Russian emigrant: Putin has slipped into the dementia trajectory of former Portuguese dictator Salazar

In Russia, any private initiative, including pro-government initiatives, is forbidden. The authorities are panic-stricken by anything that defies their control. Under these conditions, private initiative has no place not only in politics, but also in business - says Konstantin Siniushin, an IT entrepreneur and one of the founders of the start-up movement in Russia, in an interview with Neatkarīgā.
04.04.2022. Andris KĀRKLIŅŠ
Konstantin Siniushin, the founder of the start-up movement in Russia, an IT entrepreneur and now a resident of Riga, believes that the Russian dictator Vladimir Putin is now on the trajectory of António de Oliveira Salazar, the former long-time dictator of Portugal, who suffered from dementia and a stroke in the last years of his reign and for whom his butlers specially printed all the world press publications except those that would make the leader angry ©F64

One of the leaders of the Luxembourg-based investment fund The Untitled Ventures, Siniushin realized about five years ago that it was impossible to run an independent private international business in Russia. He chose Latvia, Riga, as his new home, where he moved to live and work four years ago.

Why did you have to take such a radical decision to leave your homeland Russia?

I have been involved in private venture investments for the last ten years. But there is nowhere to invest, because it is impossible to sell any Russian assets abroad. And no Russian asset can be sold domestically at a competitive price. The people who leave Russia today are very different from those who stay in Russia. I have given several interviews to several English-language publications, during which we have coined a new term for those leaving Russia - eurorussians. These eurorussians have passports from the Russian Federation and mentally associate themselves with Russian culture, but they fully accept and support European culture and European values. Those who have left Russia in recent years are far from being people who go in search of cheap and tasty sausages. People are leaving Russia because, for various reasons, they do not have the opportunity to fulfil themselves while living in Russia. Putin has created a model of society in which the state regulates almost every aspect of life. Therefore, many creative people and those who work in international business do not have the opportunity to make a name for themselves. Business in the Russian Federation operates in two different and distinct segments. There is the competitive business, which is oriented towards the external international market, which is closely integrated into the world economy, and there is the rent business, which generates income within the country from certain state preferences. There is very little contact between these businesses; it would be more accurate to say that there is no contact at all. The situation in the competing business has deteriorated over the last 10-12 years. Factors such as business dissatisfaction with what is happening in the country have contributed significantly. Many would still be willing to put up with what is happening, but the main problem is that they are being prevented from working freely within the law. De facto, they are prevented from working in their profession.

What is happening can be likened to the first wave of emigration from Russia immediately after the 1917 Revolution. The only difference is that in Russia today they are not yet shooting people. In the first years after the revolution, those who escaped from Soviet Russia were greeted as heroes in the West. Today, those who escaped from Russia are not really understood in the West. Just before we spoke, I had read a publication on the centenary of the Russian emigration. It turns out that I had never known about many of the famous Russian emigrants living here in Riga. I knew about the actor Mikhail Chekhov (brother of the writer Anton Chekhov), the artist Nikolay Bogdanov-Belsky, the artist Aleksandra Beļcova, the businessman Matvey Kuznetsov, but nothing about many others. They have all contributed to Latvia at different times through their work here.

I am already up in years and I will probably never return to my homeland. There are many like me. We all need this second homeland. Man needs a homeland. He cannot be a nomad all his life. Man needs a place where he builds his nest, where his children are born. For us Russians, that is the problem at the moment. Judging by the press, Europe is not very aware of this problem.

Your story is very similar to those of people who left Russia and settled in Europe because they cannot live in a country ruled by a dictator. What can we all do in this situation?

To begin with, at least what we are doing at the moment: using the power of the media. The media formulate the public message. Politicians have their own signals, their own convictions and considerations, which we, the people, do not always fully understand. It is not what politicians think that is important, it is what ordinary citizens think. We want to convey the message to the public that the representatives of the current Russian emigration are, at the very least, not enemies of Latvia. They are not revolutionaries who are ready to go to the barricades and fight Putin, but they are certainly not enemies of Latvia; they are infinitely closer to European values than to the values that have won in their country. We would very much like the public to hear these words from us. I stress that we are not enemies, at the very least, and we are friends, at the very most. We come here not only by ourselves, but with our business.

What would you most like to tell us about yourself?

This year marks 30 years in business. Not once in business have I worked with the state. I have never received capital from the state. Everything I and my partners have earned and acquired has been created with our abilities and talents. I once owned several IT companies. Three of the six companies did well in business. All the money we have made has come from foreign sources. We sold one of our companies to Softwahre AG in Germany. It is the second-largest German IT company after SAP AG. The other one we sold to EMC Inc in the US. It is also in the top ten of the ranking of IT multinational companies. Now this company has merged with Dell and is called Dell-EMC. Dell is in the top five of the ranking of IT companies.

