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Vladivostok News
December 4, 2001
U.S. ambassador: local authorities to call the shots in luring investment
By Anatoly Medetsky

On a tour of the Russian Far East, U.S. Ambassador Alexander Vershbow said Monday that whether the new U.S.-Russia partnership translates into the growth of U.S. investment depends a lot on Russian local authorities.

"With progress in economic reforms, there are better conditions for closer economic cooperation," he said in Russia's Pacific port of Vladivostok, where the Unites States has a consulate general.

"Much depends on the local authorities who should give more predictability to foreign businessmen, defend the rule of law and enforce the positive legislation passed by the State Duma in past months," Vershbow told a press conference in Russian.

The State Duma, the lower chamber of the Russian parliament, has recently passed a series of progressive business laws including a much-hailed overhaul of the tax code.

Switching to English, Vershbow elaborated that investors should be confident "that contracts will be enforced, that businessmen will not be subject to pressure from either political or criminal authorities and of course that if they do make profits they'll be able to take them home."

Some ghastly business disputes between Russian and foreign corporate entities impeded building such confidence in the past.

As an example of successful joint business, Vershbow cited the Sakhalin-1 petroleum project off Russia's Far Eastern Sakhalin Island. ExxonMobil, the operator of the international project under a production sharing agreement, committed in October to invest $12 billion over the next few years.

Touching on a sensitive dispute between Russia and Japan over who should own the four southernmost Kuril Islands now held by Russia, the ambassador said, "Now both parties to this dispute are good friends of the United States, so we strongly hope that a negotiated solution can be found."

"But I think that in the immediate term, mutually beneficial economic relations can be developed. The more that there's two-way trade and investment between Russia and Japan the easier it'll be to find a long-term solution."

Russia seized the islands from Japan at the end of World War II and Japan's claims on them prevented the two countries from signing a peace treaty.

On the Dec. 1 to 3 tour that Vershbow said is to promote the new relationship of partners rather than rivals between the United States and Russia, he visited Yuzhno-Sakhalinsk and Vladivostok, capital cities of the Sakhalin and Primorye regions respectively.

U.S.-Russian relations received a boost when Russia displayed willingness to join in the global war against terrorism in the wake of the September 11 attacks on the United States.

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