The Main Agenda For President Bush & President Putin in Maine is to Ease Tensions
Monday, July 02, 2007PAUL KANGAS: Today President Bush and Russian President Vladmir Putin met at the Bush family compound in Kennebunkport, Maine. The talks were aimed at reducing the tension over a missile defense system and Iran's nuclear weapons program. But as Stephanie Dhue reports, despite recent diplomatic frostiness between the two countries, business investment in Russia is heating up.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: High oil prices have helped fuel economic growth in Russia. The country now has a growing middle class that is busy shopping, building homes, and buying furniture. Russia expert Leon Aron, says there's a pent-up demand for consumer goods.
LEON ARON, DIR. OF RUSSIAN STUDIES, AMERICAN ENTERPRISE INSTITUTE: This is the market that has been starved for the previous seven decades. So clearly, it's like in China, there's an immense amount of buying and they're pretty far from the saturation point.
DHUE: U.S. companies are eager to help meet that demand. The U.S. and Russia now has a $30 billion trade relationship. While political tensions between the two nations have flared, Eugene Lawson of the U.S.-Russia Business Council hopes, like with our other trading partners, increased commercial ties will improve political relations.
EUGENE LAWSON, PRESIDENT, U.S.-RUSSIA BUSINESS COUNCIL: China's our third largest trading partner. We can't let the political rhetoric get too far out of hand. We must be able to talk to them, and what we're hoping for is growth in commercial trade with Russia, to put a perimeter around it.
DHUE: Russia has put a perimeter around foreign investment in what it deems strategic assets. It has pressured foreign investors to give back major oil and gas projects started before Putin came to power in 1999. And it has closed the door to investment in precious metals, transportation and nuclear materials. While President Putin has pushed for Russia to be a member of the World Trade Organization, some experts say Russia is only prepared to do that on its own terms.
ARON: The objective of joining the sort of liberal, free market, democratic, capitalist economy is no longer -- I believe by this Kremlin -- is no longer set even as a distant goal.
DHUE: Tom Carver of the consulting firm Control Risks, says for many companies doing business in Russia, politics are only a small factor.
TOM CARVER, SENIOR VP, CONTROL RISKS: If you're exporting woman's lingerie or shampoo or whatever to Russia that's not in a strategic sector, really what goes on at Kennebunkport is not going to make any difference to you.
DHUE: Carver says businesses should focus on the ongoing risks and be sure to understand Russia's complex regulations and find a credible business partners. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
