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07.01.2015

Eduard Rubin: “Go to the Soviet Union, this is Ukraine – it’s a different country”

The founder and director of Telesens talks about the Kharkov community, the specific nature of doing business in Ukraine and the politics of the “transitional period”.

How did your business start?

I graduated from the radio engineering faculty of the aviation institute. I was always interested in computers. In 1987, after the creation of cooperatives was announced, in literally a few months, my partners and I created the first computer cooperative in Kharkov. Back then no one could run a business, because business didn’t exist in the USSR, and so everyone worked as they saw fit.

The first thing we opened was a computer gaming hall. We bought and sold computers, and then started to manufacture them. In the first years of the cooperatives, a lot of novice businessmen did this. Those who were close to the central ministries delivered entire shipments of computers. Others sold dozens, and sometimes hundreds of computers, directly to state enterprises.

In 1991, I travelled abroad for the first time. Over two months, I visited India, then France, then Germany. I realized that capitalism was not at all what we were told it was in the Soviet Union, and I decided to stay in Germany, and my family moved there too. I lived in Germany from 1991 to 1998. I started my own business, at the same time studying how business was run, and I graduated from courses at several business schools – financial and accounting. In the first years, I worked on trade with Russia, Ukraine and Belarus. In 1995 I discovered the Internet, and a year later I created the first Internet project, and then several more, but in the 1990s there was still not a demand for them on the market. I had a dating agency, a live journal and a virtual catalogue.

In 1998 I returned to Ukraine, but now as the employee of a German company that organized a development project for software in Ukraine. We were one of the first IT companies with foreign investments in Kharkov.

What were the specifics of doing business in Ukraine?

In the period from 2010-2014, depressing processes began in the country. Raiders started pressuring businesses everywhere, but this process passed IT companies by. This is because of the special nature of IT business. In any IT company you have around $1,000 per employee – furniture and computers. The entire value of the company is people and intellectual property, and these things cannot be stolen. When raiders go to a factory, they can see what’s there – the factory, the building, the machines. The managers are replaced, and the factory keeps working. In an IT company everything’s different. Say the company gets pressured into taking on a new manager. But if the team doesn’t accept him, then the company will collapse. And also, contacts with clients usually depend on the managers. If you remember that the clients of this company are from abroad, it becomes obvious that no one is going to work with a company which has been raided. This is what saved our industry. But the law-enforcement bodies continue to put on a “show”, seizing offices and extorting money. All of this has happened, and unfortunately it still happen.

Even after Yanukovich fled the country?

Yes, after that as well. It happened to us too. I even wrote about in the article «АТО в IT». The old personnel are still in their places, and while the leadership deals with the country’s problems, they do their old work. They come and say: “In accordance with our suspicions, we must take away all your computers for inspection. This will take at least 30 days.” 30 days without computers is a tragedy for an IT company. Of course, the management reaches an agreement with them and pays up, so that the case is closed.

I’ve also had to reach an agreement, as there was no other choice. I don’t think it’s right to criticize managers who are blackmailed into giving bribes. The work of my employees, responsibility to clients etc. are at stake. If I am blackmailed, I know that it’s pointless to try to seek help, as the entire system is corrupt, it’s better to pay a bribe.

Such things constantly take place in Ukraine today. You can only overcome corruption by passing special laws. For example, a law on the prosecutor, which would remove the right to hold such inspections, a law on purges in the police force, and changes to tax legislation. The laws that exist today do not allow any company to work, not only in the IT industry.

An official can always find fault with something. For example, if the door doesn’t open the right way, he will threaten to punish the violator, and the level of punishment may cause the business to collapse. It will be like the joke: “On his grave it is written: ‘He was right’”.

They say that corruption must be fought against. I don’t think we should fight it, we should root out the causes of it. I went to Georgia, and I was stunned by their reforms. A teacher earns $1,000, and a police officer earns $3,000. This employee will never take a bribe, he understands that he must work honestly, otherwise he will lose this income. I hope that this will all happen in our country. I regard what is happening at the moment as the problems of a transitional period.

What is “Jewish business”?

