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. Last Updated: 07/27/2016

Gaidar tells Americans he's on their side

Prime Minister Yegor Gaidar, in a clear effort to reassure foreign investors, said Monday that he expected the Russian parliament to accept his government's proposal to lower the income tax rate to 30 percent.

Gaidar made his remarks in a speech to American businessmen, who have been reluctant investors in Russia in the first months of reform. Despite the upbeat mood in Russian-American relations following last week's summit, Americans are still concerned about the risks of investing here, given the unstable political and economic climate.

The U. S. ambassador, Robert Strauss, who introduced Gaidar, sympathized with the plight of the Russian government chief, who is attempting to revolutionize his country's economics after 70 years of Communism.

"I think he has probably the most difficult task of anyone that I have met in my entire private and public career", Strauss said.

Gaidar shared some of that caution while seeking to assure his audience - which included representatives of 50 enterprises from Texaco to Chemical Bank - that his government is on track with reform. "We are very far away from the perfect legal infrastructure for the foreign businessman", Gaidar said. "But this government is going to work hard to create the conditions necessary to make the investment in the Russian economy profitable and competitive".

Gaidar acknowledged that while the Soviet centralized economic system had been destroyed, the hallmarks of a market economy - private property, a reliable banking system and a stable currency - were not yet in place. It is in helping to implement these institutions that Western help is most needed, he said.

Gaidar's assurances were met enthusiastically by his audience.

"It encourages me that they have strong leaders who believe in privatization", said Fred Zeder, president of the Overseas Private Investment Corporation, the U. S. government organization that is sponsoring the businessmen's 10-day investment mission to Russia.

Gaidar also reaffirmed the government's plan for a fixed rate for the ruble by July 1 and full convertibility by the end of the year. He added that many of the bureaucratic snags of doing business in Russia would be eliminated by a new government committee on foreign investment.

He said that while fuel prices would not be raised to world levels until 1994, export tariffs on oil will remain in effect to prevent Russian businessmen from dumping cheap oil on the world market. Gaidar added that the government was open to negotiations on more favorable tariff and investment conditions for certain large-scale private deals with foreign investors.

Responding to a question about guarantees on foreign property in Russia, Gaidar expressed his confidence that a bilateral treaty on the mutual protection of private property signed by Presidents George Bush and Boris Yeltsin would be approved by the Russian parliament.

But Gaidar also admitted thai things were not going as quickly as hi would like.

"This is not because we do not understand that we have to create a positive environment for investors", he said, "but it is a job that cannot be done in a few weeks".