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U.S. & Russian Businessmen Chamber of Commerce 6/17/92 [OA 7576]
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U.S. & Russian Businessmen Chamber of Commerce 6/17/92 [OA 7576]
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6
2
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
June 17, 1992
REMARKS BY THE PRESIDENT
IN ADDRESS TO U.S./RUSSIAN BUSINESS SUMMIT
The J.W. Marriott Hotel
9:12 A.M. EDT
THE PRESIDENT: Thank you all very much. Mr. President.
Thank you, Barbara. Please be seated and let me just say what a joy
it is to be here with Secretary Franklin, who's really taken off and
doing a superb job for us at Commerce. And then, of course, giving
me this opportunity in front of all our business leaders to salute
President Yeltsin.
Yesterday was indeed an historic day, and I was proud to
be at his side as we carved out a whole new approach to arms
reduction; something big, something important, something that's going
to benefit not only present generations, but generations to come.
And so you are most welcome here, sir.
Let me -- before we hear from our special guest,
President Yeltsin, let me just make a few comments on the business
side of things. The U.S./Russian Business Conference is important
work. I will follow up in every way I can with the United States
Congress to get them to pass the freedom support act. Let me very
clear to the American people: We are not supporting the freedom
support act simply because it benefits Russia. It is my view that
the freedom support act will benefit the United States of America;
and will benefit world peace and will benefit democracy and freedom.
So I ask the support of everyone in this room, after
yesterday's historic accomplishments, to join me in working that Hill
up there, Congress, get them to go along and support the freedom
support act. President Yeltsin will be talking about this, I'm sure,
when he makes an historic address to the United States Congress, but
I just wanted everyone here to know how committed we are. And, yes,
it's a tough political time and all of that, but it is in the
interest of the United States of America to pass this act and I need
your help. (Applause.)
Later today we're going to conclude major treaties and
agreements related to this new foundation between us: trade,
bilateral investment and tax treaties, as well as the OPIC and Ex-Im
agreements. And also effective today the United States will properly
extend Most Favored Nation status to Russia. (Applause.)
But my message to this conference is simple: Neither
government programs nor multilateral assistance is going to get this
job done. Neither of those can do it. Private sector participation
in the economies of Russia and the other states, especially
involvement by American business, is critical to the success of
Russia's bold venture into free markets. And that participation must
be on a vast scale, measured in billions of dollars, for the
challenge to be met.
To that end, I'm pleased to announce that OPIC, headed
by Fred Zeder who's so well-known to everybody here, OPIC is going to
have an agreement between the U.S. and Russia and that one enters
into force today. And this agreement's going to permit OPIC to
provide investment insurance to American private investors. And it's
also going to provide additional financing and investor services for
MORE
- 2 -
joint ventures in other products in the federation. With OPIC and
Ex-Im everyone wins. And Russia can tap into the ingenuity of
American business in our capital goods, our know-how and our
technology which are indeed the best in the entire world.
And in my view that help will enable Russia to develop
its food and health sectors, recover its energy resources, privatize
state industries and convert military plants to civilian production.
Now, Boris Yeltsin, President Boris Yeltsin talked to us in great
detail about this yesterday. And I can just assure you from what he
told me then and from what our business-oriented and able Ambassador
Bob Strauss has been telling me all along, he understands this. And
he understands their need for change. And he understands the fact
that they've got to do some streamlining themselves.
But what we want him to know while he's here is that we
are interested in moving forward vigorously with private-sector
participation to help not only Russia, but certainly to help
ourselves. And that's the approach that I'll be taking as we
encourage investment, and as we encourage change in Russia to
accommodate the needs of the business community. American
businesses, by investing in trading with Russia, are going to create
thousands of jobs here at home. And I think that's a point we ought
to keep in mind.
With the OPIC in agreement, now in effect, Fred Zeder is
going to be leading a group of 26 business representatives to Moscow
and other Russian cities on one-on-one business meetings and site
visits to develop private sector deals. And this is just the
beginning of what surely will become one of the largest two-way
trading relationships in the entire world.
In '91, exports of American manufactured goods to Russia
and other states have grown by almost 40. percent. We all know that
the totals are not that large yet; but that's an enormous jump in
just the one year. And, for the first time, Russia is participating
in the community of free market international organizations. You
know what they are -- IMF and the World Bank and, at some point, the
GATT. And this would have been unthinkable just a few years ago.
And we will invite Russia and the other states to join with COCOM
members in this new, informal, cooperative forum to provide
significantly wider access to the high technology goods that
previously were banned, previously denied.
so, as I said, the historic transformation of the
Russian economy is one of the great challenges of our time. The
hundreds of billions of dollars in capital and technologies that
Russia will need will come, in large measure, not from governments
but from private businesses. And as we all know, neither command
economies nor any other government can produce wealth. Wealth is
produced by the initiative and the energy of individual
entrepreneurs.
And, so, let me conclude, but just signal once again the
importance of business investment, business participation. I will do
my level best to make that climate, that business climate good for
investment abroad and to do what we can to facilitate the changes
that are needed here to guarantee the utmost cooperation with the
private sector here, with the cooperation with the private sector
there.
I would be remiss if I didn't tell you of my high regard
for President Yeltsin. He came in with that great show of courage
that just excited every single American, standing on top of that tank
standing up for democracy and freedom, standing against
totalitarianism. (Applause.) The big thing -- I will just stay
standing because he's coming on in a minute -- but the big thing is,
Mr. President, we are going to support you. You've shown the way
towards democracy and- freedom in Russia and it's in the interest of
- 3 -
the United States of America to follow through. And we will. Thank
you, sir. (Applause.)
PRESIDENT YELTSIN: Mr. President, Madam Minister,
ladies and gentlemen. I would like to begin, also, as did Mr. Bush
as of yesterday. Truly, the agreement which yesterday was achieved
between us will alter the psychological climate, not only in the
United States and in Russia, but in the entire world.
Such a global reduction in strategic weaponry to which
we have agreed yesterday would have been unthinkable a year or two
years ago, not to mention earlier. This unprecedented decision in
which we have personally expressed our mutual confidence and Russia
has achieved a democratic development and is striving toward a market
economy, has encouraged us to adopt a decision which I consider is
based on the personal and mutual confidence which we have developed
over the last few months -- let's say five months -- and this has
played one of the chief roles.
I am very gratitude and grateful to Mr. Bush for the
fact that he adopted such a principal position and displayed such
wisdom. We did not attempt to outwit each other; we searched out a
path by which we might be able to reduce strategic weaponry on both
levels to a maximum of levels. And we have agreed upon reduction on
a level of three types.
This will also require its own level investments. This
will also require certain additional working positions, because you
need work and labor and mines to put a rocket together, but you need
the same thing to take it apart. (Applause.) I made that pause
waiting for your applause. (Laughter and applause.)
I am sincerely grateful that I have the opportunity to
meet with representatives of American business. The American
experience is a great example for today's Russian reformers and
entrepreneurs, for young businessmen and for those who are still
studying business, thanks to the system of free entrepreneurial
activity, America has created a powerful economy, has achieved a high
level of living -- standard of living -- for its citizens.
The Russian reforms we link, first of all, with the
development of private business. Perhaps through the IMF we will be
able to receive this credit of $24 billion, but this is only if we
have open gates here. Subsequently, we hope to have a broad-based
business effort, and I am convinced of this. This will not be a
matter of tens of billions of dollars, but hundreds of billions of
dollars.
We highly evaluate, appreciate the assistance rendered
to our country, which we hope will be based on cooperation;
cooperation between Russia and the world community. In January of
'92, Russia began a broad-based economic reform. Our chief task is
to create the institutions of an economic system. This has not been
a simple thing. Just a year ago, each enterprise in our country was
bound by various administrative limitations. Today, most of these
limitations have been totally eliminated.
You might note the fact that 90 percent of the
production which had been produced in Russia is distributed according
to market laws. You might pay attention to that figure. We are
carrying out the ideas in transit to the area of a free
entrepreneurial spirit. These reforms are irreversible; I, as the
President, am convinced of this. And I am not about to retreat or
give up my position up until '96 when all the processes will become
totally irreversible so that Russia might enter upon a civilized
path, a path of market relations, a path of democracy and human
freedom.
MORE
- 4 -
Entrepreneur farmers, the private sector, the
governmental sector, in spite of its limitations have experienced not
only the bitterness of the crisis, but the real advantages of freedom
and the advantages of working for yourself. Russians are getting
back a feeling of value which they lost three generations ago. And
this, unfortunately, has been wiped out of this third generation.
We wish to radically reduce our budgetary deficits. We
want to raise our interest rates. We want to bring our money
missions in accordance, in line with our quantity of goods. The
first stage of the reforms produced some negative effects with regard
to production levels.
We see the threat of dying out for many sectors of the
economy and we have many of our citizens who have a lowered standard
of living. But the reduction of industrial production by 10 percent
this year is such that we have to keep in mind that the military
complex has reduced its production by 20 percent. So this reduction
has been largely at the expense of the military complex. The army
purchased only 60 percent of the production which was put out by our
military enterprises.