The third company, ePam, is also an interesting story of a self-made man. There is a man Arkady Sorkin. He comes from Belarus. He went to the United States when he was young and founded a company there that creates software for customers. This company has been listed on the New York Stock Exchange for more than a decade, and its shares have been rising steadily. I was a minority shareholder in this company. I sold my share. By this I want to emphasize that all the capital I have earned is in no way linked to Russia. In recent years, I have been involved in private investments. Several years ago, I participated in the introduction of the venture capital market in Russia. I was one of the authors of the introduction of this program. Unfortunately, after a great deal of work had been done on a public basis, it turned out that the government of the Russian Federation did not need it at all and was in no mood to support private initiatives. At that moment I realized that there was a deadlock - I don't want to work with the state, but without the state it is impossible to do anything. That was the main motivation for leaving Russia. Here, together with our Western partners, we are planning to set up a large international venture investment fund to invest in those projects that have been forced to leave Russia, Belarus and Ukraine. Only high-tech projects with a scientific creativity component are considered for investment. Last autumn, we opened an investment fund operations office in Riga. Our reasoning for an office in Riga is that the operations office should be close to the borders of the countries of interest. The fund itself is based in Luxembourg and has no connection with money from the Russian Federation. I am the only one in this fund with a Russian passport. We have already invested in three projects. Two of them are being developed here in Riga. One of them - local guys have created a unique plasma spraying technology. It is designed for hydrogen extraction electrodes. This technology will help to coat the electrodes in a more efficient and economical way. Platinum has to be deposited on the hydrogen extraction electrodes. Current deposition technologies consume a lot of platinum and the coating on the electrode surface is uneven and of varying thickness. Platinum is an expensive metal. If it is applied unevenly and uneconomically, losses are incurred, but that is only half of the problem. If too thin a layer is applied to a small area of the electrode, or if it is not applied at all, the electrode burns out. The local guys, with their application technology, achieved a very even and comprehensive application. This not only saves platinum but also extends the life of the electrode. The guys plan to produce these electrodes and supply them to hydrogen plants. This is a very promising investment. After all, it is investing in green energy.

The second project is the production of small UAVs, up to 25 kilograms, here in Riga. The factory was set up by a team that moved from St Petersburg to Riga. A full production line has already been installed. The company employs 25 people, 10 of whom are St Petersburgers and 15 local specialists. This friendly team is also working to produce for the international market. No aircraft has yet been sold in Latvia. Locals are very wary of their products. Before buying, they check the Companies Register and see that the founders have Russian passports. They are afraid to buy. There is a caution against citizens with Russian passports. This is a real problem, and it has arisen since the war.

The third project is also very interesting. It is being carried out in Gdańsk in Poland, by Belarussians who have fled the Lukashenko regime. It is the same story with the Belarusians as it is with us Russians. They, too, are looked upon with great caution in Europe, even without taking into account the fact that they have run away from Lukashenko. All three of these projects have been developed in the last three months and we intend to continue our activities.

Are you also making a name for yourself in Riga, Latvia?

Before the war, nobody was interested in what we were doing here in Riga, on Baznīcas Street. Now people are starting to look at us and wonder what is really going on here, who we are, where we are from, what we are doing, and who benefits from it. On the one hand, this is very good. We are open and ready to tell and explain everything about our work.

For example, let us look at Israel, which was a military agrarian state thirty years ago. Nobody could have imagined that the business of innovation could develop in Israel. What happened in those thirty years? A very simple thing. From the early 1990s onwards, a huge number of Jewish people repatriated to Israel from the USSR who, unlike many of the local Jewish people, were very well educated. These educated Jewish people from the USSR filled Israeli companies, worked hard there and brought up their children on Israeli soil. These children made Israel the technological superpower of the world. Latvia does not have such a huge emigration abroad, which could return and make a similar contribution. But that's okay. Use us! We are ready for it!

I am a fifth-generation Moscovite. I was born in Moscow, studied, finished school, graduated from Moscow State Technical University with a degree in programming. From 1988 to 1993 I worked in a Russian scientific research institute designing nuclear space reactors. I worked in the department dealing with orbital tests. Working at the institute gave me good engineering knowledge and skills. During those three years, I was involved in the creation and testing of countless innovations. It was a time when it was impossible to start a business with a lot of capital. By chance, life led me into the IT business. The advantage of IT business is that you need two things to make a business - a head and a computer - and you can start making money.

When you decided to leave Russia, why did you choose to go to Latvia instead of Lithuania, Estonia or Poland?

