Wednesday, October 26, 2011

How to Succeed in Business

When I received my Peace Corps invitation to Armenia, my assignment was described as a “Business Development Advisor”.  While my work so far has not really involved directly advising businesses, I have had some opportunity to observe how things are done here.  

As with most aspects of life, the business world is still affected by the remnants of the Soviet period.  I have written before about corruption which remains a fact of life here and influences how business is done and the cost of doing so.  I have also written about how the lack of trust interferes with making sensible business decisions that could result from working together.
Meanwhile, the education system as it is produces people that have limited entrepreneurial skills or direction about where to go.  There are business universities here and I have worked with students in two so far.  The universities here are different from the US in that the curriculum is set (with no electives) so everyone has the same classes without areas of specialty like marketing, accounting or economics.  But when asked about what the students want to do after graduation, the answer is often “I want to work in a bank”.  Follow up questions about why are met with silence – it seems the reason is that there are jobs there, with no thought given about what function the job would be or why the person is interested in banking.  But the students I spoke to this week gave even more surprising answers: kindergarten teacher, working with the elderly or orphans, child psychologist.  It is unclear why they are attending a business school.

It seems that the concept of a business plan is something foreign here.  I have seen several business owners spend months getting a place ready to open which then closes within a matter of weeks.  Most banks require a business plan to get a loan, but we were told in training that people are hesitant to supply them since they fear their ideas will be stolen [since many small businesses seem to duplicate existing ones the fear of copying seems to be self-reflective].  Combine the seeming lack of a plan with loans’ typical interest rates of 20% or more and it is easy to understand why many fail.  A person I have been working with at an NGO asked for my assistance in putting together a business plan for a venture to make money for the organization.  I asked a few basic questions to help get the plan started (Is there a market for what you are planning to sell? Will you be able to get the materials at a cost lower than you can sell for?) but I never got a response.  Nonetheless, a donor organization funded the purchase of new equipment and people are being trained to use it.  The source of materials and a market for the product are still open points but I have been asked for suggestions about how to advertise the venture.

The government is taking steps to make Armenia a more favorable business environment and it has moved from 61st place to 55th in the World Bank's "Doing Business" annual report about 183 countries.  In a similar Forbes ranking, Armenia moved from 96th to 89th of 130 countries.  For example, it used to take an average of 39 days to register a business, including multiple trips to multiple agency offices (all in Yerevan) to get approvals, etc.  An online process was initiated earlier this year, allowing a business to be registered in 15 minutes.  The tax system, though, is still seen as very unfriendly to small businesses. 

The prices of things tend to fluctuate more than I am used to.  As I mentioned early this year, the forces of supply and demand doubled the price of eggs in time for New Year.  Since then, the price came down to a level that was higher than the New Year spike but lately I have seen fluctuations up and down.  While in the US price hikes are rarely reversed (or announced very proudly if they are) here I never really know what to expect to pay.

Intellectual property presents another challenge to legitimate business.  Logos are very popular here as evidenced by the clothing people wear but trademarks mean nothing.  The logos are obviously fakes (unless Dolce & Gabbana are selling $5 sweaters and producing things in a joint venture with Versace and/or Armani) and many are misspelled (Adibas, Calvin Klaim).

I also think the newest restaurant in Gyumri is infringing on a trademark, although I can’t be sure.  

While there are movie theaters in some cities, hardly anyone goes to the one in Gyumri.  Instead, you can go to a video store and pay 500 dram (about $1.33) for a DVD with up to 10 movies on it, obviously pirated and badly dubbed into Russian.  I am told of computer stores where you can pay less than $10 for the full Microsoft Office suite.

In the Soviet era, Armenia was a sort of manufacturing and processing hub.  Raw materials were brought in from other countries (Armenia doesn’t have many) and finished goods were sold to the other countries.  When the Soviet Union collapsed, both the supplies and demand went away so most factories closed.  Since then, the search has been on for a replacement specialty beyond the brandy that Churchill helped to make famous.