If we take into account all these factors of economic
policy, and we can see that there is a problem, a danger of military,
of social unrest, we wish to observe the rules of macroeconomic
policy with regard to specific enterprises and the specific problems
which are facing are the enterprises and we are shifting now into
microeconomics policies.
We have adopted policy on bankruptcy. This is a
mechanism which will permit us to restructure enterprises which by
themselves in a difficult situation. There are tens of thousands of
enterprises which like this which have millions of employees. We
have to observe the same economic mechanisms as in the economic -- in
the private sector. We have to accomplish reorganization of
enterprises, inasmuch as we have -- this deals with 90 percent of our
capacity.
As of the '90s, we have to destroy these unviable
entities. We have to create a healthy basis for a rebirth of the
economy, and I can assure you that this private sector will occupy a
legitimate position in the private sector. We consider it important
to privatize state property. We are somewhat tardy in that regard
because we did not adopt a law on privatization and we did not
confirm within the Supreme Soviet the proper program and now we are
moving forward on privatization.
Today, this first of all has to do with the small
enterprises -- the shops, the stores, the processing sector -- but we
find ourselves on the threshold of large major privatization. In
Washington, when I come back, I will sign a stock entity, a law. We
will begin preparing a system, an intensive -- a system -- preparing
system of vouchers. We will conduct privatization, and we intend to
make this an irreversible process.
One of the basic conditions has been due with our
cooperation with the world community. This must be advantageous to
us, and we see rich opportunities, both for us and for the West.
Russia might become one of the centers for stabilizing the world
order, not only in a political sense, but likewise in an economic
sense, and in a number of different areas. The world economy needs a
great deal of stability.
Our country can become an alternative source of fuel
resources. We have enormous reserves of oil, gas. We have 350
trillion cubic meters of gas, which is enough for 200 years. We just
have to develop these reserves. so we have a good deal of timber,
metals, diamonds, et cetera.
MORE
- 5 -
In this regard, the question arises as to American
investment into technology, into developing our reserves, first of
all with regard to oil, and that should be on a mutual advantageous
basis.
We have passed a law which will provide insurance for
investors in developing our fossil reserves. We are prepared to open
our energy sector to foreign investment. Now we are intensively
preparing for two large projects in developing the reserves in the
Island of Sakhalin. We intend to develop three sites in Siberia and
lower Obsk and Sakhalin and in the Novopolotsk area, which will
provide 2.5 billion tons of oil.
Russia is currently going through a crisis right now.
But we have a sufficient potential to propose cooperation in other
areas. We can supply many types of production for heavy industries
and defense, and we can do this on providing prices which are very
advantageous.
We discussed with Mr. Bush and Mrs. Franklin yesterday
the question: How is it that the cheapest uranium from Russia cannot
be coped with here or accepted by Western businessmen? Because the
law is inferior -- 116 percent customs duties. And I told Mrs.
Franklin we should be afraid of God. You are a believing woman,
after all. How can you charge such high rates? (Laughter and
applause.)
There are considerable opportunities for conversion of
military technologies. Russia possesses -- and note this -- has 110
million hectares of agricultural land. We have a number of proposals
for joint agricultural ventures which might be serviced by a basis of
Western technology. The banks are prepared to provide financing.
And we have a work group which is working in Russia to develop a
reform of the banking system and to create a special American-Russian
investment bank.
We are interested in a dynamic development of
cooperation in this area, utilizing the world-famous achievements of
American agriculture and the rich experience of your farmers. In
Russia we have 1,700 scientific institutes. We have 500 institutions
of higher learning. We have 800 design bureaus and scientific
organizations. Our scientists have achieved a good deal of success
both in the area of applied and fundamental research. And there is a
good deal of opportunity for cooperation with U.S. companies and
other countries.
Today with Mr. Quayle, the Vice President, and I
discussed the possibility for jointly exploring space. We have an
incredible opportunity for utilizing your unique experience in
exploring space, and our likewise unique experience to link these two
efforts and thus to achieve an economy of two times. We don't have
to reinvent the bicycle.
So we're done with these ideological barriers and
worrying who's going to be ahead, who's going to land on the moon
first or make the first landing on the water. No, we are not going
to have this competition anymore. We're going to be working together
in cooperating with each other. (Applause.)
Here we have a broad opportunity to cooperate with
American companies and the companies of other countries. Russia,
having returned to the world economic system, has a developing market
for Western technologies and products. Yes, in this year we are in a
complex situation. But, subsequently, there will be a stabilization
and there will be a revival of the Russian economy and the Russian
reserves and potential, such that you can't even imagine.
MORE
- 6 -
That once they free themselves from this communist
slavery, we will have true freedom. And having such new wealth under
the land, having such intellectual potential, having our skilled
hands when Russia will move forward. So on the whole, having
returned to the world economic system, we believe that Russia will
become an enormous developing market. We hope to accommodate foreign
investment to the tune of hundreds of billions of dollars. We have
scientific potential, natural resources. We have skilled scientists.
We have low wages, measured by world standards.
This is a unique combination of factors which provide
the opportunity to derive enormous profits. Discussing with Mr.
Quayle today, we discussed the cooperation of joint private companies
to explore space, vis-a-vis private companies, not only government
entities.
Russia is actively working on creating a legal mechanism
to defend Western foreign investors in our economy. There is a law
adopted on foreign investment, guaranteeing them from expropriation
the right to repatriate their profits. Appropriately, the situation
could nowhere be more advantageous anywhere than -- more advantageous
than Russia.
We are preparing legislation on property, on foreign
investments, and we're working on our land law. We're preparing a
new reduction of the Russian law. We're moving ahead forwardly on
working at the law on concessions and economic zones. Many foreign
businessmen are holding back, not knowing about the situation with
regard to land ownership. To move forward, the 5th People's Congress
deputies give me the right to issue decrees which might be a
violation of the law, but if the Supreme Soviet doesn't catch that in
seven days, these become law. And so I signed a decree on selling
land for private ownership and privatizing enterprises, and it's to
be sold to foreign investors. And in the course of seven days, the
Supreme Soviet did not catch this, and so this is now law.
(Applause.)
Thus, among the new private owners, we will find persons
who own real estate, even if they're foreigners. Before leaving for
Washington, I sent a document regulating this new situation. We have
developed an agreement on protecting investments so as to escape,
avoid dual taxation. We have already concluded agreements with a
number of countries. We have the first experience on investments in
Russia. This would be done together with the company OPIC.
We have established priorities with regard to the
Russian economy. I have introduced a draft of the law reducing
taxation for foreign investors and reducing taxation by a factor of
two. We want to bring our internal prices on two world levels, first
of all with regard to energy sources and we hope to undertake
subsequent steps to liberalize the foreign trade activities.
We hope to reduce customs duties, reduce quotas and
licensing regulations to free from customs duties the production of
joint enterprises. The government proposes by '94 to reject totally
export duties with regard -- except with the duty on gas -- natural
gas.
We hope to introduce a convertible ruble as soon as
possible. As of the 1st of July we will attempt to achieve a
situation where the ruble will be a universal means of payment on the
Russian territory. We will stop using the foreign currency on the
internal market and the ruble will be the only means of payment.
For enterprises and exporters we will have a 50 percent
resale requirement. As a result, our market will become sufficiently
large and liquid, and this will provide guarantees for investors and
ensure to them that they will be able to convert their rubles into
foreign currency. There will be a unified rate of exchange.
- 7 -
I want to mention here the prospects for investment in
mining. We are now working on the possibility -- foreigners to
participate directly with regard to our sites for producing oil and
natural gas.
I appreciate the pragmatism of Americans. I, myself, am
a pragmatist. I was involved in production earlier. I hope that
businessmen in America will not be late to the table and that they
will be able to tap the enormous potential of our country. Our
country, for the greater part of the 20th Century has pursued a
policy of isolationism. Over decades our ties with other countries
were artificially limited. We have fully appreciated the
hopelessness of such a policy. Today many of the barriers are now
breaking down which formerly seemed impossible to overcome.
And so hope to promote a free commerce between Russia
and America. We have a wealth of ideas, specialists, goods, capital,
and only this path can ensure peace and prosperity for many centuries
to come. I say once more: Do not be late in developing the unique
Russian market over the course of '92-'93. Subsequently, it will be
late -- I thank you. Otherwise, it will be too late.
(Applause.)
END
9:45 A.M. EDT
THE WHITE HOUSE
WASHINGTON
June 15, 1992
MEMORANDUM FOR THE PRESIDENT
THROUGH:
DAVID F. DEMAREST
FROM:
JANICE SHAW CROUSE, Ph. D. Jc
SUBJECT:
PROPOSED REMARKS FOR U.S.-RUSSIA BUSINESS
CONFERENCE
I. SUMMARY
On Wednesday, June 17 at 9:00 a.m., you will deliver remarks
to an audience of 300 businessmen at the U.S.-Russian Business
Conference at the J.W. Marriott in Washington. Approximately
one-third of the audience will be Russian; two-thirds will be
American.
II. DISCUSSION
Your remarks, (approximately 11 minutes / cards), focus on
how private sector partnerships will transform Russia into a free
market economy and create American jobs.
In your remarks, you call on Congress to pass the Freedom
Support Act, and announce the U.S. is extending MFN to Russia.
