Their Man in Moscow

MTThe Dutch ambassador standing in front of a portrait of Queen Beatrix of the Netherlands by artist Jeroen Henneman.

An Interview with Dutch ambassador Ron Keller.

Russians perceive the Netherlands as a country of flowers, and indeed you export lots of them to Russia — but in return you get lots of oil and gas. Why is that so?

Our geographical location makes us a successful hub for energy, notably gas.

And when it comes to oil, Rotterdam harbor remains a very important outlet for Russian oil products. So it is the harbor and our gas distribution system in northwestern Europe that makes it attractive for Russia to be a partner in energy.

Yet we use Russian oil and gas ourselves only in limited numbers, because we are still a gas producer and just about 10 percent of our gas demand is met by Russia.

But Russia is beginning to invest. LUKoil last year bought a stake in a Dutch refinery.

Obviously, we would like to promote Russian investment. For instance, Rotterdam harbor is further expanding [into the North Sea] and we would welcome more investment from Russia there.

And there are no reservations about Russian investors in the Netherlands?

Oh — there is absolutely no bias in favor or against. We treat every investor equally. It is clear that everybody who works or invests in the Netherlands has to abide by Dutch rules and regulations.

But in the past, there have been fears in some Western European countries that Russian investors snap up strategic sectors of the economy.

I have never ever come across any critical note with regard to Russian investors or prejudice. On the contrary, there is an active policy to attract them.

Your trade sheet with Russia is very unbalanced — the Netherlands export just a fraction of what they import. Can this become more even in the future?

Simply because of the structure of the trade flows, it is inevitable that we will have an imbalance — especially if we promote the use of Rotterdam harbor. That is absolutely nothing we are worried about.

But at the same time, it is clear that we would like to sell more of our products in Russia — not because we have a trade deficit, but simply because 70 percent of our national income is earned with foreign trade and investment. We are very much focused on external markets, and Russia clearly is an emerging market that is relatively close to our economy and in many ways we are complementary. If you look at the trade flow, there is absolutely scope for growth.

It is clear that we would like to sell more of our products in Russia simply because 70 percent of our national income is earned with foreign trade and investment.

Yet that takes efforts from exporters to overcome hurdles and to develop markets. The present Russian economy is only 19 years old — and it is certainly not a saturated market for us yet.

One year ago, a survey among Dutch exporters found that Russia was named the number one most promising export market outside the EU! So our exporters see huge potential, and I think they are right!

What are the most promising sectors for growth in exports to Russia?

I would not exclude any sector. It is true that more than one third of our current exports to Russia are related to agriculture, but also manufacturing equipment and chemicals already have substantial trade flows. I find it impossible to identify one single promising sector — this is something the market will tell over time.

How much of your exports to Russia is made up by flowers?

More than 70 percent of all the flowers for sale in Russia are delivered through the Netherlands, even though not all of them are grown there. We are very strong in distribution and logistics.

The figures also show that we do far more than flowers. Total agriculture exports in 2009 were about $1.6 billion — of which horticultural products were $250 million.

The Netherlands is the world's second largest exporter of agricultural products. This points at a very high productivity, which in turn increasingly attracts the attention of Russian producers. If you put together Russian land, soil and climate and Dutch innovative technology you have a wonderful combination.

Also, the agricultural sector is transitioning from just selling products to co-investing and joint ventures, and we are increasingly seeing technology transfers.

And, over time, the Russian government's modernization drive will also have positive effects on the agricultural sector.

First Deputy Prime Minister [Viktor] Zubkov already said that he would like to attract Dutch agriculture technology.

So you are a fan of the EU's plan for a modernization partnership with Russia?

Obviously, Russia has been modernizing over the last 15 years already in a rapid pace. So modernization is not something that all of a sudden starts after a speech of the president.

But it is good that the president puts a focus on this to start a debate over the next priorities. If Russia wants to play a role in a globalized economy, it has to continue to modernize like any other country.

And it is only logical that the government plays a role and provides a framework.

A leaked Foreign Ministry document in May identified four areas of cooperation with the Netherlands — which of them are realistic? (See box on opposite page.)

Although I never officially or unofficially obtained that document, these elements are real issues.

One of the opportunities mentioned there,  namely  to assist Philips in finding a Russian partner to supply medical equipment, is already underway — at the St. Petersburg Economic Forum in June, Philips and St. Petersburg-based Elektron launched a partnership to produce medical scanners.

But it would be a simplification to think that the Netherlands and Russia only cooperate in these areas.

Is the Dutch-Russian relationship a special relationship?

Four areas of cooperation with the Netherlands according to  a leaked Russian Foreign Ministry document
  • To continue the implementation of key projects (the development of Sakhalin, Nord Stream, the exploration of the resources of the Yamal-Kara Sea).
  • To overcome the economic crisis with a focus on cooperation in the banking and financial spheres.
  • To support Philips, which supplies advanced medical equipment, with the prospect of a joint venture in Russia.
  • To study the Dutch experience of developing hub airports with application to Pulkovo.

Look at the trade and investment flows: The Netherlands are one of the largest trading partners of the Russian Federation — at present, number one in absolute terms and the second-biggest foreign direct investor.

But there is far more: There is a fascinating interest in each other's culture. For instance, President Dmitry Medvedev opened the Amsterdam Hermitage in June 2009, a twinning partner of the St. Petersburg Hermitage.

We have this historical bond since Peter the Great lived and worked and studied in the Netherlands and took with him back to Russia some new ideas ranging from the colors of the flag to the concept of a city of canals on a river delta, which he saw in Amsterdam and he copied in St. Petersburg.

This bond that we have had for so many centuries is alive wherever I go in Russia. Together with Russian and Dutch partners, we develop projects to make our shared history more visible. These include several reconstruction projects, such as an early 18th-century Dutch garden in Yaroslavl, the Summer Garden in St.Petersburg, which was of Dutch origin, the ship with which the Dutchman Willem Barentsz sailed the Arctic Ocean in the 16th century and buildings in Kemerevo designed by a Dutch architect in the constructivist style in 1925.

Peter the Great even ordered all of his subjects to learn Dutch — how many students in Russia are doing this today, and how many students in the Netherlands are learning Russian?

This is something we need to stimulate. There are a few hundred Dutch students that study here and some 500 Russian students in the Netherlands. I hope we can further stimulate our universities and high schools to cooperate and exchange students, curricula and working methods.

We are both part of a globalizing economy, and our students need to be prepared for that.

The Netherlands and Belgium are competitors in their bid for the 2018 World Cup. Who deserves to win?

The FIFA organizing committee has already visited all candidates. They are, for the time being, the only ones who know the chances. Ultimately, of course, it is the football that counts.

Unlike the Netherlands, Russia must build and is already building quite a few stadiums for the tournament. Won't this be an opportunity for Dutch business?

Sure! Dutch companies are already very active in the upcoming championship in Poland and Ukraine 2012. They will provide a range of goods and services, from stadium grass to stadium lights as well as expertise in crowd control.   

Russia - Holland 2010
Russia - Holland 2010
This business bilingual colour publication is devoted to cooperation between Russia and the Netherlands in the fields of business, tourism and culture and is published in partnership with the Dutch embassy.
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