From Russia with love and back with know-how: Nick Holdsworth finds out what UK firms can gain from teaching business to the old Soviet Union

ELENA Teleguina is confident that when she returns to Moscow in November after a stint with British Gas she will have something the Russian economy is crying out for: hard-nosed Western business experience.

Ms Teleguina is one of a new breed appearing throughout the countries of the former Soviet empire. Young, ambitious and well-educated, she is making her way in business at a pace which might astonish many in the West.

The financial director with Gas Intech Service - an engineering consultancy to the gas industry in Russia set up three years ago - her clients include Gasprom, the newly privatised monopoly supplier, which controls the world's largest natural gas reserves.

She is in London as part of an innovative scheme to assist the former Soviet Union in its transition to a free market economy by providing practical experience in the shape of work attachments to young high flyers.

The Chancellor's Financial Sector Scheme was set up two years ago in response to a request from Boris Yeltsin, the Russian president. So far, more than 160 young business people from Russia, the Ukraine and Lithuania have been involved in the day-to-day work of scores of firms - National Westminster Bank, Swiss Bank, Equitable Life, Ernst & Young, N M Rothschild, Royal Insurance, Abbey National, John Mowlem and dozens of others.

Three firms have opened offices in Moscow run by their secondees, and many report new business opportunities which would not have been possible without the access to often complex local markets offered through participation in the scheme.

The initiative has been such a success that its administrators at the British Council are launching a new recruitment drive on Wednesday with a dinner in the City hosted by the Chancellor Kenneth Clarke, and plan to expand into Scotland.

John Hanson, director-general of the British Council, believes the scheme, financed through the Know-How Fund, is one of the most cost-effective ways of making a positive contribution to the former Soviet Union. 'The British Council's worldwide network is ideally suited to servicing schemes such as this,' he says.

Applicants for the scheme, which provides work attachments of three to 10 months' duration, are chosen through a vigorous selection procedure managed by staff in the council's Moscow office.

Fewer than one in five applicants are successful. Each must be experienced in financial services, have the support of an employer or relevant sponsor, and have clear reasons for entering the scheme. Their English must also be flawless - a tall order for a part of the world that only recently opened up enough to provide opportunities for practice with native speakers.

But for the few who make it, you gain the impression that such obstacles are always taken in their stride.

Ms Teleguina, who is on attachment with the financial department of British Gas, exudes a quiet confidence while displaying a sound comprehension of project finance.

With a PhD in economics and international finance, all she lacks is practical experience of a global market that her home industry is just beginning to enter.

'I knew that we needed to gain Western experience in the open market economy, which we lack, particularly in the gas supply field and project finance,' she says.

'British Gas has the kind of experience we need because it was a state company until recently. Gas supply in Russia is a monopoly business and we need to understand how to do business on the open market.'

Andrei Liackhov, a Lithuanian lawyer, has already made his presence felt in the London headquarters of Norton Rose, an international corporate law firm with seven overseas offices, including one in Moscow where two of the staff are former Russian secondees.

Mr Liackhov, the head of an independent legal practice and consultant to the Lithuanian securities commission, is assisting Norton Rose's work where it touches on Eastern Europe.

His grandmother was Scottish and he speaks a rapid, vernacular English which conveys confidence, authority and enthusiasm. Partners at the firm sum up his style as 'entrepreneurial' and are confident the relationship will develop to mutual advantage.

Mr Liackhov's assessment of the legal world in Lithuania is succinct: 'If an independent private practice is to survive, you have to be imaginative. People understand when your product is a table. But when it is a service, there is an old prejudice which says you don't have to pay for advice and brains don't cost anything. Sometimes when I quote my price, a client says 'thank you' and disappears.'

With Lithuania's new legal framework still in its infancy, Mr Liackhov sees good opportunities for British legal firms to work with well-trained, home-grown firms in potentially lucrative markets. And with most of the legal work for the few Western companies in the country being done by an American firm, there is an additional spur to some competitive development.

For British firms, the costs of involvement in the scheme are few, the benefits many. Not only can companies enjoy helping young professionals forge ahead in a time of great change for the former Soviet Union, but they can better the chances of stronger new economies sticking to democracy, rather than slipping into demagoguery.

Robin Brooks, of Norton Rose, says: 'To achieve real reform, it is the Russians themselves who must do it. In taking on people under the Chancellor's scheme, we are boosting the numbers of people with an understanding of Western business techniques and of the local situation. They are the ones best suited to understanding what advice to take from the West and how to adapt it to their own conditions.'

For further information on the scheme, telephone 071-321 0640.

(Photograph omitted)