Please note: the translation will be simultaneous. The
three bracketed graphs on businesses in Russia are being reviewed
by NSC.
Crouse/Bunton
Monday, June 15, 1992
5:49pm [Yelt-bus]
PRESIDENTIAL REMARKS:
ADDRESS TO THE U.S. AND
RUSSIA BUSINESS CONFERENCE
WEDNESDAY, JUNE 17, 1992
President Yeltsin, Secretary Franklin, Ladies and Gentlemen,
it is a pleasure for me to be here for this historic U.S. -Russian
Business Conference. Your talks mark a significant step forward
in our effort to expand bilateral business and trade relations
between our two nations. For Russia this means a giant step
toward full realization of a market economy. For the United
States this means jobs and economic opportunity.
The task of this conference is one of the most important and
exciting challenges of our time. President Yeltsin, I can assure
you that America's goal is to do our part to see that this
challenge is fully met.
For the past four months, the United States government has
been laying a solid foundation for the expansion of our trade and
investment with Russia. Later today, we will conclude major
treaties and agreements related to this new foundation -- the
Trade, Bilaterial Investment and Tax treaties as well as the OPIC
and EXIM agreements. Also effective today, the United States
will extend "Most Favored Nation" status to Russia. Through
these efforts, we are dismantling the trade barriers of the Cold
War, repealing restrictions on export financing, and extending
investment guarantee programs.
I have submitted to Congress the Freedom Support Act which
will clear away barriers to trade from the U.S. side and
2
stimulate combined assistance efforts with other nations. We
will continue to push hard for this critical assistance package
as a key priority. Once again, today I call upon the Congress to
pass this package as quickly as possible. And, I ask each U.S.
participant in this conference to make your voice heard on the
FSA which means so much for the future of trade between the U.S.
and Russia. As our actions clearly indicate, we want to become
Russia's largest and best trading partner and foreign investor -
- a more stable Russia means a more stable world.
My message to this conference is simple -- neither U.S.
government programs nor multilateral assistance will be enough.
Private sector participation in the economies of Russia and the
other states -- especially involvement by American business --
is critical to the success of Russia's bold venture into free
markets. And, that participation must be on a vast scale --
measured in billions of dollars -- for the challenge to be met.
To that end, I am pleased to announce that the OPIC,
Overseas Private Investment Corporation, agreement between the
U.S. and Russia enters into force today. This agreement will
permit OPIC to provide investment insurance to American private
investors. It will also provide additional financing and
investor services for joint ventures and other projects in the
Russian Federation.
With OPIC and EXIM, everyone wins. Russia can tap into the
ingenuity of American business men and women, our capital goods,
know-how and technology -- which are the best in the world. That
3
help will enable Russia to develop its food and health sectors,
recover its energy resources, privatize state industries, and
convert military plants to civilian production. And, American
businesses, by investing and trading with Russia, will create
thousands of jobs here at home in order to produce all the
American goods that a growing economy will demand.
With the OPIC agreement now in effect, I have asked Fred
Zeder OPIC's president, to lead a group of 26 business
representatives to Moscow and other Russian cities for one-on-
one business meetings and site visits to develop private sector
business deals. And, this is just the beginning of what will
surely become one of the largest two-way trading relationships in
In/991
the world. Just in the past year, exports of American
end the sther states
almost
manufactured goods to Russia have grown by 40 percent.
gren
For the first time, Russia is participating in the community
of free market international economic organizations -- the
International Monetary Fund, the World Bank, and, at some
point, GATT. This would have been unthinkable just a few years
ago. And, we will invite Russia and the other states to join
with COCOM members in a new informal Cooperative Forum to provide
significantly wider access to high-technology goods previously
denied.
As I said earlier -- the historic transformation of the
Russian economy is one of the great challenges of our time. It
is important to note that the hundreds of billions of dollars in
capital and technologies that Russia will need over the next
4
decade to help achieve a transformation to a market economy will
come, in large measure, not from governments, but from private
businesses. As we all know, neither command economies nor any
other government can produce wealth -- wealth is produced by the
initiative and energy of individual entrepreneurs.
[[Already, numerous Americans have accepted the challenge
art. Nearin
with businesses large and small. One small U.S. businessman from
Virginia has just opened two Service Star hardware stores in
digt.
Moscow and business is brisk.
of dec. 6590 588
Another company, M.I.C. Industries, has established mobile
/factories to contruct buildings overnight. Their machinery
b/c
it's
103
builds housing and agricultural storage buildings on-site.
not "us"
prototypes 90 regular publication in Jan
and "them"
Just a few months ago, Izvestia and Hearst began printing
Coup.
anymore
John
the first independent Russian-American newspaper, "We.
II
More
Unitach
do sell all of in Sold in Russian
than 350,000 copies -- in both Russian and English -- are sold printed
50,000.00
Mbl (muder)
circulated
467-6931
each week. This enterprise is a true joint venture -- with
Russian and American reporters, editors and business managers
working side-by-side to produce a weekly paper. ]]
President Yeltsin, your wise leadership gives me great hope
for the Russian economy. Your people are world-class in all
areas of human endeavor -- music, the arts, sports, science, and
literature, to name just a few. I am confident that Russia will
now also produce first-class entrepreneurs.
Our government will continue to clear away barriers to trade
from the U.S. side and we will continue to encourage American
firms to invest and trade with Russia.
5
I have asked Secretary of Commerce Barbara Franklin to take
the lead in encouraging bilateral trade and investment as rapidly
as possible. Just yesterday, she and Russian Minister of Foreign
(AH-VEN)
Economic Relations Aven held the first meeting of the new
intergovernmental Business Development Committee -- a group that
includes members of our private business community. This group
has already begun to eliminate obstacles to trade and investment
in order to clear the way for business. Secretary Franklin also
opened a new Business Information Center to advise American
companies regarding opportunities in Russia. And, she will be
leading a Presidential trade mission to get U.S. business on its
way. As a sign of our growing business ties, Secretary Franklin
and Minister Avin yesterday witnessed the signing of several new
American investments that will solidify our position as a leading
investor in Russia.
These creative initiatives signal our whole-hearted
commitment to massive U.S. investment and trade in Russia. We
have faced this unusual challenge with resolve -- to match the
unprecedented opportunity with equally unprecedented action and
boldness.
In turn, we call upon Russia and the other new States to
develop favorable investment conditions for American firms. This
will address
conference has serious problems to address -- delineation of
property rights, sanctity of contracts, clarification of
decision-making authority, consistent tax structures and
policies, currency exchange and other issues. We all want clear
6
understandings about the issues, about which laws apply and about of
recourse procedures for arbitrating decisions. We all want fair
and equitable contracts and tax regimes to be established so the
business can begin.
Let me close by reminding the Russians and Americans here
today -- along with your heavy responsibility, you have a
history-making opportunity. Russia can be fully integrated into
the Western economic system. During your meeting today, I am
confident that ideas will be generated that will lead to billions
They
of dollars of business that will benefit both of our nations by
providing jobs and improving the standard of living for all our
people.
One of America's great humorists, Danny Kaye, once said,
"Life is a great big canvas; throw all the paint on it you can. "
Because of the historic events in Russia, the world today is a
huge canvas. Those of us in this room have the rare privilege
and opportunity to "paint" that canvas. If we devote our
ingenuity, our creativity and our persistence to the effort, we
can pass along to future generations a bright, shining
masterpiece of brotherhood, peace and prosperity around the
world.
May God grant us success in that endeavor. Thank you and
Godspeed to your deliberations.
#######
ACCORDING BJADY ERISTORGA
NO CAB - No MEMBERS OF CONGRESS:
377-3942
1
SUB-
CAB
Fred 2eder Opic Chairman (ambassador)
LVL
John Robson Dep. See Treasury
Senator McCannell (R) steak lunch.
1
Mr William Curran exec. air. from U.S.
European bank for Reconstant
and
Development EPRD
RICK JOHNSON 377-2993 additional als,
No CONG/NO SENATORS!
Conference Sprisors-
pane decression"
3
See.
Commerce - DepSec. Rochy Schnabel
4
John Mc Camber - pres. of EXIM Bank
MAROMBER
5
galaxy of CEO'S
-
50-70 CEOS IN AUDIENCE
5trens
BOAD
DAVID GITUN
CHECKLING ON CABINET
- Becky Anderson
[we d aid not extend inviks to - 2230
Crouse/Bunton
Friday, June 12, 1992
4:47pm [Yelt-bus]
PRESIDENTIAL REMARKS:
ADDRESS TO THE U.S. AND
RUSSIA BUSINESS CONFERENCE
WEDNESDAY, JUNE 17, 1992
President Yeltsin, Secretary Franklin, Ladies and Gentlemen,
it is a pleasure for me to be here for this historic conference.
Your talks mark a significant step forward on behalf of bilateral
business and trade relations between our two nations. Even more
importantly, these talks constitute giant progress for mankind.
The transformation of Russia into a market economy is --
quite literally -- one of the most important and exciting
challenges of our time. President Yeltsin, America's goal is to
do our part to see that this challenge is fully met.