The government believes that a viable tourism industry can be developed for Armenia and I agree that it should be – with the scenery, the historic landmarks, the food and the affordability of most things it is a good tourist destination (at least on paper).  When I was first coming here last year, a nationwide tourism campaign was winding down.  The theme was “Noah’s Journey” since Armenia reveres Mount Ararat where Noah’s Ark landed.  Too bad that the campaign inadvertently steered people to the other side of the border as Mount Ararat is in modern-day Turkey.  More recently, the main tourist office was closed (shortly before the government projection of a 20% increase in visitors).  It seems that the office was only drawing budget travelers and they weren’t seen as worth the expense of the office.

The projections of increased tourism seem to be coming true (although I am always wary of government statistics).  A recent article about the increase in tourists this year said that 580,000 people visits Armenia between January and September, an increase of 18% over the same period in 2010.  Most tourists to Armenia stay with friends or relatives though - the article mentions that the number of people staying in hotels between January and June 2011 was only 52,500 – so the impact on the economy is not what it could be if more non-diasporans were to visit.  Hotel occupancy rates are extremely low (I have heard a figure of 27%) but most hotels have restaurant and wedding businesses that they make their money from.  

I am working on a tourism project specific to Gyumri and, in connection with that, we tried to get information on all of the hotels in the city.  There is no complete directory of hotels here and most rely on tour operators for their business with no focus at all on individual travelers.  None have online reservations, and the prices are very high compared to the relative cost of everything else.  Most don’t accept credit cards.

We recently got space allocated for a Gyumri tourist office but no funding will be provided by the city to operate it.  That is the least of the issues I recently identified as hindering tourism here (unpaved streets, lack of sidewalks and street signs being some others) but the sense is that tourists will come anyway.  After all, the mayor just built a new hotel…. 

As to businesses that do exist, they have peculiarities that I don’t often see in the US.  One thing you have to get used to is the different names that a store can be called.  A grocery store may have a sign that says խանութ (khanut, meaning “shop” or “store”), մթերք (mterk, meaning “provisions”), վաճառատուն (vajaratun, meaning “sellinghouse”) or առեւտրիսրահ (arevtrisrah, meaning “commerce shop) or it may have no sign at all.  

The offerings in what I refer to as grocery stores can be quite broad – the one store may sell fresh fruits and vegetables, soap and detergents, clothing, notebooks and, of course, candy and vodka.  In a village that is to be expected, but I see the same thing in Gyumri, where there are more specialized shops for stationery, hardware and home goods.  But one of my favorites has three main offerings – housewares, clothing and fireworks.

The larger grocery stores have separate registers for separate sections (reminding me of Nathan’s in Coney Island).  You get a few items from one section, pay for it and move on to the next.  While most of what are labeled “supermarkets” have centralized registers, one that I go to often has two floors and you need to pay for anything you buy on the floor from which you got it.

Usually, if you see a shop selling something, there is at least one other (sometimes more) in the area or even immediately next door.  In these cases, they usually sell the same things at the same prices.  While you can expect that is a place like the main market, it also happens with stores in other parts of the city.  I normally see two, three or four khanuts in a row or clustered in a small area.  DVD stores, fabric shops, clothing stores and hardware businesses are likewise on top of one another.

The blue tarp toward the right is a grocery store like the one on the left.  There was another across the street behind me.
One trend that makes sense, given the increasing average age of the population, is the recent openings of a lot of drug stores.  Two chains seem to be everywhere and one near me recently expanded but its competitor is opening in the adjacent storefront.  Given that this is par for the course in Manhattan, I suppose I shouldn’t see this as noteworthy.

Many businesses don't post business hours and window displays may not make it clear what is even sold. When they do have business hours, they don’t necessarily mean the place will be open.  Many don't advertise (and as I said above, some don't even have a sign), or may have flyers that are only available in the store.  

My gym is a good example.  It took me more than six months to find out the place even existed and it seems to survive on word-of-mouth as there is no sign.  Officially, it is open from 10 – 9 Monday through Friday and 1 – 9 Saturday, except when it isn’t – the women who clean may come in at 11 and tell everyone to leave; the owner may decide to go somewhere at 7:30 and close.

When a business does have a sign, it does not necessarily mean that what you see is what you get.  As I discussed previously about gender roles, I can assure you that these are not representative of who is working in gas stations in Armenia.

