Russia ready for stonger ties with United States

Russia
ready for stonger ties with United States
…………………………………………………………………

BY LIA UNRAU
Rice News Staff

Russian Federation
President Vladimir Putin gave a keynote address at Rice
University Nov. 14, telling his audience that Russia seeks
membership in the World Trade Organization, wishes to forge
stronger relationships with United States businesses and
welcomes increased foreign investment, citing Russia’s
low taxes, a reformed business climate and a growing economy.

The James A.
Baker III Institute for Public Policy of Rice University
hosted the event. Following his visit to Rice, Putin met
with President Bush at his ranch in Crawford, Texas, part
of the leaders’ three-day summit meetings.

James A. Baker
III, former secretary of state and honorary chair of the
Baker Institute for Public Policy, welcomed Putin and the
capacity crowd of 770 at Stude Concert Hall. Introducing
Putin, George H.W. Bush, former president of the United
States, commented on the “strong working and personal
relationship” between Putin and George W. Bush and
said, “I can tell you our president respects your broad
vision of where our two countries can go in the future.”
Also onstage were Rice President Malcolm Gillis and Edward
Djerejian, director of the Baker Institute.

In addition to
Rice students and faculty, audience members included high-level
corporate executives and NASA officials.

In his speech,
Putin pointed to common interests of Russia and the United
States — the energy and space industries.

“The scope
for possible cooperation in the exploitation of Russian
oil and gas could keep us busy for decades,” he said,
speaking through a translator.

“A lot
has been done already to make sure that relations between
Russia and the United States are built, taking into account
each other’s interests,” he said. Forging the
new relationship entails cooperation in several areas, including
science, education and business.

“Today
in Russia we have all the necessary conditions for effective
investments in various fields,” Putin said.

He pointed to
the high rate of economic growth Russia has maintained in
recent years.
He said the country has made a substantial improvement in
the legal conditions for conducting business. The number
of business activities requiring licensing, a practice inherited
from the former plan-based economy, has been reduced from
2,000 to 104.

“Even that
is too high a figure,” Putin said, “but we intend
to continue to liberalize our economy.”

“We have
taken legislative measures to counter the laundering of
illicit profits. We have had an open struggle with the black
market business that has been eroding the economy,”
he said.

“And perhaps
the most important thing,” Putin said, “is that
Russia has reduced the tax burden” — something
that had been discussed for almost 10 years in Russia with
almost no action.

“As of
January 2002, the profit tax rate will go down from 35 to
24 percent, and all types of preferential treatment will
be revoked,” he said. “In other words, we are
strengthening the principle of transparency in our business
activities.” He added that Russia has the lowest personal
income tax rate in Europe — 13 percent.

One of Russia’s
priorities is entering the World Trade Organization, Putin
said. “We deliberately synchronized this process with
our domestic reforms although we are fully aware that this
step is associated not only with benefits, but also with
additional obligations.”

Putin noted
that the United States, in terms of direct investment to
Russia, has fallen behind the Netherlands, Cyprus and Germany.
Pointing especially to Germany as an indicator of Europe’s
interest, Putin said he hopes that Americans will accept
this as a challenge.

“There
are many stable sectors in Russia that are becoming an element
of sustaining the overall security system,” he said,
referring to its energy resources. “Russia continues
to be a reliable and predictable partner as a supplier of
world oil and other natural resources.” He named the
Caspian Sea oil pipeline, which involved U.S. investment,
as a success story.

Yet barriers
still remain in the trade and economic fields, which “should
be removed definitively,” Putin said. In particular,
he mentioned the Jackson-Vanik trade sanctions, imposed
on Russia due to past oppression of ethnic and religious
minorities. “[The sanctions] are just a symbol, no
one knows of what,” he said.

“For our
part, we have already taken steps to overcome the obstacles
of the past,” he said, “and now we expect the
constructive steps to be taken not just by the U.S. administration
but also by the American business community.”

Putin concluded
by saying that in the Russian market, “your risks are
much lower than a couple of years ago. I think this is absolutely
obvious.”

He then added:
“Texas cowboys have the heels of their high boots slanted
inward to make sure that when they work at the ranch they
don’t get stained by mud, and the same applies to international
relations. Cleanliness is a good symbol.”

Putin’s
visit was co-sponsored by the Shell Oil Co. Foundation,
the Russian-American Business Council and the U.S.-Russia
Business Council.