For the past four months, the United States government has
been laying a solid foundation for the transformation that is the
goal of this conference. Today, we put the finishing touches on
major treaties and agreements -- the Trade, BIT and Tax treaties
as well as the OPIC and EXIM agreements. Through these efforts,
we are dismantling the trade barriers of the Cold War, repealing
the restrictions on export financing, and extending investment
guarantee programs.
Also, I have submitted to Congress the Freedom Support Act
which will clear away all barriers to trade from the U.S. side
and stimulate combined efforts with other nations. We will
continue to push for this critical aid. As our actions clearly
indicate, we want to become Russia's largest and best trading
partner and foreign investor.
2
The point of this conference is simple -- neither U.S.
government programs nor multilateral assistance will be enough.
Private sector participation in the economies of Russia and the
other states -- especially involvement by American business --
is critical to the success of your bold venture. And, that
participation must be on a vast scale -- measured in billions of
dollars -- for the challenge to be met.
To that end, I am pleased to announce the beginning of an
important new agreement. The Overseas Private Investment
Corporation agreement between the U.S. and Russia enters into
June 17,1992
Dave Cahn <- force today. This agreement will permit OPIC to provide
Opic
457-7115
investment insurance to American private investors. It will also
provide additional financing and investor services for joint
ventures and other projects in the Russian Federation.
With OPIC, everyone wins. You get to tap into the ingenuity
of American business men and women, our capital goods, know-how
and technology -- which are the best in the world. That help
will enable you to develop your food and health sectors, recover
your energy resources, privatize your state industries, and
convert your military plants to civilian production. And,
American businesses, by investing and trading with you, will
create thousands of jobs here at home in order to produce all the
American goods that your transformed economy will demand.
With the OPIC agreement now in effect, I have asked Fred
Zeder, OPIC's president, to lead a group of 26 business
Dave Cahn
Opic
representatives to Moscow and other Russian cities for one-on one
1990 - 3,087 million
1991 3,577 millin
or 15.9 %
Commerce -PAO
me
3
business meetings and site visits to develop private sector
Just
business deals. And, this is just the beginning of what will Started
(Chict Econsnist)
trolche Russia
David waiters
surely become the most important two-way trading relationship in
92
IN 1991
USTR
the world. Just in the past year, exports of American
and the other states
could CIA
Checking
3583
manufactured goods to Russia have grown by 40%. (acture 37%
grew
almost
For the first time, Russian nations are entering the
(Dept: data of Commerc]
community of international economic organizations -- the
International
International Monetary Fund, the World Bank, and, perhaps not grade admin,
long from now, GATT. These alliances would have been unthinkable Michelle O'Neall
377-3917
just a few years ago. Now, we are inviting Russia and the other
states to join with COCOM members in a new informal Cooperative
Forum to provide significantly wider access to goods previously
denied.
It is important to note that the hundreds of billions of
dollars in capital and technologies that you will need over the
next decade to help achieve a transformation to a market economy
will come, in large measure, not from governments, but from
private businesses. As we all know, neither command economies
nor any other government can produce wealth -- wealth is produced
by the initiative and energy of individual entrepreneurs.
President Yeltsin, I have great hope for the Russian
economy. Your people are world-class in all areas of human
endeavor -- music, the arts, sports, science, and literature, to
name just a few. I am confident that Russia will also produce
first-class entrepreneurs.
4
Our government will continue to clear away all barriers to
trade from the U.S. side and we will continue to encourage
American firms to invest and trade with Russia.
I have asked Secretary of Commerce Barbara Franklin to take
Commerce Hervey
at Commerce
the lead in encouraging bilateral business as rapidly as
37-2112
Fine 16, 1992 Megan, Sec. Franklin's Scheduler 377-5880
J
possible. Just yesterday, she and Russian Minister of Foreign Cheryl
COVE AH-VEN)
Marci
Economic Relations Aven held the first meeting of the
(Crispen
377-5168
intergovernmental Business Development Committee -- a group that
fax
includes members of our private business community. This group
will
Russia
has already begun to eliminate obstacles to trade and investment
accomps
377-
in order to clear the way for business. Secretary Franklin also
3808
opened a new Business Information Center to advise American
(not just Russia mita
companies regarding opportunities in your nations. And, she will
Russia
be leading a Presidential trade mission to get U.S. business on
Megan: nothing schecheted yet Ar trade mission 377-5880
its way in Russia.
These creative, energetic initiatives signal our whole-
hearted commitment to massive U.S. investment and trade. We have
faced this unusual challenge with resolve -- to match the
unprecedented opportunity with equally unprecedented action and
boldness.
We call upon Russia and the other new Commonwealth States to
develop favorable investment conditions for American firms. In
the words of American social philosopher, Michael Novak,
capitalism springs from trust: I quote, "the economic dynamic of
democracy arises from free acts of creativity, within a network
of voluntary cooperation." This conference has serious problems
X
5
to work out -- the sanctity of contracts, decision authority,
consistent tax structures and policies, hard currency charges and
other negotiating issues. We all want clear understandings about
the issues, about which laws apply and about recourse procedures
for arbitrating decisions. We all want fair and equitable
contracts and tax regimes to be established so the business can
begin.
Along with your heavy responsibility, you have a history-
making opportunity. If these deliberations are fruitful, Russia
will be integrated into the world of market economies. During
your meeting today, I am confident that ideas will be generated
that will lead to billions of dollars of business that will
benefit both of our nations by providing jobs and improving the
standard of living for all our people.
One of America's great humorists, Danny Kaye, once said,
"Life is a great big canvas; throw all the paint on it you can."
Because of the historic events in Russia, the world today is a
huge canvas. Those of us in this room have the rare privilege
and opportunity to "paint" that canvas. If we devote our
ingenuity, our creativity and our persistence to the effort, we
can pass along to future generations a bright, shining
masterpiece of brotherhood, peace and prosperity around the
world.
May God grant us success in that endeavor. Thank you and
Godspeed to your deliberations.
#######
06/16/92 14:00
202 377 4054
COMMERCE OBL
001
COPARTMENT of COMMERCE
UNITED STATES DEPARTMENT OF COMMERCE
Office of the Secretary
withing VIATES of APPLICANT
Washington. D.C. 20230
office of Business Liaison
Room 5898-C
14th & constitution Avenue NW
Washington, D.C. 20230
Phone: 202/377-1360
FAX: 202/377-4054
TO:
Jeanne Bunton
FAX #
FROM:
John F. Ostronic
SUBJECT:
Number of Pages (including cover sheet)
REMARKS:
06/16/92
14:00
5202 377 4054
COMMERCE OBL
002
U.S.-Russia Business Summit/Sponsors
William G. Miller
President and staff Director
The American Committee on
U.S.-Russian/Independent States Relations
109 11th Street, SE
Washington, D.C. 20003
Phone: 202/546-1700
Samuel L. Maury
Executive Director
The Business Roundtable
1615 L street, NW, Suite 1350
Washington, D.C. 20036
Phone: 202/872-1260
Jerry J. Jasinowski
President
National Association of Manufacturers
1331 Pennsylvania Avenue, NW, Suite 1500
Washington, D.C. 20004-1703
Phone: 202/637-3000
Jack Faris
President and CEO
National Federation of Independent Business
600 Maryland Avenue, SW, Suite 700
Washington, D.C. 20024
Phone: 202/554-9000
Frank D. Kittredge
President
National Foreign Trade Council
1625 K Street, NW, Suite 1090
Washington, D.C. 20006
Phone: 202/887-0278
William H. Donaldson
Chairman and CEO
The New York Stock Exchange, Inc.
11 wall street, 6th Floor
New York, NY 10005
Phone: 212/656-4100
SENT BY:U.S. DEPT OF COMMERCE : 6- 5-92 : 5:19PM :
DAS FOR EUROPE-202 395 6926
:# 2/ 5
FRom Nich
Business Remark
TALKING POINTS
on the New Independent States
for Incorporation into
the President's Remarks to the U.S.-Russia Business Summit
--
President Yeltsin, Secretary Franklin, ladies and gentlemen:
I want to welcome you to the U.S.-Russia Business Summit, a
very important component of the new relationship between the
United States and Russia. This business summit is
unprecedented, and shows that business and trade are at the
forefront of our bilateral relations.
-
The transformation of Russia and the other former Soviet
republics to market economies and to democratic governments
is the most important challenge of our time. The initiatives
in the Freedom Support Act I submitted to Congress on April
1st spearhead our effort, and we are working closely with
other nations in a combined effort.
-
But neither U.S. government programs nor multilateral
assistance will be enough. Business participation in the
economies of Russia and the other new states -- and
particularly American business participation -- on a vast
scale is the only way to get the job done.
-
The ingenuity and know-how of American business can and will
help transform Russia and the other new states into market
economies. President Yeltsin, I want to tell you that
America's goal is to become Russia's largest and best trading
partner and to become Russia's largest foreign investor.
-
My Administration is taking far-reaching steps to lay the
groundwork for business. We are dismantling the trade
barriers of the cold war. We have repealed restrictions on
export financing. We have extended investment guarantee
programs, are ready to implement a trade agreement, and are
ready to conclude an investment agreement.
-- We are welcoming Russia and the other new states into the
community of international economic organizations. Russia
just entered the International Monetary Fund and we are
looking forward to the day when Russia and the other new
states will become members of GATT.
