Prague, May 2004
Dear Friends and Family:
Am staying in a hotel with tourists, lovers in their 60s and families with pre-teenage children in tow. Our group had trouble finding a business hotel with three available rooms for this last week in May, the only time when all three of us could come to Prague. Tonight, though, I am suffering from the flu and I begged off our formal dinner. I spent a few hours on email, took a warm bath and now am enjoying lobster bisque in the hotel’s bar with a glass of Czech cabernet sauvignon.
I am very happy in this bar. The walls are covered with black and white photographs of Prague in the 1930s and one can imagine the beauty and elegance of Prague in the pre-war years. The photographer seems to have preferred a particular street corner where pedestrians were more concerned with avoiding the deep puddles of water than in avoiding the lens of the camera.
It’s hard not to fall in love with Prague. It’s an old city, preserved by accidents of history where the old streets are still very narrow and maddeningly complicated. They were streets created by people who walked on rural paths until one day houses started to be built, and then rebuilt and then rebuilt.
However the legacy of the Soviet period is still evident in Prague. Many of the cities of central Europe benefited from being under Soviet influence. Some new buildings were built over the years but the old sections of the cities were protected from modern development. However the Soviet mentality was not always such a blessing.
Earlier this week when my room still had not been made up at 5pm, I called the hotel’s front desk. “I think that the maid has forgotten me,” I joked. “Didn’t you put up a paper?” the receptionist asked, initially suggesting that it was my fault that the room hadn’t been cleaned. Her remark was a hint of the former Soviet approach to customer service: the client is always at fault. It’s hard to believe such traces continue, even as the former Soviet hotels increased their prices from$1.25 a night (for bare-bones rooms in 1990) to $125 a night for the same rooms in the same hotels a year later to now $300 a night for very new hotels with very nice rooms. “Your room will be made up immediately,” the receptionist then responded, catching herself and following the contemporary mantra that the customer is always right.
However some of Prague's residents would prefer still more modernization. Last week-end after several desultory efforts, the hotel's front desk found a tennis coach with whom I could hit balls. Tomas is a bored (and single) civil engineer, who told me that he would rather spend his life teaching tennis than working as an engineer. He described Prague as a museum--an old town with no economic life. “Nothing is working in the Czech Republic,” he complained when I remarked that the temperatures at the end of May were still just above freezing. “Nothing is working here. Why should the weather be any better?”
At 40, Tomas is just a little too old to have benefited by the accession of the Czech Republic to the European Union this Spring. The economic reforms to permit accession to Europe brought Czech-land(as we used to call the Czech Republic) into conformity with all the rules and regulations of western Europe—but they haven't yet created a business environment with good jobs for this smart, single, energetic, and handsome 40-year-old from Prague who is still looking for love (and a good job) in all the wrong places.
Sue
Thursday, May 27, 2004
Saturday, May 22, 2004
The Hazards of Being a Woman in Moldova
From May 2004
Dear Friends and Family:
As I lie on my bed in the luxurious Renaissance Hotel in Prague, my memories of Chisinau are beginning to fade. Before losing them entirely, let me write to you about my travels.
In many ways, Moldova is a forgotten country. It lies on an inland strip between Romanian and Ukraine—abandoned by Romania but considered an agricultural backwater by Ukraine and the Russian orbit. Two million people, of which more than half live in abject poverty, constitute this quiet nation.
It feels as if Chisinau is in a time-warp, stuck in a time (as Russia was in 1995-96) when legitimate businesses and criminal syndicates were largely interchangeable. As one prominent expert explained last week, money-laundering is generally thought of criminal proceeds being invested in legitimate businesses. In Moldova, those who make money legitimately invest it in the underground economy—to take cash out of the country or just avoid burdensome taxation, which in some cases can exceed 150 percent of a company’s annual profit. But today’s Moldova, it’s impossible to separate the legitimate from the illegitimate.
I find highly work in corrupt countries to be exhausting for two reasons: (1) it’s difficult to obtain reliable information from official sources and (2) living conditions even in the best of local hotels are uncomfortable.
