The memory of my first visit to St. Petersburg nearly 20 years ago remains remarkably vivid, despite what happened on my very first night there.
Back then, the city was still known as Leningrad and I was just 19 years old. By chance, my visit coincided with the anniversary of the Russian Revolution of 1917. As I walked along the main thoroughfare, Nevsky Prospekt, I was jostled by a crowd of tens of thousands, out celebrating (Russians love a good party, regardless of ideology). The atmosphere was a combination of July 4th, Halloween and Valentine’s Day. Children waved small hammer-and-sickle Soviet flags; proud parents smiled; couples strolled hand in hand. I had booked a table in a restaurant, and found myself sharing it with a young Russian couple. They spoke no English, but welcomed me warmly. The man ordered a bottle of vodka for us to share. When he opened it, he threw away the cap.
The bottle was empty by the time I left.
I reached my hotel in the early hours of the morning — I have no idea how I managed to find it. The crowds were still out in force, laughing, singing and waving their flags. For hours I had drifted with the flow, soaking up the happy atmosphere. While I recall few specifics of that evening, by the following morning, in the sober light of day, I was convinced that this was my favorite city on earth.
It still is.
In the past two decades, St. Petersburg has changed almost beyond recognition — and so have I. Nevsky Prospekt remains as bustling as ever, though the pedestrians are better-dressed and the drab state-run shops have been superseded by slick international boutiques and fast-food restaurants. Gone are the old Communist slogans, replaced by billboards for Nike and Coca-Cola. The geography is the same, the glorious architecture is the same; but it’s a different city, a different country.
The transformation is as dramatic as switching from black-and-white to color. Sumptuous palaces, royal statues and fabulous cathedrals did not sit easily under the austere rule of the Communists, but the city is no longer coy about its imperial origins. St. Petersburg was conceived by Czar Peter I — better known as Peter the Great — at the beginning of the 18th century. He demanded a capital to rival any in Europe, though his decision to locate it on 100 swampy islands in the River Neva delta tested the architects and builders to the limit. In the course of construction, millions of logs were driven into the soggy ground to provide a foothold for the city’s foundations. The costs were mostly met by heavy taxation, as every aspect of life was scrutinized by Peter’s taxmen. There was even a tax on beards (though, fortunately for today’s unshaven visitors, it has long since been repealed).
Against the odds — Russian history is almost always played out against the odds — Peter the Great’s grand design was successfully realized. The city’s palaces, canals, cathedrals and broad boulevards became the inspiration for some of the giants of literature and music: Pushkin, Dostoyevsky, Gogol, Tchaikovsky, Rachmaninoff, Prokofiev. Thus, Russia was propelled to the forefront of European culture.
Peter the Great intended his new city to be a “window on the West,” opening up his traditionally insular country to the rest of the world. That goal was confirmed in a recent survey by the Russian rating agency Expert RA, which ranked St. Petersburg as the most favorable Russian city for foreign investment (Moscow was rated ninth). In the past few years, multinationals have increasingly chosen to locate their Russian headquarters in St. Petersburg rather than in Moscow, where social tensions make for a sometimes volatile business environment.
In the first half of 2005, foreign investment in St. Petersburg was $466 million, a rise of 13.4 percent from the corresponding period the previous year. The sectors that benefited most were the food industry, metal production, retail, finance, communications and transporta tion. The United States was the largest single source of investment, accounting for 25.4 percent.
Surprisingly, tourism has experienced a dramatic decline. Visitor numbers in 2005 were down 30 percent, with the trend expected to continue in 2006. A poll of local tour operators attributed it to concerns about security (crime in the city has risen significantly in the past 20 years), poor value for money and a complicated visa process. The visa issue was compounded last September, when Russia’s Federal Migration Service introduced Russian-only migration cards, replacing the old dual-language Russian-and-English cards. The move created chaos at passport control as foreign visitors struggled to fill in cards they couldn’t understand. In addition, all foreign workers are now subject to mandatory testing for leprosy, syphilis and four other diseases when they apply for a work permit.
The impression that Russia is becoming a less inviting market seems to be backed up by recent news that the country had fallen to 75th place in the World Economic Forum’s Growth Competitiveness Index. At the same time, Russia has also slipped down the league tables for protection of property rights (from 88th to 108th), judicial independence (85th to 106th), and “favoritism in decisions of government officials” (84th to 106th).
