of Eurasian countries and an annual national conference. Aside from which, it provides consulting services in marketing and government policy, organizes regular trade missions, and publishes a quarterly magazine.
On the 19th of December 2004, the Russian Union of Industrialists and Entrepreneurs (RSPP) and CERBA signed a General Agreement as part of which a new joint body was created: The Russian-Canadian Business Council (RKDS).
— How many of your members are representatives of small and medium-sized businesses?
— More than half.
— From an economic standpoint, Canada is one of the world’s leading powers. However, bilateral cooperation with Russia, to put it bluntly, leaves a lot to be desired. Amongst Russia’s trading partners, Canada comes in somewhere around 42nd or 43rd place, with its share of our country’s foreign trade being no higher than 0.3%. Is the main reason for this political?
— Politics, without a doubt, is the main factor. Over the last two years: definitely. If not over the last ten years. You could put it that the position of the Canadian government hasn’t helped the expansion of bilateral economic ties, but that is not quite the case. Five years ago, Russia was included on the official list of priority markets for Canada. But … but there are other factors at play, too. Well, for one thing, Canadians as investors, and as businessmen, are exceedingly conservative. More conservative than Europeans or even Americans. When it’s a matter of taking risks, Canadians, more likely than not, will be the last ones in.
— And yet there are examples of successful cooperation between Canadian and Russian companies. In the mining sector you can name large firms like Kinross Gold, Global Cobalt, Silver Bear Resources, Barrick Gold… In other sectors too: one of the world’s biggest suppliers of automobile parts Magna International has been developing its projects in Russia, as well as the railroad engineers and civilian aircraft manufacturers Bombardier, and the acknowledged leader in aircraft engine building Pratt & Whitney…
— Yes, we were on the verge of forming several large joint enterprises. But then came 2014, and the events to do with Ukraine…
— But let’s return to the Russian-Canadian economic relationship. Big projects are linked to the grandees of Canada’s economy. But are there examples of successful joint projects in small and medium-sized businesses?
— There are. Relatively small Canadian companies are providing maintenance services on the Russian oil and gas fields, and in the mining industry. There is an IT company that has built a systems integrator for Russian companies involved in communications.
— But has Canadian business in Russia suffered a great deal as a result of the political ups and downs, the sanctions and counter-sanctions?
— You don’t have to look too far for examples … Our company Chisholm was doing great business here for twenty years. Not only was it importing food, meat, mainly, but it was exporting Russian agricultural produce to other countries. We were investing big money in Russia. But now the business is going through not the best of times …
— Are you western businessmen in Russia, having “the squeeze” put on you?
— God, no! Never! In fact, Russians behave significantly better towards foreigners than many in western countries do. Whatever the international tensions, not only have there not been any threats to life here – that’s not what I’m talking about at all – but not even displays of hostility towards foreigners. And any kind of “machinations” by the governing bodies: not in the least. I’ll go further. Many is the time I’ve been sure that when I go in person to an official establishment with a request, more often than not, it is granted. But when I’ve sent a Russian colleague, they’ve said to him: there is a procedure; you have to do this and that, write a request … In Moscow they have always made minor concessions for foreigners, and still do. Whereas, on the contrary, Russians are too strict with one another.
1. Invest in a business of yours which you know, which you are right behind, and in which you take part personally.
Simply handing over money, leaving, and waiting for it to yield a return won’t work here. Personal participation all the way down the line considerably reduces the risks.
2. Find a reliable Russian partner and establish a good personal relationship with him.
Such relationships in Russia are essential.
3. Work through and draw up all deals meticulously from the legal perspective.
Shaking hands on a contract is both necessary and important. But only after the lawyers have done their job.
4. Be steadfast and patient.
Now is not the time when you can turn up and make a million in three months. You need long-term plans and a long-term strategy.
5. Don’t be seduced by the “opportunities” offered by corruption: stay true to your principles.
It may appear that corruption will make your life easier in some ways, letting you ignore the law. But you should remember that once you go down that road, you are in a hole which you can’t dig yourself out of.
— And what, as an association, do you recommend to Canadian investors: go to Russia or wait for a while?
— No, you can still invest in Russia. You just have to use your head. And find a good, reliable partner. There are problems to do with politics, without a doubt. But they can be dealt with. Right now, products from medium-sized and small businesses are in great demand in Russia. And we say to our people: to operate successfully you have to be here, not just selling your goods from abroad. All the more so as the fall in the rouble has made it profitable. And many have already realised this: albeit on a small scale, they are starting to produce things here.