Regarding the quality of information, refusing to talk about the serious problems of the country seems to be a form of patriotism in Moldova. As an outsider, one needs to find out a certain base amount of information in order to show that one understands what’s going on. Only at that point can one be considered as an insider, worthy of hearing the true story. But that first piece of insight can be difficult to obtain—and it is only then that one can start working in earnest.
Nine banks have collapsed in Moldova, of which at least two have involved criminal charges of theft and fraud. Yet there are no stories in the international press. My interpreter was the only one who put the pieces together for me—and this only after two weeks of working together day after day.
Over coffee one morning, I asked her what her father’s profession had been. She confessed that she is the daughter of a famous Moldovan dissident, who went to jail and suffered physical abuses for his political views. Anna finally told me that her father had been good friends with Alan Ginsberg and other famous intellectuals of that period. But she also told me how upset her mother had become, having to raise her children without an accessible husband. He was in his element in jail, surrounded by other intellectuals who debated the important issues in the evenings. By contrast, her mother was shunned by their former friends, who would cross the street to avoid saying hello. Even with such a history, it took Anna days and days to tell me the true story of fraudulent activities in the banks.
In my analysis, I found that one-third of the Moldovan banking sector is controlled by business groups, mainly in off-shore zones for which virtually no information is publicly available. The controlled shareholder of at least one major bank has been subject to FBI investigations and, according to the press, is thought to have ties with Russian criminal groups. He was the same person who had owned, or perhaps continued to own, my hotel.
I definitely did not like my hotel. I arrived on a Wednesday almost three weeks ago and was upset to find that my room was almost directly above the kitchen and the bathroom had a small shower but no bathtub. I wandered around the hotel looking to see if there were any rooms that might be more pleasant for my stay. I started on the top floor but was uncomfortable having the maids watch my activities very carefully. (It turned out that the top floor was where the hotel’s owners conducted their business, or at least part of it.) I finally changed my room to get away from the hotel’s kitchen but couldn’t get a bathtub. And then I found that I wouldn’t have wanted to take a bath anyway. The water was both very hard and very brown and after two days had started to turn my chemically-treated hair into a shade of orange. By the end of the second week, the water situation got still worse: for hours we had no water at all. By then, I had stocked up on mineral water and was boiling mineral water for tea and using crystal water from the Carpathian mountains of Ukraine to wash my hair.
Working out at the hotel turned out to be difficult as well. The hotel’s publicity has beautiful photos of its facilities, complete with on-site trainer. This was a lie. The gym certainly had no trainer, just an elderly lady of the type that would used to survey each floor in a Soviet hotel. The gym’s machines, reputed to be of the highest quality, looked like the low-budget machines one might buy on the Home Shopping Channel. Walking on the treadmill caused it to sway from one side to another.
But then, the gym was not really intended for use by hotel guests. The second day after I arrived, I asked the front desk for directions to the gym. “It is occupated,” said the snippy woman behind the desk. It tuned out the gym had not only some workout equipment but also two easy-chairs (for the bodyguards) and a full formal dining-room (for the hosts and guests). The gym was used for private parties by those who insist on entertaining in a window-less dining-room located between the weight-machines and the swimming pool and sauna. In the Soviet era, the gyms were a center where criminal groups congregated—and according to the press, plan their activities. However in 2004, it’s hard to believe that a fitness center could be anything more than a place to work out.
Just as the hotel lied in their advertising, so the Government was less than accurate about its statistics. The official numbers are that the stock market capitalization is 18 percent of the Gross Domestic Product (GDP) but the stock exchange could not substantiate the number, which is more likely to be less than one percent of GDP—negligible was my description in my reports. Such deception makes me angry and forces me to check and recheck every piece of information that we receive.
To make life still worse, the two Sunday mornings that I was in Chisinau were full of very noisy celebrations. The first Sunday was Victory Day when the Soviets defeated the Nazis in 1945. Rockets were blasting before 8 am that morning. I wasn’t certain about the second Sunday, but by 9:00 am the park across from the hotel was full of marching bands with loud drums that made it difficult even to hear the T.V.