Restaurants also have peculiarities.  More times than I can remember, I have gone to one that has an extensive menu but then learn that many things on it are not available.  Better yet, I went to a café once with a group of fellow volunteers and we were told there is no menu.  We asked what they had and we were told “everything!”  We then asked for at least five things that are staples of cafes (pizza, shawarma, kebabs, etc) and were told they did not have them.  We didn’t have the patience to try to figure out what they might actually have, so we left.

The merchandise in stores is also interesting.  In most stores, you buy eggs individually (although you can get cartons of 10).  Toilet paper is often sold in individual rolls, but not wrapped the way that Scott Tissue is.  While you can buy it packaged, butter is often sold in irregular sizes and you pay by the kilo.  Cereal, pasta, flour, sugar, rice and other staples are bought by the kilo – sometimes in pre-packaged amounts, sometimes not.  And every grocery store has a wall or aisle dedicated to vodka, wine and brandy and another devoted to candy and cookies.  

Many other small businesses I see are of a few types - beauty salons, internet cafes, cel phone retailers, auto parts and tire repair, bridal salons selling flowers and renting wedding dresses.  The larger businesses are foreign owned (the primary phone / internet companies) or owned by "oligarchs", the rich Armenians who have connections with or are part of the government.

Despite all of these issues, sometimes you see things that seem to be done in a well thought out manner.  Recently, a game arcade opened near the center of town.  It was remarkable because it was something the city did not already have, a lot of money was obviously put into it, the location is great and it seems to have been laid out in a way that is customer friendly with prices for the games that are not outrageous.  We wondered about how someone would be able to afford such a venture and this weekend I found out – it is owned by the mayor’s brother.
But it does have Skee-ball....

Monday, October 10, 2011

(500) Days of Armenia

Today is my 500th day in Armenia (officially at least – I am not subtracting the days I spent in Tbilisi this year).  As I am obsessive about time markers, I took this as another opportunity to reflect on my experience to date.  

While it is too early to summarize what I think of my accomplishments here (I will do that when I am finished next year) some things have changed since I arrived that are worth noting and I will also take the opportunity to update some of the things I have written about in earlier posts. 

In my first post, I answered some commonly asked questions so I will revisit those (modified in some cases since the passage of time has rendered some moot). 

Am I happy?  The answer to that depends on the day.  I have days that I just want to stay inside my apartment, but those are very infrequent. I have days when I need a mental health break from everything and sit in the park and read or hang out with other volunteers.  But mostly I am still happy. 

The honeymoon period here ended long ago but I am not itching to go home.  It is easy to get frustrated (as I have and other volunteers tell me they have also).  As you get settled into your assignment, get involved in secondary projects and go about living your day-to-day life, you have to acknowledge that you often don’t have the answer that people want, that they may not want what you want to give them, and that you may never get accustomed to why things are the way they are. I am not sure if it is the overall slower pace of life, getting more comfortable with my expectations here or what, but I am getting better at letting it go and not letting it drive me crazy.  There is only so much I can do.   

It also helps to realize that, no matter how hard you try, you will always be an outsider who does not have the history of the people you encounter daily – as much as I read or hear from people, I will never know what it was like to live in a Soviet regime, live through an earthquake or not be sure whether I can afford dinner or heat for my family.  As long as I accept that, I will probably be fine.  I chastise myself when I make a cultural error and try to rectify it, but knowing that I get a pass because I am a foreigner makes it easier.  

I still get “memory flashes” about things and places in New York and they are more frequent now.  But, similar to how I described them before, they are like things I am looking forward to seeing again as opposed to things I am homesick for.

Am I feeling OK?  The answer is most of the time.  I have gotten colds that are no worse than I normally get in New York - they seem to last less time but they tend to make me more tired.  I had the flu in January and am half expecting it again following my mandatory flu shot next month.  I have occasional GI problems, but much less often and severe than some of my fellow volunteers (I can count on one hand how often I have had unfiltered water and I think that is part of the reason).  I am exercising regularly and usually sleep well so no worries in this area.

