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Forbes Magazine
December 10, 2001
The Wild, Wild East
On the rugged frontiers of capitalism the heroes are entrepreneurskis.
By Benjamin Fulford

If you want to see entrepreneurship at its root-and-rock basic, visit the island of Sakhalin in Russia's far east. Thirty miles north of Japan, Sakhalin (pronounced "sakaleen") was once home to Czarist and Stalinist prison camps, tumbledown oilfields, a crumbling military installation and a dying fishing industry. Today, with 1,500 expatriates from around the globe, the island is emerging as a dramatic boomtown--multinational oil companies have pledged $45 billion in investment over the next ten years. But for most locals it's still tough to turn a ruble.

"In Russia one-third of the people work, one-third rob from those who work and another third spend their time chasing after the robbers," laughs Alexandr Dashevsky, 33, who works three jobs to make ends meet. Last year he took in overall revenue of $70,000 as a consultant, an eco-tour operator and an editor of the island's English-language newspaper. From all this he netted $14,000, a fortune in a land where unemployment is 30% and the average monthly income is $100.

Dashevsky is fortunate in another respect. In 1993 he was one of four islanders to receive $600 in seed money from an incubator run by the University of Portland (Ore.) and Loyola Marymount University in California. With the grant came three months of free tuition at the University of Alaska in Anchorage, where he studied business, marketing and accounting. He invested his knowledge and seed money in camping and fishing gear, with the idea of luring tourists to Sakhalin's spectacular natural attractions.

That business failed and Dashevsky was forced to liquidate. Then thugs broke into his house, tied him to a chair and robbed him of all his cash. Once again the Yanks helped out. The Carana Corp., a consultancy that scopes out investment opportunities for the U.S. Department of Commerce, zeroed in on Dashevsky and packed him off for four months to the Nantahala Outdoor Center, an eco-tourism center near Bryson City, N.C. There he learned how to run large-scale, low-cost rafting and fishing trips.

Sakhalin has many attractions: jagged mountains, volcanoes, hot springs and spectacular waterfalls. You can fish for trout and salmon and dive for king crab. Bear season lasts from August to October. If nature isn't your thing, visit the entrance to a 15-mile-long tunnel Stalin built to the mainland at the cost of 20,000 lives. (It ended a few hundred yards short of completion when he died in 1953.) There are visits to settlements of the Nifkhi, the main indigenous group, tours of colonial buildings in the capital, Yuzhno, dating to the Japanese occupation of 1905-45, and plenty of casinos and nightclubs. Outside the bars hundreds of burly, heavily armed men hang around with seemingly little to do. Best to have a car waiting for you when you decide to leave.

Dashevsky's affiliation with the Sakhalin-Alaska Consulting Group brings him work with visiting businessmen. He hooks up oil companies with government officials, helps with paperwork and hiring and locates trustworthy private-sector partners. It's easy for an outsider to get ripped off. Dashevsky recalls the case of Tairiku Boeki, a Japanese trading company that put up $20 million to build the Santa Resort, a four-star, 89-room hotel, with restaurants, shops, gym, sauna and casino, in Yuzhno. Once the complex was up, the Russian partners seized the property. Despite winning every court case, the investor may never get its hands on the property--or its money.

When Dashevsky isn't guiding tourists and business folk, he's managing the Sakhalin Times, a weekly with a circulation of 999. It pulls in $1,000 a month in ads and is profitable. But Dashevsky's first love is still the outdoors. To that end, he is investing $50,000 from American friends in an all-terrain camper truck with eight beds, a satellite phone and a computer. Now that's roughing it.

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