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Knights of the Vine RUSSIA


Beat Retirement Ė Come to Russia!
Geoffrey Cox, MBE, OBE has lived and worked in Moscow for 13 years. He has played a key role in establishing the Association of European Businesses, and also the British Business Club, and lived to tell the tale. In this interview, Geoffrey shares some of his insights and views into living and doing business in Russia.
Interview by John Harrison

What events led up to you deciding to move to Moscow?

I served 30 years in the [British] army, including time in the Parachute regiment and 21 SAS. I was awarded the MBE for my activities in East Pakistan, during the Indo-Pakistan war, and have been mentioned in the dispatches. I retired when I was in Paris, when I came to the end of my tour on the staff of the French Ecole Superieur de Guerre, the war college. I retired because I had been injured parachuting with French special forces and this curtailed opportunities for further promotion. I stayed on in France for another 10 years, I ran a little consultancy of my own with a friend, I became a professor at Institute for the Study of Political Science, where I ran special seminars on the future of military alliances. Through starting off as a technical translator, I became the editor of the English language edition of Defense and Armaments International. I was also a correspondent of the Army Quarterly & Defense Journal, which was at the time the oldest military journal in the world. I was quite happy doing all that. I had a very enjoyable lifestyle; I became the chairman of the Royal British Legion in Paris, and as a result of my activities in support of British ex-serviceman and their dependents living in France, I was appointed civilian OBE.

However In 1992, two things happened. First of all, I turned 60. Secondly, we had Perestroika, which had serious affects on the armament industry, and the decision was taken to close the magazine I edited. But I was still a professor and I still had my army pension. However, the university people said I should retire because I was 60. ďFor heavenís sakeĒ I told them, ďuniversity professors go on for everĒ. ďNot hereĒ, they said. This left me with no gainful employment, just my army pension, which would have not allowed me to support my comfortable life in Paris, but would have been enough for me to live in Dorset and do nothing. But at the age of 60 doing nothing is rather like being Socrates and drinking Hemlock. So I was looking for other opportunities, and a well connected acquaintance, a senior lawyer in Paris said: ďWhy donít you go to Moscow with my nephew?Ē I said ďWhy notĒ. So in January 1993, here we came. We set up a business, trading pistachio nuts and packaging them; it took time to set up, but we had capital to do that. But I found out that I wasnít a trader. One day I had lunch with the then consul-general at the British embassy, who told me that they were now allowed to rent flats outside the UPDK system. As it happened an old friend from Paris days was in real estate and had flats. So we did a deal and leased the embassy 5 flats, which they still consider as being among the best they have.

Subsequently, I was invited to work part-time for a real estate company, which soon became affiliated with Weatherall International. For a couple of years I acted as tenant rep; I found the clients, then I went to the big agencies and found the space; but there came a moment when Weatherall was taken over by another company, to become the biggest real estate agency in Europe. I realized that we were very small in Moscow and that their primary interests would be elsewhere. Therefore, I took the opportunity to create a new company, by joining with a Russian friend with whom I had done business, and so we created Astera, in 2001.

What were your main interests during those years, apart from real estate?

I have always collected paintings, I am fond of that. In 1995 I was sent by the British embassy to the French embassy for a meeting along with another Brit. This turned out to be the beginning of the European Business Club. I became the first British board member of the European Business Club. As it so happened, from then on, the British contingent has always been the largest in the EBC, which has now been renamed, unfortunately in my opinion, the Association of European Businesses, the AEB.

Another interesting that thing happened a little later, also connected with the British embassy, was when Simon Smith, the then economic, technology and commercial councilor, did away with the regular drinks events in the embassy for the business community. I was adamantly against it, and argued with him without success. So then, with Robert Norton, Mark Javis and Don Scott, we started having our own drinksí events in different locations. It has proved to be an excellent networking opportunity that has developed the way it has now into the BBC [British Business Club]. I was also a founding member of a group in the Russian Cultural Fund, trying to bring new life to Russian ballet. Russian ballet has remained very classical and apart from dance in the rest of the world. I have always had an interest in the theatre; I had hopes of being an actor myself, I won a scholarship to the RADA [Royal Academy of Dramatic Art], but joining the army coming up and going to the Royal Military Academy Sandhurst to become a professional soldier changed all that.

Alas, I will never speak Russian, but I do go to the opera... I do go to concerts not to the ballet so much now because Iíve seen them all! Iím not exactly mad on modern dance I have to tell you!, but one of my daughters was a ballet dancer, so this is all close to me.

You have seen the AEB grow right from the beginning, how did your role change over the years?