How is life living alone in a strange place?  [The question was originally about life with my host family].  It has been great although the comments I get occasionally remind me of how odd it is for people to see me live alone.  I am often asked who cleans my house (I do), who cooks my food (I do), who washes my clothes (I do).  A coworker recently suggested that some of the volunteers from my work site (almost all are female) come over and clean for me.  The lady who owns a store I frequent was astonished when I said I was going to bake something.  Upon entering my apartment once, my landlady remarked about how clean it is, the surprise evident in her voice.  Since partaking in the Vardevar water fights, I have developed a fan club of kids in the neighborhood.  My landlady cautioned me after seeing me talking to some “bad men” on the corner.  Most of my neighboring mothers and grandmothers say hello to me when I walk past now.  It seems they are seeing me as a neighbor now.

What is my typical day?  I get up between 6:30 and 7:30 and do my morning exercises.  I visit my usual web sites and have breakfast (lots of eggs and oatmeal).  Assuming the water pressure is sufficient, I take showers most every day (and if not, I can get by without for a day or two).  I work at my primary site from 10 until 1 and have lunch then. I work on other projects in the afternoon (English club, Business English class, various other things such as HIV training seminars, editing English translations, reviewing grant proposals, tourism plans, helping other volunteers with grant proposals, etc, etc, etc).  Several days a week I go to my gym and or shopping for food.  I cook dinner somewhere between 6 and 8 and occasionally go out to eat or to another volunteer’s house for a group dinner.  I read, watch movies or write most nights until 11:30 or so.  On Saturdays I go on long walks while the weather permits and go to Yerevan maybe one weekend a month.  On some Sundays I go to a movie club (movies dubbed into Russian, discussion in Armenian so I only go when I have seen the movie before). 

Nothing overly exciting but not boring either.

How is the food?  Still good although different now.  As I detailed a few posts back, I am cooking a lot more and enjoying the experience but, as a result, I am not having as much Armenian food as I used to.  I still like dolma but don’t imagine myself making it, and I am not unhappy to no longer eat hot dogs and eggs for breakfast.  I am surprising myself with how much less meat I am eating and doing fine without it.  I have by no means become a vegetarian (I still love eating khorovats and any time I grab something quick it is normally a meat kebab or shawarma) but something like buckwheat can be very tasty and filling, as can vegetable soups and pizza.  While meat is pretty expensive given our living allowances, the cost is not a factor as much as realizing I like these other things that are full of protein and pretty tasty.

As far as cooking goes, my first attempts at bread were successful and I will start branching out to flavor it differently. And there are a lot of other recipes I am anxious to try (red wine chocolate cake?  why not?)

Unlike the first few months I was here, I don’t eat candy as much (maybe one Snickers every two or three weeks instead of daily), but I am baking sometimes so polishing off a plate of cookies is not unheard of.  I am back to rarely drinking soda but my alcohol consumption is more than in Solak (although still down from New York). 

How is the language coming?  At this point I have to say that it has plateaued but mostly for my lack of studying.  After my tutor got too busy to work with me last spring, I have not hired another and have tailed off on my self-studying.

Having said that, I can definitely speak better than I did last year and moved up a notch when we had our language proficiency tests in July. I can carry on a conversation and often surprise people who don’t expect me to be able to speak any Armenian.  I try to learn a few new words every week and absorb words by examining how they are constructed of parts that I already know and I have gotten pretty good at writing emails in transliterated Armenian.  But Armenians tend to speak very quickly and my listening comprehension is not really good enough to follow what is going on in a meeting, I still struggle with the longer words and the letters can still trip me up when I try to read something (again, especially the long ones of which there are plenty). 

I am pretty sure that I have not made any colossal blunders lately as I know I did early on, and have avoided some others that I have heard about (not too surprising, for example, when the words for “ice cream” and “condom” are very similar).  But one thing that I fail to understand is how sometimes people don’t understand when I do mispronounce something but the context would clearly indicate what I mean.  As an example, the words for “cold”, “mountain” and “tree” sound very similar, but one would think that if I ask for a “tree beer” when pointing at beer bottles, it should be obvious that I am asking for a cold one. 

