NAME: Derk Ruger AGE: 28


POSITION: Moscow representative for Internationale Nederlanden Bank PREVIOUS JOB: Export Manager in Russia for Peja, a Dutch trading company.


QUOTE: "GNP falls every week. Nevertheless, there is still trade going on".


For Derk Ruger, Moscow representative for Internationale Nederlanden Bank, there is a huge gap between the macro and the micro evaluations of the Russian economy.


On the macro level, Ruger agrees that production may be plummeting and the overall picture may look grim. But that view, he said, obscures the business opportunities that are apparent with a more detailed look at the economy.


"GNP falls every week", Ruger said. "Nevertheless, there is still trade going on".


Industrial production, which the government expects to fall by up to 20 percent this year, could be explained by a huge drop in one large sector - the defense industry, for example - while other sectors plug along and may even be increasing production, he says.


"The mines are quite active", Ruger, 28, offers as an example.


The micro view of the economy explains ING Bank's approach to the Russian market. The Dutch company, Holland's largest financial institution, is taking a specific and cautious approach. The bank, after a merger with a Dutch insurance company, is now one of Europe's leading financial institutions with 50, 000 employees worldwide. The bank operates only a representative office here, making research for its international branches one of its primary jobs. In a limited way, the bank's international offices are involved in financing trade in Russia. It has provided bridge loans for traders importing raw materials who finish


products here and then export them abroad.


But, again reflecting the company's cautious approach, the loans require the importer to put a substantial equity stake in the deal and are very short-term, sometimes only for 30 days. The representative office is involved in supporting those loans made abroad through visits with the local plants and market research.


"We don't provide credits to Russian entities", Ruger said, explaining that the loss provision for such a loan required by the central bank in Holland is too high for the bank and most other international banks. The Dutch central bank requires that a large percentage of a loan's value to a Russian company be put aside as a provision for loss. This diminishes the company's profitability. An emerging aspect of the bank's business here doesn't involve banking at all. The company has been involved in compiling databases of Russian companies for Western investors.


While the databases might be a business in themselves, it is a building block for one of ING's long-term goals for the Russian market.


The bank is a major player in the worldwide business of selling debt internationally. The business can take many forms. Russia, for example, is owed money by several Third World nations. It also owes billions to industrialized nations. The bank acts as a go-between for the various debtors and creditors, arranging swaps at rates and prices commensurate with the risks being taken on.


"It's completely dependent on the price you pay for it", said Ruger, who worked for two and a half years , as export manager for the Dutch trading company Peja.


One possibility might involve the assumption of hard-currency debts owed to state enterprises by the beleaguered Vneshekonombank. Outside investors would buy the debts in return for shares in the companies that are owed money.


But Ruger acknowledges that there are difficulties implementing such swaps here in Russia.


"Russian people are unfamiliar with it", Ruger said. "It sounds a little like selling out the country".