Commercial and Political Dynamics in Central/Eastern Europe and Russia
By David Larramendy, WG'06
Speakers:
Harvey Sawikin, founder of a $700mm hedge fund investing in Russia
Elena Poptodorova, Bulgarian Ambassador to the US
Bulent Gultekin, Wharton Professor of Finance, specialist in Eastern European Privatizations and former Central Bank Governor of Turkey
Val Kogan, the Mid-Atlantic Russia Business Council
Moderator:
Witold Henizs, Wharton Professor of Business and Public Policy
An ambassador to the United States, an American hedge fund manager, a Wharton professor and a Russian economist: coming from very different backgrounds, the panelists shared at least one key idea: their belief in the developing opportunities existing in Eastern Europe. They shared their views during an interesting panel discussion moderated by Witold Henizs, Wharton Professor of Business and Public Policy.
‘I sleep well at night because my money is in Russia’
Mr. Harvey Sawikin served as the ideal opening panelist. This former lawyer founded the Firebird Fund, a $700m hedge fund company specialized in investing in Russia and other Eastern Europe countries. His credo for investing: ‘tell me something contrarian to do’. He expressed his views on Russia, offering both inside as well as iconoclastic opinions about Russian regime: Putin did not stop corruption; he organized it via a ‘one-stop shop’. He ended his speech by discussing new opportunities, especially Romania which he presented as the model student of the IMF despite its France resemblance: ‘very chaotic, great deal of corruption’…
Bulgaria, or the virtuosity of EU agenda
Elena Poptodorova, current Bulgarian ambassador to the United States shared Sawikin’s optimism. With a strong belief in the development of her country, Mrs. Poptodorova presented the advantages of investing in Bulgaria, highlighting its strategic geographic location on the Black Sea, the positive impact of the process of adhering to EU, a well-trained force as well as low-wage labor. On the other hand, she also commented on the realities of her country by acknowledging the continuing presence of corruption and the low transparency levels. Nonetheless, she remains confident that these elements are still manageable and that the returns largely outweigh the risks.
Europe can be the moral leader of tomorrow’s world
For those who still believe that a Wharton Professor solely spends his time teaching and researching, Professor Gultekin is definitely proving the contrary. Just to name a few of our third panelist’s greatest accomplishments, Professor Gultekin ran the privatization process in Poland and served as governor of the Central Bank in Turkey. He shared with the audience his beliefs that in tomorrow’s multi-polar world, Europe had a fantastic opportunity: contrary to the US, Europe does not see the world as black or white, and its diversity gives it the potential for morally leading the world, if it is able to address two main issues: its ability to collaborate with the Muslim world (with the particular issue of Turkey’s admission to EU) and Russia.
Val Kogan, of the Mid-Atlantic Russia Business Council, was the last panelist. He presented us an optimistic vision of Russia’s development from a macro economic perspective.
‘Google is riskier than a Georgian bank’
The four presentations were followed by a Q&A session, where Wharton students were able to demonstrate their deep interest and knowledge of the region. Tourism and infrastructure in Bulgaria, a unified European foreign policy, future locations to invest (Harvey Sawikin bets on Georgia), or the attractiveness of Turkey, all questions posed by well-aware students gave the panelists the opportunities to further convince the audience of the high potential for economic development of Eastern Europe. When asked how risky it was to invest in this region of the world, Mr. Sawikin reminded us of a common sense of value: what is risky is to buy overpriced securities: buying Google shares today is definitively riskier than investing in a very under priced Georgian bank…