Good question. I made the decision to leave Russia about five years ago. But in order to make it happen, I needed to finish the work I had started in Russia. I realized that I would not be able to live between two countries. We decided as a family: if we move, we move completely. Now it will be more than two years since I lived in Riga. We managed to get half of our assets out of Russia, but the other half we didn't, and it looks like they will just have to be written off. There will be no economic return from the businesses in Russia. These are losses that we have long since come to terms with. We have bought two apartments here. We have already settled in.

But why did you choose Riga?

When I chose the new place to live abroad, I looked not just where I could live freely and well, but also where there was a community that we understood and geographical proximity, the border with Russia. Only Estonia, Latvia, Lithuania are such countries. We started looking at how each country supports innovation and start-up programs in business. We concluded that Riga has the most favorable conditions. Moreover, we had a good relationship with the previous management of the Latvian Investment and Development Agency. Olga Baretu-Gonsalvesa worked there and she was involved in start-ups. Now she is the Executive Director of the Latvian Start-up Association. That was the rational factor. The emotional factor was also decisive. I like Riga much more than Tallinn or Vilnius. First of all, Riga is a very beautiful city. Secondly, as a Moscovite, I like it very much because it is very compact. My wife and I get around the center of Riga only on foot. There is no need for a car here. I also have fond memories of Riga from my childhood. My mother and I used to come here a lot for holidays.

How do Latvians perceive you?

We have local friends. We have good relations with Latvians. I work a lot and I cannot yet boast of my success in learning Latvian. I can deal with written text, but I am not so good at speaking. My wife, on the other hand, is actively learning the language. A little more and she will be able to communicate fluently, on an equal level with the locals. Our belief is that you have to know the language. I have to admit that people in Riga are very kind. We have not yet encountered a situation where we were not spoken to because we speak Russian. There have been cases of communication with young people who simply did not know Russian. We immediately switched to English. There is no doubt that by speaking the local language it is possible to grasp the subtle scope of contexts and it is possible to build much closer relationships.

How safe do you feel here in Riga?

Absolutely safe! Not once have there been any incidents. Now there are the specifics of the war situation. I know several people who have run away from Russia to here in cars with Russian plates. They told me that they often receive the side-eye from people. But we are understanding about that attitude. Perhaps it will all calm down and people here will realize that if a person has run from Russia, it is not just because.

What does your intuition, your heart, say: will Vladimir Putin succeed in expanding Russia to the extent of the borders of the USSR?

I am very skeptical about Putin. Everything he does is a reflection that shows that he does not understand that his era is over, that this is the era of private initiative, the era of the creative economy. All he is trying to do is adapt the old Soviet recipes. Because of these Soviet recipes, the USSR also collapsed, and his recipes will also fail. But it will not happen quickly. Remember how many years it took for the USSR to collapse. In this case, however, international sanctions will speed up the process. If we are talking about this war, it looks like he is living under some illusions of his own. As I understand it, they hoped that Ukraine would surrender in three days, but they had no plan at all if Ukraine did not surrender. Now there this conflict is frozen. The worst that can happen is that fortified lines will be established for many years, with military clashes between them. Russia does not have the military resources to go any further. Then mobilization must be declared. Putin does not want to announce mobilization because it would undermine his rating. It is one thing to look at pictures on television; it is another thing to receive letters from sons at the front.

I assume that in Russia too, especially in the big cities of Moscow, St Petersburg, Yekaterinburg, many are against the war. If that is the case, why is there no change of power in the country?

Time must pass for that. That is also what my friends here are asking me. We can compare how the situation now differs from 2014. The difference is that in 2014, Putin got Crimea without bloodshed. Most people are aware that it is bad to shed blood. The sharp rise in Putin's approval rating in 2014 is due to the fact that everything happened without bloodshed. Things are different now and the public reaction is different.

How does the Latvian economy benefit from the influx of innovation businesses into Riga and other Latvian cities? Does it just mean new jobs or something else?

My first thought was to move to Portugal. Then, at one point, my wife and I realized that it was a completely different world. Maybe as a tourist I wouldn't go to Latvia, but because I had to choose a second homeland, we took an incomparably more careful approach to the analysis. We realized that we would not feel as comfortable in Portugal as in Latvia. Latvia is an understandable country, even though its image is thoroughly demonized on Russian television. Moreover, Latvia has a fantastically good tax system compared to other European countries. In the first weeks after arriving here, we were shocked to find that the locals really dislike everything here. But we liked everything. What can we contribute? Firstly, companies are being established in Latvian jurisdictions which generate revenues from exports. These are not businesses that will compete in the domestic market, for example with the producer of the tasty curd snack Kārums. From a macroeconomic point of view, prosperity is determined by the proportion of revenue that comes from exports. If money flows into Latvia from exports, that is a good thing, because it will land in local banks, which will be able to extend more credit on better terms to borrowers. The main thing is that those who come here are well-paid professionals. For example, while the average salary in Latvia is just over a thousand euros, those who come here from Russia have an average salary of three thousand euros a month. They spend this money here - going out to restaurants, buying and renovating homes. It is important that taxes are paid on their earnings. I have studied statistics. Latvia has the highest per capita export earnings among the Baltic States. This means that, in most cases, even the smallest company, employing even just ten people, is trying to export its products.

