#6
Moscow Times
October 18, 2001
Editorial
No Wonder The Mood Is So Upbeat
Russia appears to be turning into the West's poster child for economic responsibility and business opportunity.
A flood of people have trooped into town in recent weeks for business talks and investment announcements, including U.S. Trade Representative Robert Zoellick, IMF managing director Horst Kšhler, International Finance Corporation head Peter Woicke and, most recently, U.S. Commerce Secretary Donald Evans with 14 American executives.
Kšhler, the first IMF head to visit Moscow since 1999, praised President Vladimir Putin's handling of the economy.
Zoellick and Evans said the United States is eager to promote investment in Russia and to speed up Russia's entry into the WTO.
Frito-Lay announced it would invest $40 million in finishing off a snack plant, and three other deals worth more than $30 million were signed during Evan's visit.
IFC said it is ready to invest $300 million.
Why the flurry of positive attention?
Russia remains one of the most corrupt and bureaucratic countries in the world for businesses, according to a recent report by Transparency International. The organization ranked Russia almost at the bottom of a list of 91 countries in terms of corruption. In the No. 81 spot, Russia fell below Pakistan and barely beat out Tanzania.
But such reports -- which have for much of the past decade given Russia low marks -- seem to be of little consequence to the visiting foreigners. True, Putin has made a top priority of improving the country's investment climate and has sent bundles of legislation to parliament to that end. Putin's year and a half long drive is perhaps paying off, but another explanation may be that Russia is reaping the first rewards of the Kremlin's support for the U.S.-led fight against terrorism. Evans suggested as much Wednesday, saying, "We think this country's reaction [to the Sept. 11 attacks] ... has reinforced what we have witnessed for the last few years" -- that Russia is becoming globally integrated.
It is unclear how many of the recent visits to Moscow were arranged before Sept. 11. The business-to-business team led by Evans to Russia this week was formed back in June.
Still, the mood probably would not have be so upbeat nor the support for Russia so strong if Putin had not firmly thrown his weight behind the terrorism campaign.
We hope the investments and Putin's business-friendly policies serve to mutually reinforce each other and help benefit the country as a whole, rather than enriching a handful of shrewd insiders on both sides of the Atlantic.
Nevertheless, the influx of foreign capital into Russia has been a long time in coming and should bode well for greasing the already spinning wheels of the economy.
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