Observing daily life in Moldova also made me angry. In the evenings, as I waited for my dinner to be delivered, I watched night after night as the thugs and the prostitutes conducted their business in the hotel and the restaurants nearby. Moldova is the primary exporter of prostitutes into Russia and the activity is so pervasive that some seems seem as young as 15 or just 14. Prostitution is one of the primary sources of income for the local crime groups. The international press indicates that in Moldova, the market price to buy a woman (as a slave) is just $49. Nowhere else in eastern Europe is the value of a woman set so low.
My evening analyses gave me a chance to refine my analysis of how to identify a prostitute. If she is wearing a shirt, then the skirt’s side-slit (or even the entire skirt) must come to the panty-line. Jeans not only should be skin-tight, they should separate the two checks of the butt. Three-inch skinny heels are also a minimum requirement but behavior is probably the best indicator. Prostitutes in this part of the world seem to come in pairs. In bars, they sit at tables across from each other with a single drink or coffee in front of them for hours on end. But they don’t generally talk. They just sit at their table, watching their cell phones. Moldova has so many prostitutes that it’s possible to separate the amateurs from the pros. The amateurs talk among themselves and may be in groups of three or four. The amateurs will also reject an approaching male if he tries to touch one of them too early in the process. It is rumored that the current fiancée of one of America’s tycoons comes from Moldova—a beauty-queen by all accounts—but I wonder how one can come from such an environment and not be desperate for wealth.
I think that for women in poor countries, beauty is needed for economic survival and good looks are a commodity in which women invest money and time. Such emphasis on beauty turns out to be helpful for me. Days of internal anger and insufficient show their effects on my nearly 52-year-old face. As is my custom, I selected the woman at the front desk with the best skin and asked for her recommendation of a facialist. The best facialist in all Moldova was working in the hotel, I was informed.
When I arrived to visit the facialist (also called Anna), I told her that I was from Washington. She mentioned that one of her former students was in Washington and that I should visit her former student, Svetlana. After a few minutes, while Anna was doing the massage, I asked her for Anna’s last name. I couldn’t believe that Anna was referring to my facialist for the last ten years. Anna told me that she was Russian, from Moscow, and had never mentioned Moldova or other Soviet republics in all the years that we had discussed the former Soviet Union. At some point in her life, Svetlana was in Chisinau and had learned her trade from Anna, this 62-year-old lady working in a windowless basement in a hotel thought to be owned by mafia. Anna was very good. She told me her hand-made creams had won international awards and they proved to be better than the creams that I buy for $80 a bottle.
In Chisinau, I also found also the best tennis coach I have had in over five years. Viktor spoke only Russian, of which I know only a few words, but his hours of hitting with me gave new intensity to my tennis strokes. For $10 an hour, Viktor ran all over the court to give me perfect shots from which I could practice different strokes and strategies.
I don’t know if I will go back to Moldova again. I worked out some suggestions to deal with the worst of the corporate governance abuses—such as require that joint stock companies obtain an annual independent fraud and make the board of directors legally responsible if they fail to prevent fraud—but such innocuous recommendations threaten some powerful business interests that have the parliament well under their control.
Just in case, I visited all the other hotels in Chisinau to see if I could find one that was better managed than my hotel and I gave Anna and Anna and Viktor a big hug to say that I hoped I would return. If my ideas are accepted, they could make a difference in moving towards legitimate businesses. But that is a big “if”.
Sue
Dear Friends and Family:
As I lie on my bed in the luxurious Renaissance Hotel in Prague, my memories of Chisinau are beginning to fade. Before losing them entirely, let me write to you about my travels.
In many ways, Moldova is a forgotten country. It lies on an inland strip between Romanian and Ukraine—abandoned by Romania but considered an agricultural backwater by Ukraine and the Russian orbit. Two million people, of which more than half live in abject poverty, constitute this quiet nation.