-- And, in a step we would have found unthinkable even a year
ago, we plan to invite Russia and other states pursuing
reform to join with COCOM members in a new informal COCOM
Cooperation Forum. The forum will provide significantly
wider access by these countries to goods that otherwise would
remain denied.
SENT BY:U.S. DEPT OF COMMERCE : 6- 5-92 : 5:20PM ;
DAS FOR EL'ROPE-202 395 6926
:# 3/ 5
NSC Supportoffice office
-
I have asked Secretary of Commerce Barbara Franklin to take
the lead in my Administration in building trade and
investment with Russia and the other new states and to take
steps in building bilateral business as rapidly as possible.
-
Just yesterday, she and Russian Minister of Foreign Economic
Relations Aven held the first meeting of the
intergovernmental Business Development Committee, to begin
eliminating obstacles to trade and investment and clear the
way for business. She also opened a new Business Information
Center to advise American companies on trade and investment
opportunities in Russia and the other states. She will be
leading a series of trade missions to get U.S. business
moving all over Russia.
Business has already started growing. American manufactured
goods exports to Russia and the other new states have grown
1
by 40 percent in the last year. And this is just the
beginning of what will become one of the most important
two-way trading relationships in the world.
-
This historic business summit, bringing together leading
Russian and American firms to begin doing business, is a key
part of that effort. This afternoon, in the industry sector
meetings, I hope that ideas will be generated that will lead
to billions of dollars of business.
SENT BY:U.S. DEPT OF COMMERCE : 6- 5-92 : 5:20PM :
DAS FOR EUROPE-202 395 6926
:# 4/ 5
WHAT STYMIES CONCLUSION OF NEW DEALS WITH RUSSIA
AND THREATENS EXISTING JOINT VENTURES
Examples from American Business Experience
Will Russia Honor USSR'S Contracts
Connect
-- Russian ministries slow to provide reconfirmation for
operating joint ventures (JV's) in Russia which were
authorized by USSR. Western banks require such
reconfirmation to extend credits needed for operations.
-- Operating JV has rights to work and improve 3 Russian oil
fields. JV approved by USSR Council of Ministers and
registered in USSR. Now local authorities claiming
authority over one of three sites. Lack of certainty
jeopardizes development of this site.
Lack of Contract Sanctity and Legal Recourse
--
Project declared "not expedient" after an American company
transferred its technology in a ten-year licensing
agreement to be repaid over 10 years. U.S. company
received first payment; brought Russian technicians to
U.S., shared its technology; now further payments and
project stopped. No recourse under Russian legal system.
--
Company has $250 million contract to supply steel pipe for
the oil industry; Russians want to pay in oil, but not for
2 or 3 years. What assurance does the company have that
commitment to payment in product will be honored? There is
no legal recourse if its contract isn't honored.
Lack of Clear Decision Authority: Who's in Charge
-- Company negotiating major project; Moscow says great;
regional authority drags its feet; have to get to top
(Yeltsin, Gaidar) to get decisions.
-- Negotiations far along; key minister is fired; start over.
-- American firm's computer, destined for oil exploration
organization, sitting on dock in Germany for 5 months
awaiting decision on release of payment.
Taxes Upon Taxes
-- Single biggest problem. No tax policy. Companies can't plan
because tax rates keep changing, new taxes keep being added
with no notice.
-- 60 percent personal income tax on foreigners: established
JV's about to pull non-Russian personnel out from Russia.
SENT:BY:U.S. DEPT OF COMMERCE : 6- 5-92 : 5:21PM :
DAS FOR EUROPE-202 395 6926
:# 5/ 5
- 2 -
Export taxes of 40 percent and more imposed. Then payment
changed from 60 days after lading to payment before goods
leave Russia. Suddenly without notice new $3.50 per ton
loading fee payable in advance imposed. JV has $9 million
in oil sitting on dock and ship in port waiting for
tax/loading payments to be sorted out.
Hard Currency Charges/Frozen Assets/Uncertainty
Company's arrangement to hire 100 Russian scientists almost
derailed by requirement that Russian organizations turn
over 40 percent of hard currency earnings to government.
Hard currency assets of many companies and their customers
frozen. Companies' operations hampered by inability to
access funds they legitimately earned.
--
Companies are earning rubles; uncertain whether and under
what conditions will be able to convert them when ruble
becomes convertible. Uncertainty inhibits initiatives.
WHAT WOULD HELP
INVESTMENT OMBUDSMAN OR VICE PRESIDENT FOR DEVELOPMENT:
Someone who could resolve who's in charge, what laws apply,
speed up decisions.
ALLOW BINDING INTERNATIONAL ARBITRATION IN RUSSIA:
To provide recourse in case of problems, disputes, damages
until Russia develops a body of commercial law and a court
system for recourse, an international arbitration body
should be allowed to establish branches in Russia and its
decisions should be binding on companies and governments.
GRANDFATHER CONTRACTS AND TAX REGIMES:
Investor confidence and investments would be increased if
contracts and tax regimes under which investments were
established were grandfathered and guaranteed.
Jesnnie
2 stonis/green stones
highlight / added
Crouse/Bunton
for personal Janeh
Monday, June 15, 1992
1:20pm [Yelt-bus]
source attached
PRESIDENTIAL REMARKS:
ADDRESS TO THE U.S. AND
RUSSIA BUSINESS CONFERENCE
WEDNESDAY, JUNE 17, 1992
President Yeltsin, Secretary Franklin, Ladies and Gentlemen,
it is a pleasure for me to be here for this historic conference.
Your talks mark a significant step forward on behalf of bilateral
business and trade relations between our two nations. Even more
importantly, these talks constitute giant progress for mankind.
The transformation of Russia into a market economy is --
quite literally -- one of the most important and exciting
challenges of our time. President Yeltsin, America's goal is to
do our part to see that this challenge is fully met.
For the past four months, the United States government has
been laying a solid foundation for the transformation that is the
goal of this conference. Today, we put the finishing touches on
major treaties and agreements -- the Trade, BIT and Tax treaties
as well as the OPIC and EXIM agreements. Through these efforts,
we are dismantling the trade barriers of the Cold War, repealing
the restrictions on export financing, and extending investment
guarantee programs.
Also, I have submitted to Congress the Freedom Support Act
which will clear away all barriers to trade from the U.S. side
and stimulate combined efforts with other nations. We will
continue to push for this critical aid. As our actions clearly
indicate, we want to become Russia's largest and best trading
partner and foreign investor.
2
The point of this conference is simple -- neither U.S.
government programs nor multilateral assistance will be enough.
Private sector participation in the economies of Russia and the
other states -- especially involvement by American business --
is critical to the success of your bold venture. And, that
participation must be on a vast scale -- measured in billions of
dollars -- for the challenge to be met.
To that end, I am pleased to announce the beginning of an
important new agreement. The Overseas Private Investment
Corporation agreement between the U.S. and Russia enters into
force today. This agreement will permit OPIC to provide
investment insurance to American private investors. It will also
provide additional financing and investor services for joint
ventures and other projects in the Russian Federation.
With OPIC, everyone wins. You get to tap into the ingenuity
of American business men and women, our capital goods, know-how
and technology -- which are the best in the world. That help
will enable you to develop your food and health sectors, recover
your energy resources, privatize your state industries, and
convert your military plants to civilian production. And,
American businesses, by investing and trading with you, will
create thousands of jobs here at home in order to produce all the
American goods that your transformed economy will demand.
With the OPIC agreement now in effect, I have asked Fred
Zeder, OPIC's president, to lead a group of 26 business
representatives to Moscow and other Russian cities for one-on one
3
business meetings and site visits to develop private sector
business deals. And, this is just the beginning of what will
surely become the most important two-way trading relationship in
the world. Just in the past year, exports of American
manufactured goods to Russia have grown by 40%.
For the first time, Russian nations are entering the
community of international economic organizations -- the
International Monetary Fund, the World Bank, and, perhaps not
long from now, GATT. These alliances would have been unthinkable
just a few years ago. Now, we are inviting Russia and the other
states to join with COCOM members in a new informal Cooperative
Forum to provide significantly wider access to goods previously
denied.
It is important to note that the hundreds of billions of
dollars in capital and technologies that you will need over the
next decade to help achieve a transformation to a market economy
will come, in large measure, not from governments, but from
private businesses. As we all know, neither command economies
nor any other government can produce wealth -- wealth is produced
by the initiative and energy of individual entrepreneurs.
Already, numerous Americans have accepted the challenge with
businesses large and small. One small businessman from
Alexandria, Virginia just opened two hardware stores in Moscow.
He is selling items like hammers and workgloves, paid for in
dollars. And, his two Ford trucks have "Service Star Hardware"
imprinted on the sides -- in both English and Russian.
4
On a larger scale, GTE Spacenet has formed a joint venture
with The Russian Federation Ministry of Communications and the
San Francisco/Moscow Teleport to provide digital satellite
telecommunication services -- Switched Access Service. More than
50 multinational firms have signed up -- ABC News, Coca-Cola,
Mitsubishi -- and they receive payment in hard currency.