How will the war in Ukraine end for Russia and Putin?

It will certainly end badly for Russia, but for Putin, it depends on how long he is going to live. When we were about to move to Portugal, I was researching Portuguese history, which was practically unknown to us. It was ruled for 40 years by António de Oliveira Salazar. During the first half of his reign, Portugal flourished fantastically. Then, at one point, he lost his mind. That is how it tends to be with a person who has been in power for more than twenty years. In Salazar, too, irreversible processes began. The insanity was compounded by a stroke. Nevertheless, he was still a sacred cow - the head of Portugal. Things went so far that the entire world press was printed especially for him in a single copy, so as to remove those publications that might upset Salazar. The impression is that Putin is on Salazar's trajectory. I would not be surprised if for him, too, only news that will not upset him is being prepared. I cannot rationally explain any of what he is doing. Either it is a consequence of dementia or the man is realizing his childhood traumas. After all this, Russia will take a very long time to recover, just like after the collapse of the USSR.

You see the protests opposite the Russian Embassy in Riga. Latvia, like other European countries, is helping Ukraine and Ukrainian refugees. Where do you see your role in this process?

We are also helping Ukraine. In cooperation with our colleagues, we are helping Ukrainian start-ups whose offices have been bombed or whose employees have died. We will definitely do the next deals with Ukrainian start-ups. In addition, we participate in several charity programs. We have just paid for the transport of 100 Ukrainian refugees from the Ukraine-Poland border to their accommodation in Germany. We also financially support many other initiatives.

You are an educated, inquisitive person and you are able to find information according to your own needs and understanding, but a tractor driver in Irkutsk, for example, probably enjoys the information that is presented to him on state television, which is why a large part of the people support what is happening in Russia. Is this not to the detriment of Russia itself?

It is, but there is nothing that can be done. I have been reading memoirs of the Second World War, which were banned in Soviet times. The memoirs were written by a Soviet army lieutenant. He described how he met American soldiers at the Elbe River in Germany in 1945. They were drinking and trying to talk to each other and tell each other how they lived. The American listened in puzzlement about the evil Stalin and then asked: but why don't you elect someone else? It's typical. Even now, people outside Russia ask: why don't you elect someone other than Putin? Well, we do not elect someone else, because there are no elections. It has already been shown that all elections in Russia are rigged. We do not even know what the people think. I have at my disposal data from a study carried out by an independent sociological research company operating in Russia. It shows that 38% are against the war. There is also a large percentage who are unsure. More than 50% support the war. But it is also necessary to understand the information vacuum in which the nation lives. The Western media have referred to studies that are Russian propaganda sources and which show a very small circle of opponents of the war. It should be borne in mind that there has long been no objective, independent sociology in Russia, just as there are no fair, just, democratic elections. The craziest thing is that 3/4 of the respondents to this company refused to answer the questions at all. This makes it extremely difficult to obtain objective data. Interestingly, the survey still contains a breakdown by income. It turns out that people with lower incomes are less supportive of the ongoing war than people with higher incomes. This is atypical. We discussed this with friends. Many of us remember the good old joke about Gorbachev raising the price of vodka. The son comes to his father and asks: Dad, are you going to drink less now? The father replies: No, you will eat less! Yes, perhaps I am finer in manners than a tractor driver from Irkutsk. But seriously, there is no clear correlation.

Why is there a long political passivity among people in Russia?

This passivity was ingrained in the people for many years. You will be surprised, but the state has now banned all private initiatives, including those in favor of war. There are opinion leaders in Russia who say: we must conquer, we must annex. But they, too, are under close state control. The state is afraid of any unauthorized expression, even if that expression is in favor of the current government. The state thinks: just because they are supportive today does not mean they will be supportive tomorrow - it is better to keep them quiet. If you look carefully at the Russian TV channels, you will see that the same faces keep representing the people. The state authorities have assembled a group of actors who have to say certain phrases on certain channels at certain times for certain remuneration.

If there were a fair, impartial presidential election in Russia, who would you vote for?

I have not voted for anyone for a long time, because all the elections were a complete sham. There is a candidate to vote for, but we know nothing about him. But he certainly exists. We do not know him because the whole public space has now been steamrolled into the asphalt. Until we break up that asphalt, we will know nothing. The case of the poisoning of Navalny shows that the authorities have no inhibitions. Terrorism is normal practice. Power strikes mercilessly at those who stick their heads out too far.


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