It feels as if Chisinau is in a time-warp, stuck in a time (as Russia was in 1995-96) when legitimate businesses and criminal syndicates were largely interchangeable. As one prominent expert explained last week, money-laundering is generally thought of criminal proceeds being invested in legitimate businesses. In Moldova, those who make money legitimately invest it in the underground economy—to take cash out of the country or just avoid burdensome taxation, which in some cases can exceed 150 percent of a company’s annual profit. But today’s Moldova, it’s impossible to separate the legitimate from the illegitimate.
I find highly work in corrupt countries to be exhausting for two reasons: (1) it’s difficult to obtain reliable information from official sources and (2) living conditions even in the best of local hotels are uncomfortable.
Regarding the quality of information, refusing to talk about the serious problems of the country seems to be a form of patriotism in Moldova. As an outsider, one needs to find out a certain base amount of information in order to show that one understands what’s going on. Only at that point can one be considered as an insider, worthy of hearing the true story. But that first piece of insight can be difficult to obtain—and it is only then that one can start working in earnest.
Nine banks have collapsed in Moldova, of which at least two have involved criminal charges of theft and fraud. Yet there are no stories in the international press. My interpreter was the only one who put the pieces together for me—and this only after two weeks of working together day after day.
Over coffee one morning, I asked her what her father’s profession had been. She confessed that she is the daughter of a famous Moldovan dissident, who went to jail and suffered physical abuses for his political views. Anna finally told me that her father had been good friends with Alan Ginsberg and other famous intellectuals of that period. But she also told me how upset her mother had become, having to raise her children without an accessible husband. He was in his element in jail, surrounded by other intellectuals who debated the important issues in the evenings. By contrast, her mother was shunned by their former friends, who would cross the street to avoid saying hello. Even with such a history, it took Anna days and days to tell me the true story of fraudulent activities in the banks.
In my analysis, I found that one-third of the Moldovan banking sector is controlled by business groups, mainly in off-shore zones for which virtually no information is publicly available. The controlled shareholder of at least one major bank has been subject to FBI investigations and, according to the press, is thought to have ties with Russian criminal groups. He was the same person who had owned, or perhaps continued to own, my hotel.
I definitely did not like my hotel. I arrived on a Wednesday almost three weeks ago and was upset to find that my room was almost directly above the kitchen and the bathroom had a small shower but no bathtub. I wandered around the hotel looking to see if there were any rooms that might be more pleasant for my stay. I started on the top floor but was uncomfortable having the maids watch my activities very carefully. (It turned out that the top floor was where the hotel’s owners conducted their business, or at least part of it.) I finally changed my room to get away from the hotel’s kitchen but couldn’t get a bathtub. And then I found that I wouldn’t have wanted to take a bath anyway. The water was both very hard and very brown and after two days had started to turn my chemically-treated hair into a shade of orange. By the end of the second week, the water situation got still worse: for hours we had no water at all. By then, I had stocked up on mineral water and was boiling mineral water for tea and using crystal water from the Carpathian mountains of Ukraine to wash my hair.
Working out at the hotel turned out to be difficult as well. The hotel’s publicity has beautiful photos of its facilities, complete with on-site trainer. This was a lie. The gym certainly had no trainer, just an elderly lady of the type that would used to survey each floor in a Soviet hotel. The gym’s machines, reputed to be of the highest quality, looked like the low-budget machines one might buy on the Home Shopping Channel. Walking on the treadmill caused it to sway from one side to another.
But then, the gym was not really intended for use by hotel guests. The second day after I arrived, I asked the front desk for directions to the gym. “It is occupated,” said the snippy woman behind the desk. It tuned out the gym had not only some workout equipment but also two easy-chairs (for the bodyguards) and a full formal dining-room (for the hosts and guests). The gym was used for private parties by those who insist on entertaining in a window-less dining-room located between the weight-machines and the swimming pool and sauna. In the Soviet era, the gyms were a center where criminal groups congregated—and according to the press, plan their activities. However in 2004, it’s hard to believe that a fitness center could be anything more than a place to work out.
