All-Russian foundation cuts red tape

August 16, 1996

Russia's first home-grown training foundation, designed to encourage the creation of a quality market-place for business, management and public finance education, has set up stall in Moscow and leading regional cities.

The National Training Foundation, established by a raft of Russian federal ministries and agencies, including the State Committee on Higher Education and the ministries of education, labour, finance and economy, is supported by a $40 million World Bank loan.

Its aims - to increase the supply of managers and finance experts for the emerging market economy; to improve civil service financial management; and to help training organisations tender for cash from Western donor organisations - may not sound revolutionary. But the fact that the Russian government has underwritten repayment of 80 per cent of the loan from the federal budget and the emphasis on quality, rather than quantity in the NTF's projects, is.

Sergey Sementsov, the foundation's western-trained executive director, said: "This is the first case in the history of Russia when the government has borrowed money for training and is committed to paying it back to the World Bank."

The foundation, which opened last year, has 30 projects running in Moscow, St Petersburg and Nizhny Novgorod (formerly Gorky). Working with university economics and finance faculties, business schools, banks and private training agencies, it emphasises inter-active learning, where students work on real case studies, use computer and information technology and use distance learning packages.

One big weakness in Russia's dash to the market economy is the poor standard in financial training, said Mr Sementsov, who moved from a senior management position with the Russian office of Swedish car company Volvo to take charge of the NTF.

Many business managers and postgraduates were completing training programmes with little or no understanding of key areas such as, tendering for business, designing business plans and competitive bidding.

"They often don't even understand the importance of not just doing the job, but doing it according to contract within the terms of reference set out in the job schedule," said Mr Sementsov, who was in the first group of Soviet managers to take a training course at the London Business School in 1989 and who later graduated from Harvard University's advanced management programme.

For business schools and universities the NTF takes a flexible approach: "We do not always insist on the repayment of grants. At the Moscow Business School we're helping to establish and develop a computer network and it would be unreasonable to ask for a return." Michael Moore, an assistant director at the British Council in Moscow, is working on a project involving the Scottish arm of the Institute of Chartered Accountants and a St Petersburg financial institute. The aim is to train 45 accountants, auditors and finance specialists from academia, business and postgraduate courses as management trainers. Mr Moore said the importance of the foundation's role in training could not be underestimated.

"We're working to create a critical mass of British involvement in the educational sector here. This foundation is unique in that it's the first time that Russian higher education has been able to develop its own proposals and tender direct to one organisation for funding."

Oleg Vihansky, of Moscow State University economic faculty, said it was too early to give a full appraisal, but said the NTF worked, "very quietly with none of the red tape associated with other agencies, like the Soros Foundation".

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