Ivan Savvidi about prospects for cooperation between Russia and Greece
Forthcoming visit of Greek Prime Minister Alexis Tsipras in Moscow is considered as a step to rapprochement of Russia and Greece. According to Ivan Savvidi the well-known businessman, Member of the Presidential Council of International Relations, President of the National Cultural Autonomy of Greeks in Russia, Chairman of the Board of Directors of the «Agrocom Group» Holding Company, such an event may be an initial stage for expansion of cooperation between Russia and Greece. In his interview for «Kommersant» newspaper Ivan Savvidi told about importance of public diplomacy for external politics of Russia, why import embargo for agricultural products of some countries should be repealed, and about the effect of sanctions on Russia’s economics.
«Greeks need Vladimir Putin even more than Russians»
-You have been working at issues of Russian-Greek relations for many years. What do you think about the necessity of meeting between Greek Prime Minister Alexis Tsipras and Russian President Vladimir Putin?
-I said it time and again that Russia can’t live without Greece as well as Greece can’t live without Russia. It is for historical reasons: there are too many cultural and spiritual traditions and customs so they can’t exist separately. There were periods when leaders of our countries met few times a year discussing wide range of questions, and I think that it is meets the strategic interests of Russia and Greece.
Unfortunately since Greece joined the European Union relations between Athens and Moscow were getting colder: Brussels simple couldn’t allow rapprochement of one of its members with Russia. But I have to mention that Russia also left off considering Greece as an attractive partner, focused on solving other problems.
In fact, even then most of Greeks were oriented to collaboration with Russia. Any Greek politician who stood in elections, even despite his pro-Western line, had to meet Russian patriarch and representatives of political and social quarters in the frameworks of his campaign; otherwise he would lose the support of his voters. Once when I was walking down the street in Greece, one man came up to me and told «Are You Ivan Savvidi? Please, tell Vladimir Putin that Greeks need him even more than Russians. »
Now when Greece has changed its political course, our countries have a new chance for rapprochement. Representatives of the Greek establishment have already announced their will to reconstruct ties with Russia. I shall be honest with you, I’m really glad because it is a result of many efforts, and mine in particular. Of course, the result of this meeting is unpredictable but the fact of this meeting itself is a big step forward after several years of cool relations between our countries.
-What questions, from your point of view, concerning cooperation between our countries have to be discussed on the presidential level?
-Range of such questions may be wide. Touristic sphere and energy supplies- these are the most obvious questions. Taking into account the aggravation of military sentiments in the world and Europe, questions of military technical cooperation should be mentioned. I would like to emphasize that Greeks are ready for deep integration process.
-To what extent did Russia’s sanctions concerning import of agricultural products complicate relations between Russia and Greece?
- Import embargo for agricultural products was coercive measure for Russia. But if our country approached this question in other way, we would have more evident effect. As we know even if a big stone have some cracks it will be eventually destructed by natural elements. So it would be better for us to leave small cracks in the structure of European Union, and don’t impose embargo on countries which are interested in cooperation- for example Hungary, Serbia, Greece etc.
Today countries which would like to weaken Russia and those which favour our country are in disadvantage. Moreover there is no economic sense in these sanctions: Greece and Russian foreign trade in agricultural products makes 400-500 million EUROS, taking into account that external debt of Greece exceeds 320 billion EUROS. That is why our embargo for Greece is just a drop in the ocean. We have to understand that Greek agricultural products anyway is offered for sale in our country- in countries which are not the sanction list, Turkey for example, labels with name of producer are changed. Embargo is a problem of a single farmer. And this is very important political question. It is hard for Greeks to realize that Russia imposed some restrictions on their country. That is why we prepared a letter to Vladimir Putin with the request for cancellation of sanctions for Greece. I hope that this question will be discussed in the course of meeting with Alexis Tsipras.
I would add for myself that if the results of this meeting be positive, Russia should extensively use principles of «public democracy» in its external politics. Russia and Greece are open to dialogue due to some merits of businessmen who facilitate this process. «Public democracy» is underestimated now. For example, when the Slavic languages department of Kapodistria Athena State University was under the threat of liquidation, I entered into commitment to finance it. It was my initiative and I am proud to support learning of Russian language among Greek young people. But I would like to do it in the frameworks of governmental policy. That is why I would like people to involve into the process of rapprochement of Russia with countries of its geographic-political interest.
«Nowadays business needs investment loans with the rate 3-5%»
-You are the head of one of the largest holding companies in Russia. What do you think about the influence of tense relations between Russia and western countries on business?
-The situation is quite complicated. We resumed company’s results for 2014. And despite the growth of the total gross sales by 24% to the level 65, 7 billion RUBLES, I am not satisfied with the results. I clearly understand that apart from sanctions and speculative fluctuations of the exchange rates our results would be higher.
For example exchange rates are quite significant for the tobacco industry. We have to import all materials to produce our tobacco products. And when exchange rate of the dollar growths twofold in a short time, it is childish to say that nothing special has happened.