President Yeltsin, I have great hope for the Russian
economy. Your people are world-class in all areas of human
endeavor -- music, the arts, sports, science, and literature, to
name just a few. I am confident that Russia will also produce
first-class entrepreneurs.
Our government will continue to clear away all barriers to
trade from the U.S. side and we will continue to encourage
American firms to invest and trade with Russia.
I have asked Secretary of Commerce Barbara Franklin to take
the lead in encouraging bilateral business as rapidly as
possible. Just yesterday, she and Russian Minister of Foreign
Economic Relations Aven held the first meeting of the
intergovernmental Business Development Committee -- a group that
includes members of our private business community. This group
has already begun to eliminate obstacles to trade and investment
in order to clear the way for business. Secretary Franklin also
opened a new Business Information Center to advise American
companies regarding opportunities in your nations. And, she will
be leading a Presidential trade mission to get U.S. business on
its way in Russia.
5
These creative, energetic initiatives signal our whole-
hearted commitment to massive U.S. investment and trade. We have
faced this unusual challenge with resolve -- to match the
unprecedented opportunity with equally unprecedented action and
boldness.
We call upon Russia and the other new Commonwealth States to
develop favorable investment conditions for American firms. In
the words of American social philosopher, Michael Novak,
capitalism springs from trust: I quote, "the economic dynamic of
democracy arises from free acts of creativity, within a network
of voluntary cooperation." This conference has serious problems
to work out -- the sanctity of contracts, decision authority,
consistent tax structures and policies, hard currency charges and
other negotiating issues. We all want clear understandings about
the issues, about which laws apply and about recourse procedures
for arbitrating decisions. We all want fair and equitable
contracts and tax regimes to be established so the business can
begin.
Along with your heavy responsibility, you have a history-
making opportunity. If these deliberations are fruitful, Russia
will be integrated into the world of market economies. During
your meeting today, I am confident that ideas will be generated
that will lead to billions of dollars of business that will
benefit both of our nations by providing jobs and improving the
standard of living for all our people.
6
One of America's great humorists, Danny Kaye, once said,
"Life is a great big canvas; throw all the paint on it you can. "
Because of the historic events in Russia, the world today is a
huge canvas. Those of us in this room have the rare privilege
and opportunity to "paint" that canvas. If we devote our
ingenuity, our creativity and our persistence to the effort, we
can pass along to future generations a bright, shining
masterpiece of brotherhood, peace and prosperity around the
world.
May God grant us success in that endeavor. Thank you and
Godspeed to your deliberations.
#######
JUN-15-92 MON 12:24 VA DEPT of ECON DEVEL'T
P.01
VIRGINIA DEPARTMENT OF ECONOMIC DEVELOPMENT
THE CIT BUILDING
2214 ROCK HILL ROAD, SUITE 500
HERNDON, VA 22070
(703) 689-3058
FACSIMILE TRANSMITTAL SHEET
DATE: 6/15/92
FROM: ART NEGRIN
TO: JANICE CROUSE
FAX: (703) 689-3056
FAX: 202-456-6218
COMMENTS:
Some todder for you follows-
AC
Number of pages: 4
(including transmittal sheet).
If there are any problems receiving this transmission, please call
Debbie Eustace on (703) 689-3058. Thank you.
phone call 10:30 6/15/92 Am
Cert Negris / Dept Econ Dece
State of VA
Dorgn VA companies are doing
Conerete things / selling in
703-689-3059
Russia / taken the plunse
FAX
703-689-3056
small Companies
Discrice Atar Deadership
Reute One / alexandrice businessman
2 hardware shores in moscow
hammers / work gloves
paid in dollars
2 Land trucks in Maslow
or
mc Clean Developer
-2 - bldgs in moscow
buing duloped
3
Jeysons Corner - Jennish Company
biolech park in (medical partner technology)
z
4
Environmental Engineer
contracts a/ Russian goit
for environmental - cerdits
for Cleanup-
Walk w/Commerce Dept -
for examples
he basic stew: a mix of privatization,
artnering with western firms to get
announcement last month by the
ities.
And
their
ellular systems up and running, as Bell
Telecommunications Industry Association
equipment market alone could grow to 20
standards that match their own systems.
Atlantic is doing in Czechoslovakia with
and the American Electronics
percent of worldwide sales.
Membership in TEC is open to all
Ameritech, and coordinating
Association, which cut ribbons on a new
"The opening of the TEC office in June
manufacturing firms exporting U.S.
nodernization through state-run phone
office in Prague, Czechoslovakia. That
reflects the increasingly international
products with 51 percent or more U.S.
nonopolies. Finding business involves
office will serve as an eastem outpost for
scope of the telecommunications
value content. Fees range from S500 per
marketing through all three channels. And
the trade association-called the
industry," said TIA President Allen R.
year for companies with $5 million or less
locating capital to finance deals
Telecommunications and Electronics
Frischkom, at a May 21 reception at the
in annual revenues to $12,000 annually
introduces a whole new list of public and
Consortium, or TEC-and its qualifying
Czech Embassy. "Robust market
for the largest companies.
In Russia, Satellite-Based Services Provide a Quick Communications Fix
N
Eastem Europe, like most
little trouble receiving payments
Li
Copenhagen into St. Petersburg.
ministers of communications
0
developing regions, is an ideal
in hard currency.
The venture expects to log a
and to discuss financing, says
Z
candidate for satellite
And for businesses in Moscow
profit by year's end and recoup
GTE Spacenet President C. J.
services, which can provide
and other parts of Russia, just
its investments within five years
Waylan, who is accompanying a
instant communications to areas
being able to call out is a
But to date the emphasis has
July telecommunications trade
N
with little infrastructure. And by
blessing in a country where
been more on stopgap measures
mission to Russia sponsored by
using existing satellite circuits, a
international calls must be
to provide hard currency-carrying
the State Department.
N
few earth stations, and a switch
booked in advance and can take
businessmen with the means to
GTE has already made a small
into the terrestrial system,
hours to go through. In May
call the rest of the world. The
step toward serving Russia's
developing countries can enjoy
alone, firms placed over 20,000
real challenge will be revamping
internal market. On May 7, ITAR-
sophisticated digital services at
direct calls from Moscow hotels
internal systems, rather than
TASS, Russia's government
a fraction of the cost wire-based
and business centers
just creating "overlay networks.
news service, began sending its
services would require.
The system, which is called an
And that task is complicated by
first reports over a data network
For McLean, Va.based GTE
"overlay" network because it
over 70 years of centralization of
provided by Spacenet. The new
E
Spacenet, wiring the former
operates separately from
telecommu nications by the
service will use the private VSAT
communist world into the 21st
Moscow's phone grid. uses a
communist government, which
data network to distribute
century has become one of the
broad mix of technologies to
At $4 a minute, the rates
directs nearly all long distance
dispatches to bureaus inside
firm's hottest growth prospects.
ferry calls out of Moscow and
aren't cheap: But they are half
calls through antiquated
Russia and the other
0
In December of 1991, the firm
into the world's phone networks.
the old charge for international
switching centers in Moscow.
Commonwealth States as well
formed a joint venture with the
Calls originating at hotels and
calls, and the convenience of
Although Russia has a goal of
as to the rest of the world. TASS
Russian Federation Ministry of
business centers make a
direct dial is worth the expense
installing 70 million phones by
will save over $2 million annually
Communications and the San
microwave hop to Ostankino
to multinationals.
the year 2000, it has done little
even while doubling the speed of
Francisco/Moscow Teleport to
tower in Moscow, and from there
Spacenel expects to spend
to guarantee that users will get
text and photo data retrieval.
provide what it calls Switched
signals travel via landline to a
$10 million by the end of this
anything but a busy signal.
And later this year the network
Access Service (SAS). Because
gateway switch, another
year on the system, about half
Next on the agenda will be
will go interactive, allowing
more than 50 multinational firms
microwave link, and on to an
the overall total. And by the end
helping to establish links
bureaus and customers to reach
have signed up so far, including
international earth station, which
of next year, the joint venture;
between the 15 former republics
into the firm's mammoth
E
ABC News, Coca-Cola, and
hands off to an Intelsat satellite
still known as Sovintel, will
of the Soviet Union. "We're
database.
Mitsubishi-the venture has
and the rest of the world.
install a fiberoptic link from
going over there to talk to the
Andrew Jenks
6/4/92
0
N
JUNE 13. 1992
THE TIMES
Business
I
5
VII
N
Bridging the communications gaj
0
N
Business venture rated a big
N
success by U.S., Russian partners
N
their homes.
By Whitney Wyckoff
"We're trying to change all
the old technology to the new
Representatives from the
technology, but Russia is a vast
American and Russian sides of
territory and it's difficult and ex-
Sprint International's joint. ven-
pensive," he said. "We're hoping
ture in electronic communica-
to use this joint venture to speed
E
lions discussed their partnership
up the process."
at a taping of an episode of the to-
CIS citizens are excited
cal talk show "Market Street" al
Warner Cable studios in Reston
about the venture, and eager to
last week.
work quickly to establish part-
0
nerships with other companies,
The joint venture-between
Rubtsov said. Unlike a few years
Sprint and Moscow's Central
Telegraph-was formed in 1990.
