By Matthew Crabbe
I have chosen an article that didn’t quite make the cover story of the September 1988 issue of Euromoney. Each year the September issue, published for the annual IMF meeting (which in 1988 was held in West Berlin) would set a new record for size. That year it was a whopping 332 pages. So making the cover would have been a big deal. But I am not bitter.
I believe the article I wrote on the opportunities and frustrations of glasnost and perestroika represents some of the strengths of Euromoney. It was a long article packed with detail that should have been valuable to bankers and exporters. It was the right topic at the right time.
The Soviet Union was slowly opening up for business. It had started issuing foreign currency bonds via Vnesheconombank, the progressive state bank for foreign affairs, although France still banned investors from buying the bonds because of pre-revolutionary debts and US banks were under pressure not to participate.
German, Italian and Austrian banks, on the other hand, were doing deals, including large trade finance credits designed to bring consumer goods to Soviet shoppers.
“Perestroika,” I wrote, “might eventually mean 280 million Soviet citizens drinking Pepsi and wearing Benetton.”
But the article was really about the painstaking negotiations that had to go into every deal with the USSR. There was a complicated network of Russian-owned trade banks in Europe, and the Italians, Germans and Austrians were making money working with them. The UK was also lending more to support trade.
However, Soviet trade both within and outside Comecon remained stagnant and the Soviets nonetheless demanded sub-market rates for their debt. There was plenty of opposition to reform inside Russia, of course, not least from bureaucrats working at Gosbank, the coordinating state bank and rival to Vnesheconombank.
My article was based on a lot of interviews with people who were doing different kinds of business with the USSR. And in July 1988 I managed to wangle a place in the press corps following Mikhail Gorbachev on his visit to Poland. Euromoney was not on the Novosti list of approved foreign publications, so we were not allowed to formally visit the Soviet Union. But one of the Euromoney directors had a good connection at the Soviet embassy in London and after a couple of meetings I was added to the list of journalists invited to follow Gorbachev from Warsaw to Szczecin to Krakow.
Gorbachev’s trip was an important gesture by the general secretary of the Soviet Union: an acknowledgment of the popularity of the Solidarity movement and the new relationship he was forging between the USSR and its satellites.
There were no spontaneous crowds to meet him. It was all very symbolic. Possibly he and his advisers might have foreseen that just a year later Solidarity would be strong enough to form a government. However, nobody in 1988 would have bet that in 1990 the Soviet Union would hold its first democratic elections and that within a few years it would be gone.
At the time, the trip was simply an opportunity to meet some of the architects of reform, to try and gauge whether or not business between the Soviet Union and what we used to call “the West” would become easier.
While my article failed to predict how fast things would change, the conclusion was that obstacles to deals could be overcome. The door was there to be pushed.
What else were we getting right and wrong in 1988? Leafing through that big issue of Euromoney, I have fetched from the spare bedroom cupboard, I am struck by how little we wrote about technology and the impact that it was going to have on finance. Or rather, the impact technology was already having: in October 1987 automated trading had been blamed for a stock market crash.
Perhaps we were a little blinkered by our old-fashioned way of doing our journalism. In 1988, I tell my millennial son, we were still writing our articles on typewriters. “But they were modern IBM golf ball typewriters,” I add.
“What on earth is a golf ball typewriter?” he asks.
On the plus side, we did a lot of research for our articles. We had plenty of time to write them; we went wherever we need to go and we spoke to a lot of people. We understood our audience.
In 1989, I left Euromoney. I was hired for the launch of a new newspaper, The Sunday Correspondent, which very few people remember. It lasted only 12 months, partly because of some poor editorial decisions.
One reason Euromoney has made it to 50 is because the need for long-form, detailed reporting has never gone away.