The situation for meat processing is harder. This branch of industry is quite fragile itself, because enterprises have to work with big volume, but small profitability. Today there is a wide range of negative forces which affect this branch. For example, growth of exchange rates, because there is not enough materials produced in Russia. You can add to this growth of expenses of Russian meat producers, resulting in growth of prices. Comparing to 2013 prices for poultry have grown by 40% and by 70% meat prices. At the same time crisis hit consumers. More and more people have to reduce their expenses for nutrition, and traditionally they exclude meat ready-to-cook products and sausage. Although I try to be optimistic, it seems to me that the situation in the sphere of meat processing will take step for the worse.
-What governmental measures could support business in this hard situation?
-Speaking about meat processing, the most important step here is to cancel import embargo for meat and extension of the direct quotas for meat processors. Russia is the only country where “rent of quota” exists. This scheme helps to enrich intermediaries, while producers are burdened with coast loading.
Speaking about the situation in general, I think it is necessary to support the real economy. Because work places, taxes and a wide range of social questions depend on it. But current actions of the Central Bank don’t facilitate solution of this problem. We again try to save bank system compromising the real economy. What kind of business can handle a loan exposure of 18-20%? Even previous rate was a real burden for some branches of industry.
I am sure that today Russian producers need investment loans with the rate 3-5%. Their usage should be under a strict control. We have an example of the European countries where rates of investment loans don’t exceed 0, 5-1%. In Switzerland for example you can even get some money when you open an enterprise, create new workplaces. These countries have already gone through several economic crises so such practice is quite reasonable. Three years ago we took out an investment loan and some time ago we received a notification about growth of our rate.
-Are you going to realign the strategy of development of your enterprises because of the volatile economic environment?
-We are looking for opportunities to provide soundness of our development. One of them is trade reorientation from the internal market to external. So we charge our tobacco business-complex with a task to sell third of our volume for export. Recently we met our colleagues from Iraq, and also we are in the stage of negotiations with Iran, Syria, UAE, planning to develop actively in countries of Africa.
Good progress on the export market has the manufacturer of casing «Atlantis-Pak». Last year export sales grew by 19% and made 2, 4 billion rubles. Economic crisis has affected this enterprise too, but «Atlantis-Pak» operates in 70 countries, so we have currency earnings, and the situation is not bad. We are going to expand export markets. Our best-selling products- casings «iPeel» and «iCel» which possess unique characteristics- we created with the purpose to occupy leading position on the world market. If no complications set in relations with the western countries, we would complete this mission.
I know that such a strategy contradicts current policy of our government, which encourages us to open new enterprises to operate on the inner market. But we have to survive in these complicated conditions, support enterprises that are aimed at the inner market. That is why we have to pay special attention to development of foreign production sites.
-Weakening of the national currency makes other companies to make decisions about reorientation to the western markets. What advantages or disadvantages for the regional economics can cause such an approach?
-I cannot see any disadvantages. Russia has made great integrative thrust into the world’s economy, and it was a great progress for our country. We cannot even cast a thought about some kind of isolation. Without exchange of experience and technologies we cannot achieve a competitive economy and double country’s GDP.
-What else can Russian companies do to raise their competiveness besides reorientation to the external market?
-One of the most important resources can be reduction of costs within our enterprises. We announced this year to be that of struggle with inner costs, unification of all procedures, re-examine of the inner logistic processes. We even cooperate with some consulting companies which can help us to do it. It means that production itself can be a significant resource for improving our results and raise the competitiveness of our enterprises.
One more significant resource for our holding company is the reduction of unwanted costs for presence in retailer chains. It is high time to bring back tobacco products in a small-scale retailing. Thus we can get more than 300 thousands work places and diminish unwanted costs outside the production.
-How do you estimate the perspectives of the Crimean business line?
-I think that accession of Crimea to Russia was the happiest event for Greeks living there. Speaking about history I should mention that first Greeks appeared on the peninsula long before the Scythians, and today there is a big Greek Diaspora there. And of course we can’t ignore two new federal districts as part of our country. These days we develop our retail chain «Assorty» in Crimea.
But I cannot say that we work there just for profits. I regret to say that Ukrainian government hadn’t been doing anything to preserve cultural heritage of the Greek nation. That is why we plan to launch wide range of charitable programs aimed at reconstruction of Orthodox Churches.
-According to official documents annual volume of tax payments of the «Agrocom Group» Holding Company makes more than 350 million RUBLES. Do you think proper to maintain the same volume of financing despite the economic crisis?
-I strongly believe that significance of social responsiveness of business has to rise during the crisis. The most important part of any enterprise-its people, because it is their will, energy, emotions can affect the work of the whole system. People should understand that the owner doesn’t waste money but redistributes it to make profit for people, region and country.
That is why I take into account not only business interests but social effects too. For example, nowadays I’m quite disappointed with situation in Rostov Airport. It was announced that there would be a residential complex which means that Rostov Civil Aviation Factory №412 will be closed as far it is unable to operate without landing strip. From the business point of view it is not a tragedy, because it is not so important for the group of companies. At the same time I really do care about 850 people working there. I think that our government has to solve this problem and think about these people too. I think that it is possible to replace the factory, taking into account the fact that it is a unique enterprise. And if it is closed, government will have to channel all orders to Belorussia.
«Agrocom Group» is going to continue our social programs. We will finance our handball club, reconstruct churches. Of course we cannot ignore the inflation processes decreasing wealth status of our citizens. That is why we carried out an indexation of wages within the group of companies.