— Which particular parts of the economy, in your opinion, are worth paying attention to for small and medium-sized businesses first and foremost? What should they invest in?
— Canada has always excelled in developing natural resources: in the mining, and oil and gas businesses. So: in the sectors connected with them. Regarding small and medium-sized business, there are a whole host of companies which could become leaders here in servicing the Russian giants. If their goods and services, once again, were produced here.
— Are there already any examples of what is called production localization?
— There is an enterprise which produces wrapping tape for gas pipelines. Before, it was imported, now it’s made here. There are successful projects in services. A startup has done particularly well: an advertising agency Creative Factory, founded by Canadians in Russia. They sold this business to advertising giants Saatchi & Saatchi for a healthy profit, leaving only the director in place. And there would be more examples if the market permitted. In, let’s say, housing construction. We have long been promoting timber-frame houses, and there are successful examples of collaboration in this sphere, including the Canadian firm Hopewell and the residential estate built using Canadian technology to the north of Moscow: Novie Veshki. But you know yourself that the house-building market in Russia has caught a cold.
— But is it difficult overall for the foreigner to set up their business in Moscow?
— Technically speaking, it’s more difficult than in Canada. But if you have a good Russian partner and a good accountant who knows what to do, how to do it, where to go … Forming a legal entity can be done in a few weeks. In other words, starting your own business in Russia is simple. You just need the desire. And a market.
— Does corruption not throw obstacles in the way?
— You can work in Russia without entertaining corruption. Only on the condition that you have zero tolerance towards it. The mining company Kinross Gold, the largest Canadian investor in Russia is an excellent example of this. When it is a matter, let’s say, of extending a license, and there are the beginnings of a whiff of corruption, they go to the higher authorities. And they say: we want to extend our licence; there are official requirements, we have fulfilled all of them, but this authority claims that we haven’t. Is that what you think, too? Usually, when the issue is put in such a way to the higher authorities, everything is resolved properly.
— At the end of March in Moscow there was the 15th Annual CERBA Charity Auction with Vladislav Tretiak. What is this initiative?
— It was me who thought it up 15 years ago when I was head of the Association. I had just met Vladislav Tretiak. He is a great man. Not because he is a great goaltender in ice hockey, but because he uses his talent to improve the lives of others, especially the disadvantaged and most vulnerable in society. Talking to him is simply a pleasure. And then I had the idea for the auction: selling some hockey memorabilia signed by Tretiak ... And to donate the money raised to charity. In 2001, we raised 5,000 dollars. The next time: 12,000. Recently we have been raising 200,000 each year. By the way, we follow very closely where the money goes, and on what. Every year we make a video report on the money spent and broadcast it to the wider public.
— Do you remember the kinds of difficulties you encountered when you first came to Russia?
— It was the start of the nineties … As far as business is concerned, there were, for sure, problems to do with economic instability. And with the banking system. In 1998, after the default, the bank we had accounts with collapsed, and we lost virtually all of our money. Everyday life was a challenge. We couldn’t get baby food for my one-year-old child. These days, of course, there is nothing like that. Overall, I see progress in Moscow in many respects, massive progress even. Especially over the last five to six years. Driving around the city has got better. I won’t say that there aren’t any traffic jams. But there are considerably fewer of them since they brought those green dinosaurs into Moscow.
— Green dinosaurs?
— The tow trucks. At first, I thought it was a terrible idea. A direct crime against humanity. I always used to park on the pavement, why was it that suddenly I couldn’t? In fact, everything became much more civilized.
— Does your family live here with you?
— My wife and 17-year-old daughter are here. My son finished at an Anglo-American school in Moscow in 2010. He received an award for being the first pupil to have passed all the way through the school from the reception class to the final year: he was there for a full 14 years. He is now a student at Brock University in Canada: he is studying for a Masters in History.
— You speak really sound Russian. Is knowing the language necessary for working in Russia?
— Knowing the language of the country where you work is always useful. And in Russia it is probably more the case than anywhere else. People here appreciate a foreigner who is familiar with their culture and who is not bad at speaking their language. It makes it easier to strike up a personal relationship. And personal relationships, as I’ve noticed, are extremely important on the Russian market. In Canada it is quite possible to conduct business by email, or fax, and never meet the person you have a two-million-dollar contract with. Russians, though, when they are establishing relations with a new partner, they like to know the face.
— You have lived in Moscow for a really long time. Are you planning to keep on doing so?
— Yes. I’m used to it. Although business isn’t going so great. But before I think about leaving, I want to see what other opportunities there are. I think that there is still the potential for successful business in Russia. Which is why I’m not about to leave Moscow behind.