USA to import 50 million tons of crude from Russia a year

President Putin had a meeting with top US entrepreneurs in St.Petersburg

Russian President Vladimir Putin met with leading US businessmen last Saturday in Konstantin Palace in Saint Petersburg. The meeting focused on promoting foreign investment in the Russian economy and removal of legal obstacles which still impede effective economic cooperation between Russia and the United States. The total capitalized value of US businessmen's companies looks really huge, in the neighborhood of $3 trillion. The businessmen in charge of those companies are keen to develop business in Russia.

The introductory remarks by the Russian president lasted about forty minutes. The Russian president decided to personally tell the investors about the state of Russian economy. Mr. Putin dwelt at length about the economic situation in Russia. He cited data in numbers and percent while paying close attention to translation.

“We have achieved a sustainable economic growth rate, it has been about 7 percent a year over the last 5 years,” said Mr. Putin. A female interpreter made a mistake at that point by saying in English that annual economic growth rate was about 5 percent. The Russian president promptly corrected the interpreter. “The growth rate was about 7 percent per year,” said he.

According to him, Russia's economic growth rate has reached 5.4 percent during five months of 2005. “In any case, it is a higher rate than the world's economy average growth rate,” said he. The Russian president said that stability was the main advantage of the Russian economy while high inflation rate (more than 7 percent) remained its main problem. The Russian government is tackling the issue of inflation these days. “I hope the government will be able to fulfil their objectives,” said the president.

Russian Minister for Industry, Viktor Khristenko, and Russian Minister for Economic Development and Trade began putting something down following the president's comments. President Putin soon reminded that both the ministers were part of a commission set up by him and US President George W. Bush. The ministers are drawing up proposals on Russia-US cooperation in the energy sector. Cooperation would be to advantage of both parties due to continuous upward trend in the world oil prices. “As a result, the US could import 50 million tons of Russian crude per year without additional investment,” said Mr. Putin.

James Malva, CEO of ConocoPhillips, already purchased a 12 percent stake in LUKoil,  Russia's biggest oil producer, and he would like to buy another 8 percent stake in the above company. The American businessmen nodded their heads in approval as President Putin was talking about steps to create a better investment climate in Russia. Mr. Putin also reminded of some impediments in US legislation which still set back bilateral economic cooperation. He spoke of the notorious Jackson-Vanik amendment.

The amendment passed US Congress some thirty years ago in response to restrictions imposed by the USSR on emigration of Jews to Israel. President Putin pointed out that the issue of Soviet Jewish emigration had become history a long time ago. However, these days some US politicians are trying to apply the amendment to any issue of US-Russia relations e.g. agricultural cooperation, quotas on US poultry exports to Russia and so on. Even former Soviet Jewish activists who fought for the Soviet system liberalization and their rights to free emigration to Israel are now showing their indignation over the continuing practice. “It is not for chicken we did our time back then,” said one of the activists.

“We can appreciate that various issues may arise in the course of economic cooperation, parties involved should find ways for resolving such issues, no issue should reach the point of absurdity,” said President Putin.

Russia is the only country where restrictions on the so-called fast computers still apply. It is highly unlikely that IBM could be interested in the status quo, said Mr. Putin and took a look at IBM CEO Samuel J. Palmisano. It would be hard to disagree with Mr. Putin's comment since Russia is now the most upcoming market for IBM. The meeting between the Russian president and the US businessmen lasted more than three hours. At the end of the meeting President Putin suggested that Russian businessmen pay a visit to the USA and meet with US President Bush. “Hope that the idea will meet with a favorable response,” said Mr. Putin.

The American billionaires looked quite pleased as they emerged from the meeting room. They said they felt more secure since they ascertained the rules of the game applicable to the Russian market.

“First and foremost, investors should know the rules of the game, they should know what to expect from the tax authorities or the judiciary in Russia,” said Citigroup chairman Sanford Weill. According to him, clearer rules will make investor feel more confident, and the amount of direct investment will begin to increase. In fact, Citigroup was behind the meeting with President Putin. The Russian journalists asked Mr. Weill whether the situation about Yukos oil company had been discussed at the meeting. Citigroup chairman said that the Yukos issue had not been discussed at the meeting.

The meeting was equally useful to the Russian ministers. “The Russian government is creating conditions so that Russian and foreign investors alike can work in stable conditions and create jobs,” said German Gref, Russian Minister for Economic Development and Trade.

President Putin also met with the man who knows almost everything about business. The man is called James Wolfenson, he used to be the president of the World Bank. Now he is a special representative of the “Quartet” of mediators for a Middle East peace settlement. The “Quartet” comprises Russia, USA, EU, and UN. Mr. Wolfenson was particularly keen to know the opinion of Vladimir Putin since Russia will take the chair of the G-8 next year.

It is possible that the meeting between Russian president and leading US businessmen will create new opportunities for Russia-US economic cooperation.

Vera Mironova