Vancouver Summit initiatives generate business opportunities in Russia - talks between US President Bill Clinton and Russian President Boris Yeltsin in Vancouver, Canada

Business America, May 17, 1993 by Eric T. Bruder

In Vancouver, Canada, on April 3-4, U.S. President Bill Clinton and Russian President Boris Yeltsin declared their firm commitment to a dynamic and effective U.S.-Russian partnership, approving a comprehensive strategy of cooperation to promote Russia's free market reforms. "I believe we have laid the foundation for a new democratic partnership between the United States and Russia," said President Clinton. Clinton expressed his support for expanding bilateral trade and investment by removing obstacles that are blocking current projects, improving the environment for business, and developing a Russian commercial infrastructure.

The presidents agreed on a $1.6 billion package of bilateral economic programs and measures to address Russia's immediate human needs and to contribute to the building of a successful transition to a market economy. Many of the initiatives in the overall assistance program will link U.S. companies with their Russian counterparts to increase overall business between the two countries, transfer skills and technology, and create lasting market relationships. "We are investing today not only in the future of Russia, but in the future of America as well," said President Clinton.

The Vancouver Summit assistance package includes $924.5 million for humanitarian assistance and food sales, $148.4 million for private sector development, $243 million for trade and investment programs, $38 million for the Russian energy and environmental sectors, $6 million for housing and job retraining of Russian military officers, $215 million for the safe and secure dismantlement of Russian nuclear arms, and $48 million for a new Democracy Corps Initiative that will focus on exchange programs, training, and volunteerism.

To respond to the need for humanitarian food and medical assistance and to help develop the proper infrastructure for health care delivery, the United States will provide $224.5 million in new food grants and medical assistance, as well as $700 million in new agricultural credits under the U.S. Department of Agriculture's Food for Progress program. The Food for Progress sales are an interim measure designed to restore Russia's access to U.S. agricultural markets for grains and other necessary commodities.

In order to expand commercial opportunities and support an indigenous private sector in Russia, $148.4 million was announced for Russian private sector development. Private sector assistance will include $50 million to establish a Russian-American Enterprise Fund to create and expand small and medium-size enterprises in Russia. The fund will be able to help U.S. companies by providing financing to their Russian joint-venture partners. This financing may take the form of equity investments, loans, grants, feasibility studies, technical assistance, training, insurance, and other measures.

Private sector assistance also will include a $20 million Russian-American Agribusiness Partnership Program that will pair U.S. agribusinesses with Russian partners to help private farmers and enterprises create a market-driven food system through technical assistance and training. Other aspects of the private sector development package include, but are not limited to, support of enterprise auctions, banking reform, and fiscal sector reform.

Supporting the expansion of bilateral trade and investment between the two countries, the U.S. government announced as part of its assistance package $243 million in trade and investment initiatives. The initiatives include an $82 million Eximbank loan to finance the sale of Caterpillar pipeline construction machinery, a $150 million Overseas Private Investment Corporation package to support CONOCO's $300 million "Polar Lights" project, $1.4 million in Trade and Development Agency grant money for oil and gas feasibility studies, and $2 million in additional funding for the U.S. Department of Commerce's Special American Business Internship Training program.

To assist with the effort of expanding U.S. business in Russia and the other Newly Independent States (NIS), the U.S. Department of Commerce plans to open several American Business Centers (ABCs) in the region. These ABCs will provide U.S. company representatives in the NIS with a broad range of business services, including office space, use of telephone and fax, secretarial services, market information, and business counseling. Cities where Commerce is planning to establish ABCs in FY 1993 include St. Petersburg, Vladivostok, Kiev, Alma-Ata, and Tashkent.

The U.S. government also announced a $6 million Officer Resettlement Initiative to construct 450 houses within a 12- to 16-month period for Russian military officers who are being demobilized and returning to Russia. The initiative also calls for retraining the officers for civilian employment.

To assist in the transformation of the Russian energy economy into a market-oriented, efficient, and environmentally protected system, the United States will provide $38 million in funds for energy and environment initiatives in Russia. The initiative will concentrate on gas, oil, and coal production and delivery systems improvement; energy efficiency and performance improvement; pricing, policy, and institutional reform; nuclear power plant safety and regulation; and other forms of cooperation.