TITLE: MAIN SPEECHES AT THE FORECAST AND OUTLOOK CONFERENCE
REGARDING RUSSIAN-AMERICAN RELATIONS
[RADISSON SLAVJANSKAYA HOTEL, 9:30, FEBRUARY 14, 2001]
SOURCE: FEDERAL NEWS SERVICE (http://www.fednews.ru/)
REMARKS BY JAMES COLLINS, UNITED STATES AMBASSADOR TO THE
RUSSIAN FEDERATION
Collins: Thank you, Professor Yasin, and I thank all of the
organizers of this conference.
I think it touches a very important element in the US-Russia
relationship which I think really is a complex and comprehensive
and often complicated relationship. But that element is the
economic relations between the United States and the Russian
Federation -- a segment of our relationship which I believe,
despite the efforts of a decade of considerable dedication and
considerable creativity, still remains far from the kind of support
for a stable and normal relationship between our countries that it
should become. And I believe that -- myself and my colleagues here
at the Embassy are persuaded that the economic relationship is
something which must receive priority attention over the coming
several years.
Now, fortunately, I think, in our judgment, conditions exist
today that have not existed for some time that provide reason to
think that the growth and development of the economic relationship,
in a serious and constructive way, is a real and distinct
opportunity. And a critical element is for the private sectors and
our governments to work together to realize its potential. I would
simply point to two reasons for this judgment.
First, the Russian economy has done far better in the last
year or the last year and a half than almost anyone would have
predicted two years ago. It seems to us that a foundation is in
place for solid change to attract investment, to build a normal
business relationship, and to create the conditions for Russians
and Americans together to do constructive, profitable business
between us is beginning to take shape (sic). Nevertheless, it's
going to take a fair amount -- indeed, a lot -- of work on the part
of both of our countries to see that those trends continue. We
cannot take for granted that high oil prices or the particularly
good growth rates of this past year will just continue
automatically, and it's very important, in our judgment, to take
advantage of the opportunities these particular events and these
particular circumstances provide.
The second opportunity which I believe is profoundly important
for Russia's emergence as a major partner for the United States and
for many other countries of the world is Russia's determined effort
to join the World Trade Organization. It's the judgment, in many
ways, of my colleagues and myself that, in the decade of the '90s,
whatever the shortcomings and whatever the successes, there was one
basic achievement, and that is that Russia found the means to
achieve macroeconomic stability. But the next stage really comes
with what may, in fact, be a much harder and longer process: How
do you now integrate and develop the business at the micro-level
that will make the relations between Russia and the rest of its
partners outside a profitable and constructive one that will
benefit all?
We believe the key to that process is going to lie in the
acceptance of the World Trade Organization by Russia and its entry
into that organization, because that should produce the reforms and
the changes that will make Russia increasingly more competitive and
increasingly more attractive. I believe I can say with confidence
that the American government will support Russia's effort to enter
the World Trade Organization, and we are hopeful that that will
become a priority and remain a priority, as it is today, for the
government of President Putin and the Russian Federation.
So I look forward to the conference, and I thank all of you
for taking the time to participate. Thank you very much.
REMARKS BY STATE DUMA DEPUTY CHAIRMAN IRINA KHAKAMADA
Moderator: I would like to give the floor over to State Duma
deputy chairman Irina Khakamada.
Khakamada: I would like to welcome the participants and make
a brief report that will consist of two parts. The first part
analyzes the political situation and current relations between
Russia and the United States of America. The second part is devoted
to the new stage of Russia's economic development and the creation
of a new, more favorable investment environment in the country.
Some time ago Russia and the US announced that they were
building a strategic partnership. I think that the current stage of
our relations may be characterized as some cooling. I think this
may be connected with objective problems which Russia is
experiencing in its partnership with the US.
First of all, there are great disproportions in the
development of our countries. Second, Russia's socio-economic and
political structure does not meet partnership requirements. Third,
there is too much optimism about the success of Russian reform
which has caused a crisis of confidence on the part of the US and
made the Russian political elite feel insulted by American
arrogance.
I do not thing that all these three features are catastrophic,
but they are objective, and the specificity of the present
political elite is that it is reevaluating the current situation.
Despite increased attention to other regions, Russia is one of the
serious external factors for the US just as the US is for Russia.
First of all, this is determined by the role of the US as the
most influential power from the Atlantic to the Pacific. Second, by
US dominance in international financial organizations and the world
economy. Whether or not we like this, we have to solve all
problems, including the problem of foreign debts, by developing
normal cooperation with the US.
Third, it is leadership in the field of science and
technology, especially information technology, and dominance of
mass culture. So, the political elite understands that Russia is
destined to join the global community dominated by the US. This is
why for the first time the problems of globalization of relations
and Russia's place in this world are at last beginning to be
considered in a serious nationwide discussion inside the country.
There is no unanimity in the Russian political elite on what
caused the cooling of Russian-US relations. But if we look at the
State Duma, we may determine three trends there. The first one is
the so-called communist-patriotic. It advocates a theory of
conspiracy and considers the US policy as aimed at weakening and
ruining Russia.
The second one is centrists who favor a strong state. They
believe that the main reason for the deterioration of
Russian-American relations is the weakening of state institutes in
Russia, the inability of the state to effectively manage the
country. Hence America's desire to use this situation and weaken
Russia.
