19/10/2008 Moscow

Today I had one of those Kafka-esque comic experiences that really bring home what it means to deal with Russian officialdom. Having paid the entrance fee into the Pushkin Fine Art Museum (which is by the way absolutely wonderful – best experience in Moscow yet) I was asked to leave my bag in the cloakroom. Fair enough of course – but when I went to the cloakroom the official in charge insisted it was full. I could neither go into the museum nor back out (without losing the entrance fee)! I tried to suggest to the official in charge of bags that he could put my bag on the top of the rack and write a note of where it was as a 'check' for me - a common sense idea that was unfortunately far beyond my knowledge of Russian and his willingness to bend the rules. It is quite probable, of course, that as so often in such situations in Russia the solution lay in my wallet – but how do you know? and how do you know how much? Fortunately somebody came in to retrieve their bag at the vital moment – I put mine in the free space and the newcomer gave his bag-check directly to me.

The view from the conference centre acoss Lake Seligar towards the monastery at Ostashkov

I'm just back in Moscow after nearly a week out in Ostashkov, between Moscow and St.Petersburg, where I've been leading a training conference for 30 or so people mainly from NGOs interested in social enterprise. A number of the Oxfam Russia staff were there and this gave me a chance to explore further the whole context – political, economic, social and cultural – for social enterprise development in Russia. I was in particular able to talk this time with Sergey Zhidkikh, the Russian (but fluent English-speaking) Programme Manager and Nicholas Colloff, the English-of-Russian-origin (but certainly not fluent Russian-speaking) Country Manager. It was a humbling experience, partly because these two men are exemplary in their knowledge, skills and humanity, and partly because the barriers to social enterprise development are so big.

Perhaps the biggest cultural difference is that - as Sergey put it - “in Russia power is personal”. What is and is not possible – let alone optimal – in terms of social enterprise or almost any other kind of development cannot really be taught – it has to be negotiated with local officials etc. There is enormous complexity in the legal/financial environment – and many uncertainties and undecidables in areas such as tax liability and contracting – and of course this complexity and uncertainty is just how the petty-powerful like it. Since what would in our society be the bastions of transparency and accountability – the free media and independent courts – are in Russia also subject to this personal power ethos, there is little choice at the moment other than to go along with it.

Added to this problem of course is the simple lack of economic activity (outside of big cities - which are booming). Any social enterprise idea that involves tapping into local disbursable incomes will struggle in rural or small-town Russia, where poverty is pervasive and where of course Oxfam is working. Most of the ideas I want to work on next year in fact depend on a 'fair trade' business model (products made in disadvantaged local communities sold at a premium into sympathetic markets hundreds of miles away).

On the positive side, however, there are many social forces that favour social enterprise in Russia -

• the natural sympathy many people feel (arising perhaps directly out of their recent bitter experience of transition from soviet to cowboy economy) with the idea of doing business in a way that includes and cares for disadvantaged people, and respects other social and cultural values
• the ability of social enterprise to address precisely many of the social and economic problems faced by disadvantaged communities in Russia - and at the same time build the capacity and independence of civil society in a way that grant or government funding cannot
• specific commercial opportunities for social enterprise arising out of the way the Russian economy is developing, for example in market niches outside big cities which are not attractive to big business nor possible for local individual entrepreneurs (the 'fair trade' business model is an example of this but there are others around specific services).

Russian social enterprise pioneers - some of the Ostashkov Conference participants