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. Last Updated: 07/27/2016

Western Bosses Seen Uneasy About Russia

Western executives are more uncomfortable about doing business in Russia than in any other major emerging-market economy and many seem to have only a "rudimentary knowledge" of the country's booming market, a new survey has found.

In some of the most surprising findings, one in three company directors in the United States, Britain, France and Germany could not name the ruble as the Russian currency, while one in seven thought Russia's main product was vodka, said the survey, which was conducted by Datamonitor and published Thursday by British Telecom.

"Building Business with BRICS" polled more than 800 senior executives in companies from a range of sectors, with turnovers from $10 million to over $1 billion, on their attitudes toward doing business in Brazil, Russia, India, China and South Africa.

While 61 percent of respondents said it was "crucial" for their success that their business be able to work with the BRICS countries, 24 percent rated Russia as the BRICS country in which they were least comfortable doing business, compared with India at 7 percent. Less than one in 10 chose Russia as their most comfortable of the BRICS countries to do business in, with just 3 percent of the British respondents picking Russia.

The study also uncovers a marked lack of cultural understanding of the BRICS countries among executives from the four Western countries.

Fourteen percent said vodka was Russia's main product, a mistake that looks egregious against the backdrop of the country's well-publicized reliance on oil and gas. Russia fared best when executives were asked to name the BRICS currencies, with 65 percent correctly naming the ruble, compared with only 22 percent who identified China's currency.

"The research indicates that, within established economies, there is a good deal of uncertainty about working with businesses in Russia," said Richard van Wageningen, BT's chief for Russia and the CIS. "There is also an underlying trend of general ignorance about some of the most basic facts of business life in emerging markets."

But a similar survey in Russia would produce the same result, said Ivan Poliyakov, a senior board member of Delovaya Rossia. "Ignorance of each other's economic and cultural life goes both ways," he said. "Russian businesspeople are limited in their knowledge of Western markets because of restricted information flow between societies."

Poliyakov said it would be wrong for the West and Russia to see each other only through the prism of markets and investment opportunities. "There's need for larger, more harmonious relations between societies," he said.

More than seven out of 10 executives said Western firms were better equipped technologically than BRICS firms.

"Stereotypes are still dominant in Western minds and executives have a lot of homework to do if they are to be ready to work effectively with businesses in these important markets," Van Wageningen said. "Russian businesses have shown remarkable agility and speed at adopting new collaborative tools and technologies -- quicker, in many cases, than in the U.S. or Europe."