Timber, Hotels Beckon U.S. Investors

A delegation of powerful Russian lobbyists will urge U.S. investors next week to invest in timber and the construction of cottages and small hotels in exchange for assistance in entering the Russian market.

The U.S. side, in turn, would like to see the Russian government reduce protectionist measures and streamline the process for obtaining business visas.

The Russians will make their pitch during three days of talks, starting Monday, with Michael McFaul, President Barack Obama’s adviser on Russia, and members of Congress in Washington. The delegation, representing the Russian Union of Industrialists and Entrepreneurs, Delovaya Rossia and the Russian-American Business Council, will also meet with officials from the American Chamber of Commerce.

The trip comes amid a new push by Obama and President Dmitry Medvedev to strengthen investment ties following a Moscow summit in July.

After the summit, the Russian Union of Industrialists and Entrepreneurs, or RSPP, took a poll of several dozen Russian companies on what fields they saw as having the most potential for cooperation. The suggestions will be voiced at the talks next week.

Andrei Kuznetsov, who will represent the Russian Union of Industrialists and Entrepreneurs at next week’s meetings, provided a preview of the results in an interview, saying U.S. investment was most sorely needed in developing Russian infrastructure.

“We have decided that we want to cooperate on big strategic projects in key sectors such as infrastructure on each other’s territories,” Kuznetsov said.

Kuznetsov said Russia could learn from the American experience in timber and small-scale construction projects.

“Designing factories that produce construction materials and garbage-processing plants is what Russians would be glad to see the Americans involved in,” he said, speaking Wednesday in his office on Staraya Ploshchad, just next to the building of the presidential administration.

He also said Russia needed American expertise and technology in deep-processing timber factories and reforestation.

Kuznetsov said U.S. investment was “especially welcome” in the construction of small power-generating stations in cities and villages and the building of small hotels, cottages and stadiums across the country.

“American businesses have good experience in building things that are small but efficient,” he said.

In return, “we are ready to help their companies enter the Russian market,” he said.

He said RSPP and its business members were ready to help U.S. investors find Russian partners and develop projects.

Andrew Somers, president of the American Chamber of Commerce in Russia who will attend next week’s meetings, said the talks would be a good chance to set priorities.

“We have to decide between ourselves what is most important and then approach our governments,” he said. “You can’t come to them with too many issues.”

He said reducing protectionism in the Russian agriculture and transportation sectors were major issues.

“Business visas and work permits are a most important issue for us as well,” he said. “It has improved, but there are still delays. People don’t get their visas on time.”

RSPP head Alexander Shokhin said at the July summit that Russia should scrap visa rules for U.S. citizens in exchange for the United States lifting Jackson-Vanik, a Cold War-era trade restriction.

Kuznetsov said both the Russian and U.S. government should ease visa rules for scientists and managers.

“We would like a reciprocally facilitated visa regime to be introduced for scientists and engineers,” he said. “We also want to introduce education programs to train Russian managers working in innovative fields such as bio and nanotechnologies, aviation and space.”

He said Russia needed U.S. investment to implement cutting-edge technology in the pharmaceutical industry. “We would like to create joint ventures to produce drugs in Russia using American know-how,” he said.

Returning to infrastructure, Kuznetsov said he hoped U.S. investors would bid for projects. “It would be great if American companies could take part in tenders to construct railroads, sea ports and other infrastructure projects on equal terms with Russian companies,” Kuznetsov said.

Russian businesses, whose business interests in the United States range from steel mills to real estate, would like to participate in U.S. tenders as well, he said.

“We want to form partnerships with American businesses to work on common projects in the United States and in third countries,” he added.

He said he was looking forward to his trip to Washington and credited Obama for making it possible. “There never was any regular dialogue between the countries’ business communities before Obama took office,” he said.