Foreigners who risk money and lives

THE CLASH at the paper mill has only confirmed that nearly a decade after the collapse of Communism, capitalist Russia remains a wild environment for foreign businessmen.

THE CLASH at the paper mill has only confirmed that nearly a decade after the collapse of Communism, capitalist Russia remains a wild environment for foreign businessmen.

For centuries, Western merchants have come to Russia, hoping to tap its enormous potential, only to go away again bewildered by a country which is neither truly European nor Asian, but a maddening law unto itself.

The British company Alcem, now risks losing its investment. But some Western businessmen have lost their lives here.

The most shocking case was probably that of the American entrepreneur Paul Tatum, who had a joint stake in the Radisson-Slavyanskaya Hotel in Moscow. He helped to turn what had been a dreary Intourist hotel into an establishment fit to receive President Bill Clinton.

Then his Russian partners tried to sideline him. He was in the process of fighting them in court. They used other methods to end the argument. In 1996, he was shot dead in an underpass. His two bodyguards both survived, leaving him alone in a pool of his blood.

Mr Tatum had come to Russia at a time when foreigners were allowed to have a partial involvement in business. Before the Bolshevik Revolution, there were many foreign companies, for example the Scottish department store Muir and Mirrielees, which was to Moscow what Selfridges is to London. But after 1917, everything was nationalised and collectivised.

As part of his perestroika reforms of the Eighties and early Nineties, Mikhail Gorbachev allowed "joint ventures", in which foreigners could have a maximum 49 per cent share. Only under President Boris Yeltsin, who took market reforms further, were foreigners able to buy the factories that had failed under Communism.

Today, there are some success stories, such as that of Inchcape which, to everyone's satisfaction, has built a profitable bottling plant for Coca-Cola in the Urals, or Procter and Gamble, which dominates the market in hygiene products. Last year's economic crisis frightened away many foreigners but business analysts say Russia remains a land of opportunity for those who are prepared to be patient.

However, many have fallen by the wayside. The British have always been cautious here, more so than the Americans or the Germans. There was a time when the Irish were active in Moscow. But many of them have gone quietly, not waiting, as Mr Tatum did, for things to turn nasty.

There was a man called Colm Fitzsimmons, who managed a corner shop called the Garden Ring Irish Supermarket. His imported groceries were outrageously expensive but he pulled in crowds of customers with his personal charm. He gave to charity and he sponsored the arts - including the first performance in Moscow of Handel's Messiah , with an expatriate choir and a Russian orchestra.

Then his Russian partners took over the store. The price of the groceries went up even further while the service became sullen and Soviet-like. The customers deserted it in droves. Eventually, it closed and now on the site somebody else is trying to make a go of a shop selling sports clothes.