I am jokingly referred to as being one of the Ďfounding fathers!í, and was a member of the board, which was then made up of 15 members, each representing a country, and we elected a chairman. Later, when the EU enlarged, it was not practical to get 25 board members to meet, so we changed the organization, alas along with the name, and created an executive board and a council of national representatives, and it is the latter which has a supervisory role that I have chaired for the last two years. But Astera has been growing all this time, with offices in Saint Petersburg and Kiev, as well as its presence in Moscow, and you just canít do everything. This year, my 11th in the AEB, Iíve announced that Iím going to stand down from having an official role, and Iím glad to say that we now have two important and prestigious Brits who have been elected to the executive board. I look forward to the AEB become more and more influential. The organization is treated with respect in Brussels, and by the Russian authorities. You have to remember that everything is achieved by hard work and entirely on subscriptions, there is no money from any state. There were some difficult moments, like when the EU wanted to impose sanctions because of Russiaís human rights record. We wrote to Brussels and said that we did not think that trade sanctions are a good idea. I was attacked severely for not supporting the Brussels line at the EU Economic Councilorís monthly meeting. But we were right. Trade understands international relations much better than politics. Politicians make very poor businessmen. Now as I step down, officially at least, from the AEB, I am happy to say that Astera is making real headway. That is where I shall be devoting my time in future, as an ONCOR Partner we are now part of the 5th largest real estate agency in the world.

Why did you choose to get involved in real estate?

I had come to Russia because I didnít want to retire. When we created Astera, I remember the Moscow Times did an article about me entitled ĎItís never too late to start in real estateí. I started in real estate because it was there. Why do you climb Mount Everest? Because it is there. Real estate was new; the market didnít exist before 1990; the concept of private property was an anathema to the whole system; it was new and challenging. Also I have to say, that then at least, it was not rocket science. The most important part of real estate is trust, faith and honesty. If you try to take advantage of people in real estate, then you have a limited life-span. It may be as long as 10 years that people can get away with things. But if you are going to build a lasting business then you canít afford to upset people.

And real estate is interesting, because if you cannot understand what your clients are doing, then how can you serve them? My expertise in the early days was client representation, and of course I had to find out exactly what the client was looking for in terms of space, what he wanted to pay, and so on, and then try and find a match. This is completely different psychology from the landlordís rep who really only wants to get the guy in. Thatís why you should never let landlordsí representatives push you into signing a contract; you should get advisors of your own involved. But so many companies and individuals donít do that in real estate because they think theyíre saving money. Companies spend millions, if not billions on property, but they leave it to the head of logistics or whoever. Seldom do you find an expert on the board of companies, and thatís because the way up for real estate professionals, particularly in Britain, is through being a chartered surveyor, not much appreciated outside the industry. The corporate world needs to recognize this and make sure that it is better advised.

On my various speaking trips, there is one point which I now frequently make. That is, international investors, particularly European investors, should be concentrating on Russia. By investing in Russia, they are strengthening an important partner, one with natural resources. Whereas people who put their money in China, are building an enormous competitor who will eat us all alive in the end. Rules in China such as that which stipulates that the Chinese have to own 51%, are rules that donít apply here. Russia needs much, much, better public relations. Most of us who live here I know are doing our best in this respect.

How, in your opinion, has the attitude of western business people here changed over the years?

I have been an expatriate all my life, when I was a soldier I lived abroad all the time, and there is one thing that is for sure: that people who live in any foreign country think that they are above the law. Unless you are living in a country with a family, then perhaps it is different. I remember the American ambassador saying in the early 90ís: ďI see no businessmen here, I see only carpet baggersĒ. Well, thatís unfair to everybody that was here, but itís certainly true that there were a lot of mistakes made. There was the Harvard scam and so on. But again, you have to remember that when I came here, I was very excited on the plane coming over here because after all, I was flying into the land of the enemy. All my life I had been preparing for the Russians to invade us. I was amazed to find that not only did they not intend to invade, but that they wouldnít have been able to. And they thought that we wanted to invade them. How wrong could they be?

So there was a total misunderstanding, which I think was managed by the two sides in an Orwellian way. However, everything appears to be changing for the better. I have great faith in the long term future of Russia.

Do you ever see yourself going back to England?

I think that if I had gone back to England when I was 60, I would have, like all old soldiers, faded away. I take pride in the fact that I will be 74 this year, and that every day adrenalin runs through my veins, because of my job, interests and friends here in Russia. Moscow is the most exciting city in the world. So the answer is yes, but Iím not sure when, but not while the adrenalin keeps pumping.

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