Without having grown up with the language, I don’t know to what extent context plays a part in how people process what they hear since I am told that the words in a sentence can be moved around without changing the meaning.  It may be one of the things that you need years to understand the subtleties of, but it is hard to motivate myself to pursue that knowing that I may never speak the language again after I leave next year.

What is Gyumri like? I have written at length about different aspects of Gyumri but I would summarize it as a small town dressed up like a city.  By that I mean that the nights are very quiet, everyone seems to know everyone else and it is a very conservative place.  As I have said many times, Armenia strikes me as a pretty easy place to be sent with Peace Corps and Gyumri is a pretty easy place to be sent in Armenia.

So what else is new? Beyond revisiting the first post, here are a few updates to other things I have written about:
  • I am back to doing laundry by hand as my washing machine has proved much more work than it is worth in washing things.  I use the spinner part to get clothes ready for drying but the washing part is in the bathtub.
  •  I never made it to my Solak host brother’s party when he returned from the army as I was in the middle of the Border 2 Border walk in June.  Also, one member of my Gyumri host family moved to Russia and his brother won’t go in until at least next year since the draft age was increased, so I still haven’t been to an army party yet.  Still no wedding either but I hope to experience Nor Tari this coming year.
  • I now feel very comfortable getting around the country by public transportation although recent events have made it more difficult.  In an effort to improve the quality of life in Yerevan, the mayor abruptly changed the locations of most inter-city marshutnis [I now need to go to the “central” bus station which is anything but central].  At the same time the subway fare doubled.
Recently, there have been many days when there are no marshutnis running into Yerevan (and sometimes none leaving).  I am sure it is a mere coincidence that these days coincide with rallies that have been taking place to protest the governing party, since I can’t imagine anyone trying to undermine a protest by making it more difficult for people to attend or implying that the opposition parties are making life less convenient for ordinary citizens….  

I finally made it to the southern part of the country and the marshutni rides were quite an experience.  The region is beautiful and I tried to get a look at the scenery while also reading my book, but the roads are so bumpy and twisty that I also had to keep an eye on the kid next to me as his father had fashioned a vomit bag for him just in case (luckily it wasn’t needed).
  • I still have maddening conversations with women about their role in society and how they think men are more intelligent than they are.  It says a lot about the value placed on women when the Council of Europe raises an alarm about the rates of male and female births and starts to investigate whether selective abortions are taking place.
  • I have had conversations with people about the earthquake and the stories are hard to imagine.  One man was trapped for 21 hours until he was rescued.  A woman I know was in school and described how frantic her mother was trying to find her.  I heard a story about people coming from Yerevan to loot. And there are still something like 1,300 families waiting for permanent homes.
Today I was also asked about September 11 for the first time by an Armenian.  I have noticed that some people here are conspiracy theorists about various things but I was surprised when one guy asked me if Bush had arranged the attacks and whether bombs in the base of the towers really caused their collapse.  I explained what I know and he responded "Why would Bin Laden want to do that?".  He then tried to convince me that Bin Laden was killed in Libya.
  • I still hate how people treat dogs here but I must admit I now readily threaten a dog that is threatening me.  Unlike watchdogs I am accustomed to, I notice that many dogs here sit quietly and watch you pass and then make a move to attack after you have passed.  I still love dogs and don’t imagine myself harming one, but neither do I imagine myself going through another series of rabies shots.
So what now?  For me, this is now an odd point in the service period. The new group is still getting settled in, but most of my group will leave Armenia in nine or ten months.  I still have a second winter ahead of me but am starting to think about what I will do next summer.  I am comfortable with how to approach projects but have to start considering which of the new volunteers can take over for me if one needs to go on beyond next year.  I acquired a bunch of things from the volunteers who just left but am at the point where I don’t want to acquire anything else that can’t be worn, eaten or otherwise used up as I would have to get rid of it when I go.  

Many former volunteers have told me that the second year in Peace Corps goes much faster than the first.  I have gotten used to that phenomenon over the years as I have gotten older but already sense that the next ten months will speed past more than usual.  

The trick will be to keep an eye on the time to make sure I am not writing a post about all I didn't get done.