A response by Steve Taylor, Peace Corps Country Director, Western Russia, to Dr. Ron Pope's essay

I read with interest Ronald Pope's comments about the Peace Corps program in Vladimir. As the Country Director of the Peace Corps program in Western Russia, I'd like to add some factual information.

During 1993-94 the Peace Corps and the United States Agency for International Development helped to organize several business centers throughout Western Russia. Their goal was to provide technical assistance and advice for Russians in small and medium-size business development. In Vladimir Peace Corps Volunteers the Peace Corps teamed up with the Eurasia Foundation to begin the Vladimir Center-Foundation for Business Development.

Since that time some of the 12 original business centers have closed down their operations due to a lack of financial support from local sources, some have changed their focus and some, now staffed and financed solely by Russians as was originally intended, have continued working.

As is mentioned above, the initial goal of the business centers was to provide technical assistance and advice for Russians (not money) by working together with them on the grass-root level and transferring to them business technical skills. Funding was provided only for a start-up period after which host organizations were supposed to finance the centers until they became self-sustainable.

The Peace Corps is not an investment fund, it is a humanitarian aid governmental agency and it does not have any intention of doing investment projects anywhere in the world. It's main function is education--both business and non-business. The Peace Corps provides their most valuable resource--highly educated professionals, many of whom have run their own businesses. In the case of Vladimir, Volunteers placed there over the last several years have included an attorney, a CPA and an experienced management consultant.

And, because our Volunteers live and work with Russians on a daily basis for two year periods, the Peace Corps is one of the very few agencies that can speak with authority about the real state of the Russian economy and its impact on the lives of ordinary Russians.

As anyone who has spent even a few weeks in Russia knows, the economy is in a constant state of flux. Russians themselves are often at a loss to explain the economic situation. It should therefore come as no surprise that Americans sometimes disagree. However, the very fact that Peace Corps Volunteers have been making a continuous impact in Vladimir--and in many other regional cities throughout Western Russia--for the past six years, at a time when the majority of other business development efforts, both in the public and private sectors, have come and gone, certainly indicates the value our Russian sponsors attribute to the Peace Corps program.

And apparently, not only Russian attribute value to our Volunteers and our program. The fact the Mr. Pope approached one of our Vladimir volunteers with a request to author a business plan for him, would certainly appear to be a recognition of professional competence. In addition, two of Mr. Pope's employees will participate in the Business for Russia Program. Our Volunteers were members of the panel that recommended sending the two to the United States for a five week internship where they will soon be learning much more about the practicalities of running a business in a market economy.

For the past thirty-five years the three goals of the Peace Corps have remained the same--to promote world peace and friendship through the following objectives:

- To help the people of interested countries and areas in meeting their need for trained manpower;
- To help promote a better understanding of Americans on the part of the peoples they serve; and,
- To help promote a better understanding of other peoples on the part of Americans.

I am very proud to be leading a program in Russia which is undoubtedly meeting each of these goals and, hopefully will continue to do so, into the future.

Steve Taylor Peace Corps Country Director, Western Russia

Ron Pope's response:

I just recently returned from two weeks in Vladimir--and I had a number of things to catch up on before I could respond to Steven Taylor's comments on my "What Is to Be Done?" essay.

I welcome the exchange of opinions. Further, I in no way want to impugn the intentions of the Peace Corps in general or the skills and dedication of its volunteers. However, the main point of my argument, which I do not feel Mr. Taylor directly addresses, is that there has been a lack of adequate "targeting" and effective follow through with the programs intended to assist small business development in Russia.

Simply providing "technical assistance and advice" has not proved to be enough in most instances that I am aware of. (I am not speaking of just the situation in Vladimir but throughout all of Russia.) As for investment funds, while I realize the Peace Corps itself is not in the investment business, someone clearly needs to do more to help line up prospective funding sources for small scale projects. Without investment funds, the advice frequently is, at best, useless and often even counter productive. (Expectations are raised only to lead to serious disappointment. This makes the program--be it the Business Centers or Business for Russia--appear to be useless.) I think it can very reasonably be argued that, especially given the substantial and growing Russian skepticism about aid from the West, if a project cannot be adequately implemented, it is best not to initiate it to begin with.

I am afraid that, overall, both the Business Centers and the Business for Russia Program have to be counted as failures, that is, we have to recognize that they haven't provided either the U.S. taxpayer or the Russians with a decent return on the substantial investment that has been made in them. (There has been too much emphasis on "numbers served" vs. "concrete results achieved.")

One partial solution might be to go back to past participants in the Business for Russia Program (and clients of the Business Centers), identify those who still show some serious promise, and then actively seek ways to help them actually get something done. This can include linking them up with prospective funding sources and/or prospective investors/joint venture partners. Especially if these are very small scale projects (e.g., a commercial cleaning service), the risks should be acceptable even in these trying times.

The emphasis NEEDS to be on doable projects that are adequately followed through on--not just on "projects initiated." Once again, I am confident that it CAN be done!


Business Plans

I did not ask a Peace Corps Volunteer in Vladimir to assist my business. Rather, I put him in touch with a Russian businessman who needed help in preparing a business plan. After the introductions, we provided significant assistance to this project. To the best of my knowledge, this remains the most viable commercial project this Volunteer has worked on to date. (It is viable because the Russian has the funds to cover expenses while the business plan is being prepared. A good many promising projects don't get off the ground for a lack of the necessary seed money.) It is not that this Volunteer would not be capable of assisting us. He definitely has a solid business background--and he is learning quickly about the ins and outs of Russian business and politics. (We have had several long discussions--and he has learned a great deal from practical experience.) However, he does suffer from the handicap of having to work through interpreters--and this does make a difference. He needs to be teamed with a Russian who knows English well and whom he can fully trust. This Russian also needs to understand business and politics. (I think he has finally managed to link up with such a Russian.)

Finally, this Volunteer's effectiveness is going to remain severely restricted as long as he and the Russians he is working with lack access to sources of seed money and venture capital.

Business for Russia Participants.

I provided letters of reference for 3 applicants to the latest round of the Business for Russia Program. Only one of the two who were selected works directly with me. We are partners in a joint venture remodeling business. He has been to the U.S. before, and we have discussed in detail what he might be able to profitably do in the brief five weeks he will be in the States this time.

All of the participants in this program that I have talked to, including during my most recent trip, have agreed that five weeks is too short a period to accomplish anything substantial in most cases and that the program lacks effective follow through. (I still think that more American hosts would follow through on their own if they had a better chance to get to know the Russians--and if the participants arrived with concrete doable projects in mind. OPIC political risk insurance for small scale projects would also help--especially in the wake of current events.)

I remain convinced that a great deal more can be accomplished in Russian than has been the case to date if the focus is switched form "numbers served" to "results achieved".....

Ron Pope