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Voices of Russia: From rags to riches

Anis Mukhametshin, a jovial Tatar businessman, has used cunning, cajoling and connections to turn himself from a Soviet kitsch-music concert promoter into a billionaire businessman in Russia. By Preston Mendenhall.
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The last nine years of tumult in Russia haven’t been unkind to everybody, nor did everyone start on the same rung of the ladder. From the ashes of the Soviet Union sprouted thousands of new capitalists who made fortunes almost overnight. Many were old-time communists who used connections to adjust to the new world. But even in Soviet times, there were genuine entrepreneurs. One of them was Anis Mukhametshin, a moderately successful promoter of kitschy Soviet concerts who used cunning, cajoling and luck to transform himself into a billionaire.

Mukhametshin's rise to wealth after the fall of the Soviet Union stands in stark contrast to his life during the Communist era. He was born into poverty in Tatarstan, a Muslim republic in central Russia, at a time when access to basic goods diminished according to a city’s distance from Moscow.

On a hot summer’s day at the tender age of 13, Mukhametshin hit upon a way to make some pocket change: he made a batch of ice cream and sold it to a local store. It was the beginning of something big.

“I realized that if you make one ice cream yourself and sell it, then you have the money to make another two. You invest your profit and grow.”

Today, 32 years later, Mukhametshin presides over a string of products bearing, somewhat immodestly, his own name. There’s Anis ice-cream, of course, and then Anis aftershave, Anis-Lady perfume, Anis chocolate - and a new line of products called Black Man, which includes cigarettes and beer. The name Black Man also comes from Anis, who usually dresses completely in black - with a diamond-encrusted Rolex watch punctuating his look.

“It cost $40,000. A Belgian businessman gave it to me as a present,” Mukhametshin said.

Road to riches
Mukhametshin’s path to such phenomenal success - he said his sales will top $1 billion in 1999 - is unorthodox in Russia. Mukhametshin, unlike the oligarch-style businessmen that have pervaded Russia’s economy using their Kremlin connections to grab sweetheart deals and stash profits abroad, takes pride in his investment in Russian production.

This year alone, Anis Investment, Inc., Mukhametshin’s holding company, spent $15 million on new production lines. And like the day Mukhametshin sold his first ice cream, his company has concentrated on investing its profits at home.

Most businesses in Russia, however, do the opposite.

Since the fall of the Soviet Union a decade ago, Russian and international experts estimate that anywhere between $200 billion to $500 billion has been sucked from Russia’s vast natural resources by corrupt businesses, much of it in collusion with government officials. In the most recent example, U.S. investigators are looking into a suspected Russian money laundering ring - possibly involving government officials - that transferred more than $10 billion through the Bank of New York.

At the same time, some 50 million Russians live below the official poverty line, meaning a monthly wage of less than $37, while 10 percent of the population - the rich, in particular a half dozen “oligarchs” - control an estimated 50 percent of the country’s economy.

At the government's will
“The government works against successful businesses that aren’t politically connected,” Mukhametshin said. “It acts unilaterally against one business and then gives a break to another.”

Mukhametshin goes to great lengths to portray himself as a “by-the-bootstraps” businessman, but he also admits to having friends in high places, friends who are indispensable to doing business in Russia. Many of Russia wealthiest biznesmyeni came from the leadership structures of the Komsomol, the Communist youth league. They became the country’s first young entrepreneurs - albeit with the cards and connections stacked in their favor.

Mukhametshin wasn’t in the Komsomol, but when he moved to Moscow in 1989 to promote concerts of Soviet pop stars, one of his first ventures brought him into contact with the youth league.

“I stay in touch with them all,” said Mukhametshin, who now has Komsomol buddies running some of the country’s largest banks and oil companies. “They call me, they introduce people to me. That’s good, because I trust their judgment. And when I need something, they introduce me to someone they know. If we recommend each other, it’s a done deal. My credo is never to lose touch with people.”

Heaven in Moscow
Although his fortune pales in comparison to the wealth amassed by Russia’s Kremlin-connected business elite, Mukhametshin lives a life most Russians will never know. He bases himself at his “ranch” in southern Moscow, where he has built a dozen Swiss-style chalets from himself, his mother, sister and top directors. From an office in one of the chalets, Mukhametshin is in constant contact with his Belgian bankers and British lawyers.

Success in Russia comes with a price. Although Mukhametshin doesn’t use bodyguards (“No matter how much you pay someone, nobody here will ever take a bullet for you”), he employs a phalanx of Russian Interior Ministry police to guard his property and factories.

“People are constantly trying to disrupt our business. Where does it come from? It comes from competitors, from political structures that for some reason or another will profit from your failure.”