Establishing Private Business and Reform of Soviet Industry

The enormity of the transition from the Soviet planned economy to a Russian market economy is impossible to understand without some basic outline. In the Soviet Union, private enterprise was illegal. Money functioned as an input allocated by planning agencies so banks and whatever financial institutions existed had an entirely different purpose than in a market economy. There was no private ownership of land, including apartments and buildings. Media, movies, restaurants, retail stores, telecom and other service-based enterprises were all state-owned with business practices determined by planning agencies, not by customer or consumer demand. The Soviet planning system had its own accounting systems, legal structure, operating procedures, distribution networks, and industry-specific scientific and training institutions, all of which were completely separate and conceptually distinct from Western market-based analogs. Integration into the global market economy required huge changes in these entrenched systems.

In this context, the entrepreneurial impact of Americans was quite dramatic during the Yeltsin period. This influence was particularly important in new private sectors that either did not exist in Soviet times, like finance and real estate or operated very differently under Soviet state control, like restaurants, hotels, entertainment, media and telecommunications. 
The influence of multinational corporations and individual entrepreneurs was a critical driver of the growth of many of these new businesses, with their influence on the everyday lives of Russian citizens. The structural changes in the Russian economy that took place then remaining important in the modern-day Russian economy but russified and run by Russians.
This transition was facilitated by the large number of international law firms, consulting firms, accountancies, and foreign banks that also established their presence in Russia and played a significant role in creating the market economy. 

Topics in this section are financial institutions, including United Financial Group, Troika Dialog, Delta Private Equity, [Baring Vostok], [Morgan Stanley], Dialog Bank, Alpha Bank, Citibank, Fidelity Investments, Russian Trading System; real estate, Noble Gibbons, Perestroika Joint Venture; media/entertainment, including Internews, CTC TV, Radio Maximum, Moscow News, Cosmopolitan (Russian edition), Kino Mir, Kino Star de Lux, and Rose Creative; restaurants including TrenMos, Starlight Diner, Uncle Gilley’s Steak House, Rostic, Patio Pizza, Planet Sushi, and American Bar and Grill; telecommunications including SovAm Teleport, Sovintel, Baltic Communications, and US West; international law firms including Latham Watkins, LeBoeuf Lamb, and Chadbourne & Park; and consultants, including Ernst & Young and Deloitte.