I wouldn’t divide business into Jewish and non-Jewish. Jews in Ukraine do business the same way as businessmen of all other nationalities. I work with Ukraine, Uzbekistan, Kazakhstan, Israel, Germany and America. My firm employs Jews, Tatars, Ukrainians and Russians. I don’t position my company as Jewish. All the employees know that I’m Jewish. At holidays I treat them to matzo. But we celebrate all holidays – Jewish, Ukrainian, Muslim. That’s fine, that’s life.

In our country we have Azerbaijani, Armenian and Uzbek business. When people come here, they group together to help each other, for they are foreigners in this country. Jews are not aliens here, they have been living here for hundreds of years, and so there is no concept of “being together in order to survive”. So I wouldn’t say that there is such a thing as Jewish business. It is common, Ukrainian business, we live here.

Do you take part in Jewish life?

Yes, actively. Like many people, I help our synagogue and community. Thus, we help to support the spirit of Jewishness in Kharkov. I respect our rabbi very much, I trust him, and I know that practically all Jews in Kharkov also respect him. Many people who didn’t use to accept themselves as Jews have now joined the community and begun to identify themselves as Jews.

I started going to the synagogue in Germany: I simply felt that I had to understand my roots, the sources and essence of Jewish life. I was 33 at the time. I also involve my four children with this. They should understand what the Jewish religion is, the Jewish laws, and at the same time they can be normal secular people.

A synagogue is not just a religious place. People go there both to pray and to meet. How does this happen in Kharkov?

Many Jewish businessmen in Kharkov come to the rabbi for lessons on Fridays or Sundays. He have people of different political views at the synagogue. Some are pro-Russian, some are pro-Ukrainian. But we try to find a common language, so that politics does not divide the community. I can’t say that I respect all the Jews in Kharkov, but we can always find a common solution to any disputed issues.

Do you argue over political views?

We do, but not to the point of reaching for a gun. I am quite radically minded, I support the pro-European path of development for Ukraine, its civilized choice. But there are people who say: “We grew up in the Soviet Union – Russia is our homeland and we want to continue living there.” I try to explain that Russia is not even the Soviet Union, if you want to go to Russia, then go there, this is Ukraine, it’s a different country, don’t deprive young people of a future.”

What are the people’s moods in the city?

There is a very strong divide in Kharkov. Many separatist-minded Kharkov residents joined the “Oplot” battalion, and went to fight in Donbass. Many of them were killed. The separatist and pro-Russian minded people who stayed in Kharkov are no longer prepared to fight for Russia, I believe. They see what is happening in Donbass, and normal people don’t want the city to suffer this fate.

Mayor Kernes also went to the Kharkov synagogue, who was known for his warm relationships with the previous regime and his “regional” style of work until a certain moment.

I wouldn’t separate the phenomenon of Kernes from the other mayors and the former president in this case. Obviously, no one can become a billionaire by doing honest business in this country. Kolomoisky, Kernes and Groisman had a relationship with the previous regime… Everything took place according to the laws that existed in Ukraine at that time.

After the revolution, the rules changed. Kolomoisky adopted a pro-Ukrainian position, he supports the present regime in Ukraine and has taken on responsibility for a very complex region. This is what he does, and he does it well. I respect him for it.

Kernes is also trying to readjust. It is harder for him, as he went further. But at any rate, he has stayed in power. If Kolomoisky held on to Dnepropetrovsk thanks to strength and unification of people, Kernes has held on to Kharkov thanks to cunning and an understanding that he personally does not want a destroyed city. I think that he simply promised both sides that all would be well. If the Russians come, we’ll be for the Russians, if the Ukrainians come we’ll be for there. He needs a city that he wants to live in. Living in Lugansk today is not much fun.

The last elections showed that it’s not all that simple. Kernes, as I already said, had a smart policy. The city was built, and roads too. He studied sociology in the city and found the factors that would raise his popularity, and he worked on improving them. So you can’t just tell people that they should re-elect the “bad” Kernes. Why is he bad? Before him there weren’t any roads or playgrounds. You can’t change people’s minds. And as for the fact that he is accused of stealing, the people firmly believe that “everyone steals!” People are afraid that someone else come along and stop doing anything at all. How can you blame them? You can only change the rules of the game, for rules in which corruption will not just be dangerous, but unprofitable. This is what we need to strive towards.

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