On the bright side, the nation’s economy grew by 6 percent in 2005, and a raft of new economic measures proposed by the government may help to reverse the slide in competitiveness. Despite the undoubted risks, St. Petersburg is still an attractive investment proposition.
Through all the political and economic upheaval, my personal affection for this city remains undimmed. I love ambling alongside its many canals, catching glimpses of the colorful onion domes of the Cathedral of the Resurrection of Christ and the golden dome of St. Isaac’s Cathedral. I love crossing the bridges of the River Neva when the surface is frozen over in winter, or when it flows languidly under the midnight sun during the “white nights” of summer. And I love exploring the incredible halls of the State Hermitage Museum, housed in the Winter Palace of the Czars. A $150 million renovation is currently under way to bolster the Hermitage’s position as one of the greatest museums in the world.
Besides an enduring love for the city, I carry another legacy from that night all those years ago: I have sworn that when I drink vodka, it should always be by the occasional glass, and not — as is the local custom — by the bottle. A visit to St. Petersburg deserves to be remembered with a clear head.
GRAND HOTEL EUROPE
This famous hotel has had a long and turbulent history, but in recent years it has regained the reputation it earned on first opening in 1875: It is the top place to stay in Russia. In its early years, the Grand was the haunt of such luminaries as Tchaikovsky, legendary ballerina Anna Pavlova and the “mad monk” Rasputin. After the 1917 Revolution, it was renamed the House of the Soviet Workers, and served as a residence for homeless children. It was used as a military hospital during World War II, but subsequently reverted to its original role. After several refurbishments, it has recaptured its former glory, and these days it regularly plays host to world leaders, royalty and international celebrities — some of whom you may meet in the Caviar Bar, where you can order a sampling of five luxury vodkas served with caviar canapés for $28. $$$$
GRAND HOTEL EUROPE
1/7 Ulitsa Mikhailovskaya
tel 7 812 329 6000, fax 7 812 329 6001
The 223-room Astoria, strategically located within easy walking distance of the Hermitage, was completely refurbished in 2002 and is now a genuine rival to the Grand Hotel Europe. The bright and airy rooms combine contemporary design with original antiques, and many overlook St. Isaac’s Cathedral. The ground-floor restaurant, Davidov, serves traditional Russian fare and is one of the most popular eateries in St. Petersburg. The Spa Center has four treatment rooms, a Finnish sauna and a Turkish bath overlooking the Admiralty. Astoria guests may also use the facilities of the Hotel d’Angleterre next door. $$$$
39 Ulitsa Bolshaya Morskaya
tel 7 812 313 5757, fax 7 812 313 5059
Opened in 2003, this 207-room three-star hotel occupies the top three floors of the Vladimirsky Passage shopping mall. The views from most of the rooms aren’t great (standard rooms overlook the interior of the mall; the suites look out on a real street), but the location is great (close to Nevsky Prospekt), the service is efficient and friendly and the rooms are clean and comfortable. Given that most of the city’s three-star hotels are of Soviet vintage, this is a much-needed addition to the city’s visitor facilities. $$$
19 Vladimirsky Prospekt
tel 7 812 331 3200, fax 7 812 331 3201
Located on Palace Square opposite the Winter Palace, this is a great “special occasions” venue. Combining Imperial style with 21st century chic, the restaurant occupies 10 rooms, each of which has its own ambience. The 20-seat Cameo Hall, with elegant furnishings and subdued lighting, is the most romantic. During the warm months, the al fresco summer hall (situated on the square) is ideal for watching the city go by. The menu offers a mix of French and Russian dishes, including specialties such as duck with honey and berry sauce. $$$$
8 Palace Square
tel 7 812 314 4772
On a cold winter evening in St. Petersburg, take a break in the tropics. In its decor, food and music, this cozy restaurant close to the Peter and Paul Fortress brings a slice of Cuba to the shores of the Baltic. So brush up on your Spanish, put on your salsa shoes and soak up an atmosphere that is often thick with cigar smoke. Specialties include mussels Alamar, veal Guantanamera and, for dessert, coconut soufflé. A variety of rum-based cocktails is on offer, including Ernest Hemingway’s favorite, the daiquiri. $$$
19/1 Bolshoi Prospekt
tel 7 812 238 0349
In Soviet-era Russia, shopping was an ordeal rather than a pleasure. You had to queue to select your item, join another queue to pay for, it then join a third queue to collect it. Today, St. Petersburg shoppers have it easy — their city has plenty of modern stores and malls. For souvenirs, one of the less tacky outlets is Onegin (11 Ulitsa Italyanskya, tel 7 812 315 2926, http://www.onegin-art.com), which has a fine selection of matrioshka dolls, lacquer boxes, Faberge eggs and — if you want a memento of the Cold War — Soviet military hats. Don’t buy vodka from street vendors; it can be literally lethal, distilled out of anything from toothpaste to boot polish. Visit a respectable store, where you can get a decent bottle from about $4. The array of quality vodkas available is astonishing and can be confusing, so give yourself a crash course at the Vodka Museum (5 Konnogvardeisky Blvd., http://www.vodkamuseum.ru/english), which also has a good souvenir shop selling all things vodka-related.