Just as the hotel lied in their advertising, so the Government was less than accurate about its statistics. The official numbers are that the stock market capitalization is 18 percent of the Gross Domestic Product (GDP) but the stock exchange could not substantiate the number, which is more likely to be less than one percent of GDP—negligible was my description in my reports. Such deception makes me angry and forces me to check and recheck every piece of information that we receive.
To make life still worse, the two Sunday mornings that I was in Chisinau were full of very noisy celebrations. The first Sunday was Victory Day when the Soviets defeated the Nazis in 1945. Rockets were blasting before 8 am that morning. I wasn’t certain about the second Sunday, but by 9:00 am the park across from the hotel was full of marching bands with loud drums that made it difficult even to hear the T.V.
Observing daily life in Moldova also made me angry. In the evenings, as I waited for my dinner to be delivered, I watched night after night as the thugs and the prostitutes conducted their business in the hotel and the restaurants nearby. Moldova is the primary exporter of prostitutes into Russia and the activity is so pervasive that some seems seem as young as 15 or just 14. Prostitution is one of the primary sources of income for the local crime groups. The international press indicates that in Moldova, the market price to buy a woman (as a slave) is just $49. Nowhere else in eastern Europe is the value of a woman set so low.
My evening analyses gave me a chance to refine my analysis of how to identify a prostitute. If she is wearing a shirt, then the skirt’s side-slit (or even the entire skirt) must come to the panty-line. Jeans not only should be skin-tight, they should separate the two checks of the butt. Three-inch skinny heels are also a minimum requirement but behavior is probably the best indicator. Prostitutes in this part of the world seem to come in pairs. In bars, they sit at tables across from each other with a single drink or coffee in front of them for hours on end. But they don’t generally talk. They just sit at their table, watching their cell phones. Moldova has so many prostitutes that it’s possible to separate the amateurs from the pros. The amateurs talk among themselves and may be in groups of three or four. The amateurs will also reject an approaching male if he tries to touch one of them too early in the process. It is rumored that the current fiancée of one of America’s tycoons comes from Moldova—a beauty-queen by all accounts—but I wonder how one can come from such an environment and not be desperate for wealth.
I think that for women in poor countries, beauty is needed for economic survival and good looks are a commodity in which women invest money and time. Such emphasis on beauty turns out to be helpful for me. Days of internal anger and insufficient show their effects on my nearly 52-year-old face. As is my custom, I selected the woman at the front desk with the best skin and asked for her recommendation of a facialist. The best facialist in all Moldova was working in the hotel, I was informed.
When I arrived to visit the facialist (also called Anna), I told her that I was from Washington. She mentioned that one of her former students was in Washington and that I should visit her former student, Svetlana. After a few minutes, while Anna was doing the massage, I asked her for Anna’s last name. I couldn’t believe that Anna was referring to my facialist for the last ten years. Anna told me that she was Russian, from Moscow, and had never mentioned Moldova or other Soviet republics in all the years that we had discussed the former Soviet Union. At some point in her life, Svetlana was in Chisinau and had learned her trade from Anna, this 62-year-old lady working in a windowless basement in a hotel thought to be owned by mafia. Anna was very good. She told me her hand-made creams had won international awards and they proved to be better than the creams that I buy for $80 a bottle.
In Chisinau, I also found also the best tennis coach I have had in over five years. Viktor spoke only Russian, of which I know only a few words, but his hours of hitting with me gave new intensity to my tennis strokes. For $10 an hour, Viktor ran all over the court to give me perfect shots from which I could practice different strokes and strategies.
I don’t know if I will go back to Moldova again. I worked out some suggestions to deal with the worst of the corporate governance abuses—such as require that joint stock companies obtain an annual independent fraud and make the board of directors legally responsible if they fail to prevent fraud—but such innocuous recommendations threaten some powerful business interests that have the parliament well under their control.
Just in case, I visited all the other hotels in Chisinau to see if I could find one that was better managed than my hotel and I gave Anna and Anna and Viktor a big hug to say that I hoped I would return. If my ideas are accepted, they could make a difference in moving towards legitimate businesses. But that is a big “if”.
Sue
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