Each side owns 50 percent of the
venture, which allows them to
We're hoping to
0
produce products and services
such as data transmission, satel-
use this joint
lite and microwave technology,
venture to
fax services and E-mail.
speed up the
Just as business partnerships
,
Viacheslav Rubtson, center, elaborates on the project between his company and Sprint ]
do, electronic communications
process.
tional. Joining Rublson are Phil Walker (right), vice president of International Affairs a
E
help bring together cultures,
Arkadij Golubkov
ness Development for Sprint, and Arkadij Golubkov, the first deputy minister of the Mil
said Viacheslav Rublson, gener-
Posts and Telecommunications for the Russian Federation.
al director of Central Telegraph.
"Communications make the dis-
to jump start the scen
T
lances shorter and time faster,"
CIS, as well.
he said, through a translator.
"We felt it was im]
Russia has engaged in joint
the transformation o
ventures with international busi-
sian economy to intro
nesses for about five years, said
products and services
Arkadij S. Golubkor, first dep-
re." said Henry Rac
P
uty minister for the ministry of
general director of S
posts and telecommunications of
works. the American
0
the Russian Federation, but
venture.
none of those ventures has
W
And the venture
proved as well developed or ben-
Americans as weil,
eficial to citizens of the former
Sprint an expanded
Soviel Union, or Commonwealth
the benefit of Russi:
of Independent States (CIS), as
munications workers'
"Their capabilitie
ests mesh well with
N
Bach sice owns 50 percent of the
venture, which allows them to
'We're hoping to
Z
produce products and services
such as data transmission, satel-
use this joint
lite and microwave technology,
venture to
N
fax services and E-mail.
speed up the
Staff Photo Smith Bryant
Just as business partnerships
Viacheslar Rubison, center, elaborates on the project between his company and Sprint Interna-
N
de, electronic communications
process.
fional. Joining Rubtson are Phil Walker (right), vice president of International Affairs and Busi-
W
help bring together cultures,
Arkadij Golubkov
ness Development for Sprint, and Arkadij Golubkor, the first deputy minister of the Ministry of
said Viacheslav Rubtson, gener-
Posts and Telecommunications for the Russian Federation.
al director of Central Telegraph.
"Communications make the dis-
to jump start the economy in the
tances shorter and time faster,"
CIS, as well.
he said, through a translator.
"We felt it was important for
Russia has engaged in joint
the transformation of the Rus-
ventures with international busi-
sian economy to introduce more
nesses for about five years, said
products and services over the-
Arkadij S. Golubkov, first dep-
re," said Henry Radzikowsld,
uty minister for the ministry of
general director of Sprint Net-
0
posts and telecommunications of
works, the American side of the
the Russian Federation, but
venture.
none of those ventures has
And the venture has helped
proved as well developed or ben-
Americans as well, by giving
eficial to citizens of the former
Sprint an expanded market and
Soviet Union, or Commonwealth
the benefit of Russian telecom-
of Independent States (CIS), as
munications workers' expertise
the Sprint/Central Telegraph
partnership.
"Their capabilities and inter-
awards ceremony held at the Inte-
tary Manuel Lujan Jr. at an
ests mesh well with ours," said
ored recently by Interior Secre-
"Today when we speak of
Philip Walker, vice president for
telecommunications we speak of
international affairs and business
one huge computer that works 24
development at Sprint Interna-
hours a day, seven days a week
Staff Scott Bryant
tional.
Ladder
and brings services to the people
Warner Cable tapes an episode of "Market Street" featuring a joint telemarketing project between
The influence of joint ven-
that they've never dreamed of,"
Sprint International and Central Telegraph of Moscow.
The Corporate
tures has been so strong, in fac],
he said, through an translator.
that the English words "bus)-
Golubkov added that several
ago, there are now no problems
"The conditions of the coun-
must work to build up our infras-
ness" and "marketing" have now
from the Communist Party or
try are changing, so everyone
tructure."
million people in the CIS still are
slipped into Russian, Rubtsqv
waiting for telephone service to
trade unions either.
must work faster," he said. "We
The joint venture has helped
said.
0
THE WHITE HOUSE
WASHINGTON
Monday, June 15, 1992
MEMORANDUM FOR PRESIDENT GEORGE BUSH
FROM:
JANICE SHAW CROUSE, Ph.D. Janice Crouse
SPEECHWRITER TO THE PRESIDENT
RE:
ATTACHED ARE PROPOSED REMARKS FOR THE U.S.-RUSSIA
BUSINESS CONFERENCE, WEDNESDAY, JUNE 17, 1992.
BACKGROUND
The emphasis in the remarks is that this conference is
working out the details of agreements and treaties that will mean
jobs and economic opportunities for Americans. In your remarks,
you assure President Yeltsin of our goal to assist Russia in full
realization of their goals for a market economy.
THESIS
The main idea of the speech is that American business must
participate on a vast scale -- billions of dollars -- for
Russia's bold venture into free markets to be successful.
ANNOUNCEMENTS
Two announcements are made in the speech: (1) The Overseas
Private Investment Corporation, OPIC, goes into force on the day
of the speech. (2) The U.S. is extending "Most Favored Nation"
status to Russia.
APPEALS
The speech asks for speedy Congressional approval of the
Freedom Support Act and asks the conference participants to let
their voices be heard in support of FSA.
BRACKETED INFORMATION
The three examples of businesses that are thriving in Russia
are being reviewed by the NSC.
THE WHITE house
WASHINGTON
pls. ask David for me
if he's had any luck
with the 40% trade figure
w/ Russia ?
thanks- 1
commerce
manufactured goods
increased 40%
page numbers
Mo ref to OPK
Crouse/Bunton
Wednesday, June 10, 1992
6:06pm [Yelt-bus]
PRESIDENTIAL REMARKS:
ADDRESS TO THE U.S. AND
RUSSIA BUSINESS CONFERENCE
WEDNESDAY, JUNE 17, 1992
It is a pleasure for me to be here for this historic
conference. President Yeltsin, Secretary Franklin, Ladies and
Gentlemen, I am happy to greet you. As outstanding business
representatives from the United States and the New Independent
States, you will be discussing the possibility of expanding trade
and investment opportunities between our countries.
Your talks mark a significant step forward on behalf of
bilateral business and trade relations between our two nations.
Even more importantly, these talks constitute giant progress for
mankind. The transformation of your nations into market
economies and democratic governments is the most important and
exciting challenge of our time.
President Yeltsin, I want to tell you that America's goal is
to do our part to see that this challenge is met. We are working
to become Russia's largest and best trading partner and foreign
investor. On April 1st, I submitted to Congress the Freedom
Support Act which spearheaded our effort and stimulated combined
efforts with other nations. My Administration is also
dismantling the trade barriers of the cold war, repealing the
restrictions on export financing, and extending investment
guarantee programs. We are ready to implement a trade agreement
and conclude an investment agreement.
But, the point of this conference is simple -- neither U.S.
government programs nor multilateral assistance will be enough.
Private sector participation in the economies of Russia and the
other states -- especially involvement by American business --
is critical to the success of your bold venture. And, that
participation must be on a vast scale for the challenge to be
met.
Already, business has been brisk. The ingenuity and know-
how of American business can and will help transform Russia and
the other new states into market economies. Exports of American
manufactured goods to your countries has grown by 40% in the past
year. And, this is just the beginning of what will surely become
the most important two-way trading relationship in the world.
For the first time, you are entering the community of
international economic organizations -- the International
Monetary Fund and, I hope, GATT. These alliances would have been
unthinkable just a short year ago. Now, we are inviting the New
Independent States to join with COCOM members in a new informal
Cooperative Forum to provide significantly wider access to goods
previously denied.
So, the billions of dollars in capital and technologies that
you will need over the next decade will come, in large measure,
not from governments, but from private businesses. Our
government will continue to clear away all barriers to trade from
the U.S. side and we will continue to encourage American firms to
invest and trade in your nations.
I have asked Secretary be of Commerce Y Barbara Franklin to take
the lead in encouraging bilateral business as rapidly as
[
possible. Just yesterday, Secretary Franklin and Russian
Minister of Foreign Economic Relations Aven held the first
meeting of the intergovernmental Business Development Committee.
This group has already begun to eliminate obstacles to trade and
investment in order to clear the way for business. Secretary
Press sec.
Franklin also opened a new Business Information Center to advise
Robinson Marcel
American companies regarding opportunities in your nations. She
377-4883
will be leading a series of trade missions to get U.S. business
on its way in Russia.
These creative, energetic initiatives signal our whole-
hearted commitment to massive U.S. investment. We have faced
this unusual challenge with resolve to match the unprecedented
opportunity with equally unprecedented action and boldness.
We call upon Russia and the other New Independent States to
develop favorable investment conditions for American firms.
There are some thorny problems to be worked out -- contract
sanctity, decision authority, consistent tax structures and
policies, hard currency charges and other negotiating issues.
We all want clear understandings about the issues, about which
laws apply and about recourse procedures for arbitrating
decisions. We all want fair and equitable contracts and tax
regimes to be established.
Along with your heavy responsibility, you have a history-
making opportunity. If these deliberations are fruitful, the New
Independent States will quickly and successfully be integrated
into the Western system of market economies. During these
meetings, I am confident that ideas will be generated that will
lead to billions of dollars of business that will benefit both of
our nations by providing jobs and improved standard of living for
all our people.
