Chris Barter was at Goldman Sachs for 20 years, and for the last five years he was in charge of the company's Moscow Office, overseeing GS investment in the country.
Earlier this year Barter decided to leave the firm, instead deciding to stay in Moscow and start his own fund, DMC Partners, that would act as a global fund for developing markets.
Barter was in New York this week so we asked him exactly why people seem so less enthusiastic about Russia than the other BRICs.
"I've thought about it a lot over the years," he said. "I think the vestiges of the Cold War is a big part of it. I think UK in particular, even more so than the US, is very caught up in viewing Russia through the lens of the Cold War [...] I'd say relations between Russia and the UK are probably the poorest amongst all the Western countries."
The problems that Western investors fear are simply out-of-date, Barter argues. "It feel like, both for the US and the UK, the perception of Russia is at least 10 years behind in time. So when people ask me: “What is it like to live and do business in Moscow? How much security do you have? Is there a big mafia problem? How do you avoid organized crime?”"
"These were very relevant questions and observations nearly 10 years ago, in the early 90s, until ‘98. It’s completely irrelevant now," Barter says "I’m not saying there’s no organized crime in Russia, of course there is, [but] I never come across it, I don’t have any bodyguards, I’ve never had a security issue in Moscow in the entire time I’ve been there. It’s just like any developing country that’s growing."
What's more, a negative contrast with investment in China is simply untrue.
"The second reason why is that there’s been this love affair that the West has had with China that’s grown steadily over the last decade," Barter says. "And so I think it’s probably fair to say that whilst people are excessively negative on Russia and the reality is much better than what the perceptions would lead you to believe, I’d say the opposite is true for China, where it’s actually the positive perceptions that are not really reality, and it’s much harder to do business in China than what people perceive, and its a much tougher place to operate in than people imagine."
In China, Barter says, he was made to feel like a "visitor", while in Russia they were made to feel a "permanent member of the financial community." Barter says that he had numerous examples of "financial contracts and derivatives and different types of liabilities with state-owned entities that just weren’t honored, and the government entities simply walked away". The same wasn't true of Russia.
Recent scandals have only made obvious what Barter experienced in Moscow and Beijing.
"Look what’s going on in China right now. The Bo Xilai situation is evidence for the fact that there is enormous corruption in the Chinese system. It’s very difficult to say if it’s more or less corruption than Russia, it depends on how you measure it, but they have a lot of work to do in China. It’s not obvious that these perceptions are really based on any kind of reality."
More From Business Insider