The third trend is liberals. They think that the crisis in
relations is, on the one hand, a result of imperfect and
inconsistent reforms started here in 1992. On the other hand, they
think it is a result of a one-sided policy conducted by
international financial circles where the US has serious influence.
They gave us credits in the beginning without putting forward any
tough conditions requiring us to carry out a civilized economic
policy inside the country.
The taking of office by the new US administration will have a
serious impact on long-term relations with the US. This is why the
advocates of a strong state, as evidenced by Mr. Astakhov's speech,
and liberals consider the election of a Republican president as a
positive result. Why? They think that Democrats advocated a
universal role for America in the world and put the focus on what
they expected from Russia, and this could not but irritate the
political elite in Russia.
The Republicans advocate political realism in international
relations and seek to protect their own national interests. They
put the focus on what is needed for America. From this point of
view, the humanitarian component of Russian-US relations becomes
smaller, and this disappoints democrats and human rights activists
in Russia. However, they become more realistic, orderly and
predictable, which may be good for economic cooperation.
This trend helped create an objective basis for developing a
proper investment climate in Russia. This basis consists of two
elements. First, we have reached political stability, without which
it is not possible to develop investment and economic cooperation.
Whether you like President Putin or not, the appearance of a new
president in Russia and the alignment of forces that exists now,
including relations between the President and the State Duma,
ensure this political stability.
Second, due to purely market reasons, which may not even
depend on the government's activity -- it would be even better if
the government would not do anything at all, and if objective
conditions for economic growth emerged irrespective of the
government -- growing oil prices and import-substituting effect
that lasted some time and provided for good performance, all this
bodes well for determining the rules of the game.
There is a very good potential for Russian-US cooperation. The
US ranks first in terms of accumulated investment in Russia. We
export to the US mainly raw materials, and from this point of view
the US is interested in continuing this cooperation. What Russia
imports from the US is exactly what we would like to export, which
is food products, machine tools, equipment, computers and computer
hardware and software. This, of course, cannot satisfy Russia, and
qualitative changes in export-import relations with the US are
strategically important to it.
However, we understand very well that it is impossible to
change anything without economic reforms. This is why the
government and the parliament are seeking to change the rules of
the game, that is, conditions and laws aimed at creating a
favorable investment climate where there are disagreements between
the parliament and the government and sometimes there is even
disagreement on the part of the President, but on the whole, this
is a concerted behavior of the elite.
So, the first thing is, of course, the land question. We think
that owing to the right liberals' efforts in the parliament and the
support, indirect and very cautious, on the part of the President,
we managed to adopt the first reading of the law enacting chapter
17 of the Civil Code with agricultural land excluded from it. This
is every important because investors, both inside and outside the
country, are not interested in buying land where wheat or rye
grows. They are all interested in a full and normal economic
turnover of urban land, free land and land for construction
regulated by law.
We also agreed in the concept that we will continue to work on
the Land Code, that is, the draft Land Code which has been agreed
by left factions and the President and which in time will be
approved by the right as well. It will exclude agricultural land.
I think that this is a weak code, but still this is a serious
breakthrough for Russia, because the Land Code will create
transparent rules and judicial procedures to be used if these rules
are violated in buying or selling non-agricultural land. Besides,
it makes it possible to start using hypothecary. The regulation of
agricultural land will be ensured by separate laws, from an
improved version of land register and further on.
So, I would not say that -- I do not quite agree with Mr.
Aksakov, but on the other hand, I would not say that absolutely
everything the President wants may be pushed through the State
Duma. The President and the government understand that the country
needs full-fledged private ownership of land. However, this law has
not been passed yet because of the fierce resistance by Communists
and Agrarians.
This is also true of amendments to the Criminal Procedural
Code, very liberal amendments that were submitted to the State Duma
and then withdrawn. Not everything is so simple in this vertical
mechanism of decision implementation. So, the first thing is land.
Second is what Mr. Aksakov has spoken about in detail -- tax
legislation, Tax Code. And I fully agree with him. Here the State
Duma is pursing to a more liberal and firm line and putting a
certain pressure on the government. As a result, a compromise has
appeared on the three disputable issues: exclusion of spending on
advertising, investment benefits for a period of five years and
accelerated amortization.
The question also arises of the profit tax or the income tax.
Preference so far is being given to the profit tax. Also the
problem of when to assess the tax -- at the moment of shipment or
not? But these are rather internal technical problems.
We are advancing here as well and I agree with critics that
government, while declaring a liberal reform, in reality is trying
to be a bit sly and every time one has to be very vigilant, closely
check every letter of the initiatives suggested by government
because behind all this we see so far rather a fiscal policy than
a liberal one.
The next direction is the deregulation and debureaucratization
of the market. This is a whole package which in its time was
announced by the Gref Center. Thanks to pressure put first of all
by the right-wingers in parliament and by entrepreneurs in their
various councils, under the prime minister and the President,
government at long last is beginning to implement this package.
True, this is encountering difficulties even inside the government.
You see, most government structures are against this package
because they want to get additional administrative levers of
influence.
-------------------------------------------
Macdonald Stainsby
Rad-Green List: Radical anti-capitalist environmental discussion.
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