SENT BY:Xerox Telecopier 7020 ; 6-11-92 ; 6:04PM ;
OPIC WASH DC->
2024566218:# 1
OFFICE OF THE GENERAL COUNSEL
OVERSEAS PRIVATE INVESTMENT CORPORATION
FACSIMILE TRANSMITTAL COVER SHEET
: 6/11/92
DATE
FACSIMILE NO.
:
456-6218
Jeanne Bunton
TO
:
COMPANY
:
white House
STATE/COUNTRY
:
FROM
:
Dave Cahn
OVERSEAS PRIVATE INVESTMENT CORP.
GC
DEPARTMENT
2
NUMBER OF PAGES
INCLUDING COVER SHEET.
IN THE EVENT OF PROBLEMS IN RECEIVING THIS FACSIMILE TRANS-
MISSION, PLEASE CALL THE FOLLOWING NUMBER IMMEDIATELY:-
(202)
457-7115
COMMENTS: As promised
Hopes you enjoyed Howards anecuates!
Please FAY me a copy of what
you use. Thanks.
Repard
1615 M STREET, N.W. WASHINGTON, D.C. 20527 (202) 457-7200 FAX (202) 872-9305
SENT BY:Xerox Telecopier 7020 ; 6-11-92 ; 6:05PM ;
OPIC WASH DC->
2024566218:# 2
Dave- Cahn
Jum 17, 1992
OPIC INPUT FOR BUSINESS SUMMIT REMARKS
J
I am pleased to announce that the OPIC agreement between the U.S.
and Russia enters into force as of today. This agreement will
permit the Overseas Private Investment Corporation to provide
American private investors with investment insurance, additional
financing, and investor services for joint ventures and other
projects in the Russian Federation.
leaving June21 - 30xa
Now that the agreement is in effect, OPIC's president, Fred
Zeder, at my direction, will lead 26 U.S. business
representatives on an investment mission to Moscow and other
Russian cities beginning this weekend. OPIC is part of our
economic reform rapid deployment team. In addition to meetings
with top Russian officials, OPIC has arranged one-on-one business
meetings and site visits to develop private sector business
deals.
The nice thing about OPIC's projects is that everybody benefits.
At the same time that we are helping Russia's transition to a
market economy and contributing to the success of President
Yeltsin's economic reforms, these investments will create
thousands of American jobs and millions of dollars of American
exports.
We look forward to a mutually-profitable relationship between
Russian and American businesses and to the assistance that OPIC
can bring to the table to help make your deals succeed.
[IF TIME PERMITS, PLEASE INSERT BEFORE LAST PARAGRAPH]
ThE OPIC agreement is an important element of the
Administration's program for economic assistance to Russia, only
with OPIC we are going to mobilize your capital instead of
hitting up the taxpayer. U.S. private investment in Russia will
bring American capital goods, know-how, and technology--which
still are the best in the world--to help develop Russia's food
and health sectors, recover their energy resources, privatize
their state industries, and convert their military plants to
civilian production, all on an environmentally-sound basis.
has nothing to do w/sec. Franklin's traile Mission
- Commera contact:
Weds.
,
377-3942 Fudy
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THE white house
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- Cards
(delyst 30-40)
2080 Am.
many SL
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Thursday June 11, 1992
their and dwg # reformant MAIL Admy at
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infrude
MEMORANDUM FOR R. NICHOLAS BURNS
DIRECTOR, RUSSIAN AND EURASIAN AFFAIRS
IN
WAY
372-A, OEOB
PHONE: 395-6849
FROM:
JANICE SHAW CROUSE, .rid Ph.D. Janise Crosse
SPEECHWRITER TO THE PRESIDENT sugres at.
THROUGH:
DANIEL B. MCGROARTY Novine we vt must
SPECIAL ASSISTANT TO THE PRESIDENT AND
DEPUTY DIRECTOR OF SPEECHWRITING
III writings Insus. your
RE:
DRAFT OF PRESIDENTIAL ADDRESS
just
THE U.S. RUSSIA BUSINESS CONFERENCE
limit
TSA
R37
8 brand
As requested, attached for your review is an early draft of
project
the address for President Bush to give at the United States-
New Independent States Business Conference.
Thank you for your willingness to read an early draft to
make sure we are "on track" with the President's remarks.
milders
We are still working on the speech and refining the remarks.
We would welcome any suggestions or revisions you care to
offer.
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Crouse/Bunton
Thursday, June 11, 1992
1:50pm [Yelt-bus]
PRESIDENTIAL REMARKS:
ADDRESS TO THE U.S. AND
RUSSIA BUSINESS CONFERENCE
WEDNESDAY, JUNE 17, 1992
It is a pleasure for me to be here for this historic
conference. President Yeltsin, Secretary Franklin, Ladies and
Gentlemen, I am happy to greet you and share briefly in this
important conference. As outstanding business representatives
from the United States and the New Independent States, you will
be discussing the possibility of expanding trade and investment
opportunities between our countries.
Your talks mark a significant step forward on behalf of
bilateral business and trade relations between our two nations.
Even more importantly, these talks constitute giant progress for
mankind. The transformation of your nations into market
economies and democratic governments is -- quite literally -- one
of the most important and exciting challenges of our time.
President Yeltsin, I want to tell you that America's goal is
to do our part to see that this challenge is met. We are working
desk Rin
New
to become Russia's largest and best trading partner and foreign
3rd
fin
investor. On April 1st, I submitted to Congress the Freedom
Support Act which spearheaded our effort and stimulated combined
efforts with other nations. My Administration is also
dismantling the trade barriers of the cold war, repealing the
restrictions on export financing, and extending investment
guarantee programs. And, we are ready to implement a trade
agreement and conclude an investment agreement.
2
But, the point of this conference is simple -- neither U.S.
government programs nor multilateral assistance will be enough.
Private sector participation in the economies of Russia and the
other states -- especially involvement by American business --
is critical to the success of your bold venture. And, that
participation must be on a vast scale for the challenge to be
met.
[Hold for paragraph about OPIC -- creation of jobs and
exports, role and mission]
Already, business has been brisk. [humor? -- anecdote about
humorous miscommunication???]
The ingenuity and know-how of American business can and will
help transform Russia and the other new states into market
economies. Exports of American manufactured goods to Russia have
grown by 40% in the past year. [other facts?] And, this is just
the beginning of what will surely become the most important two-
way trading relationship in the world.
For the first time, your nations are entering the community
of international economic organizations -- the International
Monetary Fund and, I hope, GATT. These alliances would have been
unthinkable just a short year ago. Now, we are inviting the New
Independent States to join with COCOM members in a new informal
Cooperative Forum to provide significantly wider access to goods
previously denied.
Peter algire
Mathew wart free trade agreement- 3211
3
So, the billions of dollars in capital and technologies that
you will need over the next decade will come, in large measure,
not from governments, but from private businesses.
Our government will continue to clear away all barriers to
trade from the U.S. side and we will continue to encourage
American firms to invest and trade in your nations.
I have asked Secretary of Commerce Barbara Franklin to take
the lead in encouraging bilateral business as rapidly as
possible.
*/
June 16, 1992 Megan in Scheduling 377-5880
Just yesterday, Secretary Franklin and Russian
Minister of Foreign Economic Relations Aven held the first
meeting of the intergovernmental Business Development Committee.
Bill Hervey 2112
This group has already begun to eliminate obstacles to trade
&
377- 0750
and investment in order to clear the way for business. Secretary
Franklin also opened a new Business Information Center to advise
American companies regarding opportunities in your nations. She
will be leading a series of trade missions to get U.S. business
on its way in Russia.
nothing schelduled yet - Megan 377-5880
for trade mission
These creative, energetic initiatives signal our whole-
hearted commitment to massive U.S. investment. We have faced
this unusual challenge with resolve to match the unprecedented
opportunity with equally unprecedented action and boldness.
We call upon Russia and the other New Commonwealth States to
develop favorable investment conditions for American firms.
There are some thorny problems to be worked out -- contract
sanctity, decision authority, consistent tax structures and
policies, hard currency charges and other negotiating issues.
4
We all want clear understandings about the issues, about
which laws apply and about recourse procedures for arbitrating
decisions We all want fair and equitable contracts and tax
regimes to be established.
Along with your heavy responsibility you have a history-
making opportunity If these deliberations are fruitful, the New
Independent States will quickly and successfully be integrated
into the Western system of market economies. During these
meetings, I am confident that ideas will be generated that will
lead to billions of dollars of business that will benefit both of
our nations by providing jobs and improved standard of living for
all our people.
One of America's great humorists, Danny Kaye, once said,
"Life is a great big canvas; throw all the paint on it you can."
Because of the historic events in your country, the world today
is a huge canvas. Those of us in this room have the rare
privilege and opportunity to "paint" that canvas. If we devote
our ingenuity, our creativity and our persistence to the effort,
we can pass along to future generations a bright, shining
masterpiece of brotherhood, peace and prosperity around the
world.
May God grant us success in that endeavor. Thank you and
Godspeed to your deliberations.
#######