For sightseeing, make sure your first stop the State Hermitage Museum (http://www.hermitagemuseum.org). It is the absolute must-see, with more than 3 million exhibits housed within spectacular surroundings. The Jordanian Staircase alone is worth the price of admission. You’ll find entire galleries of work by Picasso, Matisse, Rembrandt and Van Gogh. Admission is $16 for a single visit; multivisit tickets are also available. The State Russian Museum (http://www.rusmuseum.ru/eng), founded by Czar Nicholas II in 1895, is often overlooked in favor of the Hermitage, but it boasts the world’s finest collection of Russian art, including many priceless religious icons. One of the quirkiest public collections is the Museum of Bread (73 Ligovsky Prospekt), which provides a surprisingly interesting look at three centuries of Russian breadmaking. If you have time for a full tour of the city, try to visit the Peter and Paul Fortress, the Cruiser Aurora (the battleship that fired the first shots of the 1917 Revolution), the Admiralty (one of the first structures to be built in St. Petersburg) and St. Isaac’s Cathedral.
Checking In with Maria Chernobrovkina
Executive director of the St. Petersburg chapter of the American Chamber of Commerce in Russia
Global Traveler: What opportunities does St. Petersburg offer American investors?
Maria Chernobrovkina: During the past two years, St. Petersburg has been experiencing an investment boom. There are several reasons for this, including convenient geographical location, skilled labor, developed infrastructure with relatively low prices compared to Moscow, and developed real-estate market offering high-quality office space. The St. Petersburg government has taken a very friendly approach to foreign investors. This approach resulted in new investment legislation, which provides substantial tax incentives to investors. For instance, the city is ready to share the cost of building necessary infrastructure for large investment projects.
GT: What are the potential pitfalls for foreigners doing business in the city?
MC: While the top-level government officials are very friendly toward investors, some inspecting authorities (fire inspection, sanitary inspection, tax authorities, etc.) may cause troubles for the everyday operations of foreign investors.
GT: How has the business climate in the city changed in the past 10 years?
MC: In addition to the overall improved attitude toward investors, there have been very positive changes in the legislative environment. Ten years ago, investment legislation was not developed at all. Legislation was created and tested on those investors who came at that point. Now we are in a stage when the city government encourages business to give its opinion on existing laws and to contribute in creating new laws. The Russian rating agency Expert RA placed St. Petersburg first in Russia in terms of profit versus risk. Low risk is an indicator of a region’s financial stability, and attractive incentives are offered to investors by the St. Petersburg government.
GT: What do you think the key developments will be in the coming years?
MC: If the city keeps its positive dynamics, keeps the investment climate stable and the implementation of laws consistent, I would forecast a growing number of investments in the region.
INFO TO GO
Pulkovo Airport (LED) is located 10 miles south of St. Petersburg. A complimentary shuttle bus service provides transportation between the airport’s domestic and international terminals. Travel time is about 15 minutes. Car rental offices are located in the arrivals terminal, but driving can be tricky as signage is not up to par. Public buses (No. 13) connect the airport to the Moskovskaya subway station. Cab fare in an official taxi from the airport into St. Petersburg runs about $20. Beware of independent cabbies known to charge double the fare for the same journey.
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