- MOSCOW (CP) -- Veteran Canadian expatriates in Russia have witnessed
the collapse of the Soviet Union, a hard-line coup, hyperinflation and
other turmoil, but many say the current financial and political chaos is
the first Russian crisis that truly scares them.
- "This is the worst we've seen at
least since 1993," says Bill Gilliland, president of the 80-member
Canadian Business Association in Russia, referring to the time when President
Boris Yeltsin sent troops and tanks to battle his enemies in parliament.
- "But the widespread bank failures
this time are an additional element that affects us all very adversely.
People are wondering how to carry on business or, indeed, whether to carry
on at all."
- Russia's economy has spun out of control,
triggering a breath-taking plunge in the ruble and paralysis of the financial
- Dozens of banks have closed their doors
or frozen depositors' accounts. Money transfers have become almost impossible
while Russia-based credit cards are no longer honored by most local businesses.
- The Russian government has announced
a unilateral scheme for restructuring its debts that will leave investors
with an estimated 25 to 35 cents for each dollar they lent the country.
- "I don't think anything this bad
has hit Russia since the revolution in 1917," says Doug Steele, a
47-year-old Halifax native who runs two bars and a restaurant in Moscow.
"Defaulting on the national debt, as they have done, is a huge mistake.
No one will want to come here any more."
- Steele says his business is sagging under
the double-whammy of currency devaluation and financial collapse, and he
is at a loss what to do about it.
- "When you have street-level trade,
and you see the money evaporating and the trust crumbling, that's going
to hit you pretty hard."
- Steele says he's had to stop accepting
all credit cards, even those based in foreign banks, because any funds
cleared through Russia's unravelling financial system may disappear.
- He says the emergency has forced him
to lay off almost half his staff and ask the rest to take a 30-per-cent
- "You have to wonder how you can
do business at all when it's illegal under Russian law to accept foreign
currency. The ruble is worthless and credit cards unreliable," Steele
- "But we intend to persevere."
- One concern is that if the situation
worsens, Russian politicians may be tempted to blame foreigners for their
- "We are watching very closely for
signs of anti-foreigner sentiment in Russia," says Gilliland. "It's
not evident now, but some political statements give cause for worry."
- Many Canadians say they are amazed at
how quickly the crisis has reduced the symbols of modern commerce -- such
as credit cards and 24-hour banking machines -- to meaningless junk.
- "You tend to feel secure when things
work, and it's a very weird feeling when they suddenly don't," says
Marion Gardiner, a Toronto native who has worked as marketing director
for the Canadian-owned Aerostar Hotel in Moscow for seven years.
- The Aerostar has seen a falling off in
business, but was still accepting credit cards Thursday from its trusted
- "These are not pleasant times. We
can only hope Russians come through this experience with new wisdom,"
- Toronto-based SVO Travel, which serves
the foreign business community in Moscow, says it is weathering the storm
because the majority of its customers are international corporations who
pay with lines of credit from secure offshore banks.
- "The way to survive is to avoid
as much as possible any financial transactions in Russia," says SVO's
general manager Don Storey, 60, of Peterborough, Ont.
- "The situation is very distressing.
We can weather this for two or three weeks, but what then?"