A Yeltsin Win

[Deb Palmieri on Russia Table of Contents]

The following article was published in the Russian Commerce News, July-August 1996. The Russian Commerce News is the official publication of The Russian-American Chamber of Commerce®.

A Yeltsin Win

You heard it first from the Russian-American Chamber of Commerce. We told you in early 1996 that Yeltsin would win the election, fair and square. And in the election aftermath, there would be no revolutions, civil wars, social disintegration or the like. It's official and it's history now, President Boris Yeltsin will serve another term in office. I hope now the fears and hesitations about Russia's viability as an international economic player and strong investment prospect have been removed once and for all and that we can get down to the business of expanding commerce and trade in this exciting and promising marketplace.

The recent Yeltsin win will consolidate the long-term stabilization of Russia's business climate, and a significantly expanded influx of foreign, especially American, direct investment dollars. Investors will have a greater degree of certainty that the fundamental course of reform will not be interrupted by threats of nationalization or adverse economic and political change. Relative to international capital investment, flows of dollars to Russia since 1991 have been minuscule; about $6 billion in foreign direct investment. American dollars account for about $2.5 billion of that. We presently account for the greatest number of joint venture deals in Russia, over Germany, France, England and Japan. The amount of investment dollars and number of joint venture projects can be expected to expand significantly now that the elections are over. The symbolism attached to this victory is enormous, and it will encourage the "hold-backs" to release money-in-waiting. It will also strengthen the notion that Russia is a long-term investment bet and can be depended on to yield benefits via carefully structured business transactions.

Our trade turnover with Russia, presently at about $6 billion, will likewise soar, easily to $10 billion by 1998; and $30-40 billion by the turn of the century. This bodes well for American exporters, who can expect to sell increasing amounts of food products (including meat, chicken, baby foods, and other processed foods), high-tech computer and other electronic items, a host of consumer products, including personal care, household items and so on. The potential of Russia's marketplace for Americans is enormous, given its pent-up consumer demand after 75 years of deprivation under communism and the present inability of its domestic industries to satisfy these needs. The complementarity of economic need between the U.S. and Russia is such that, given that they can satisfy our demand for natural resources, specialized R&D in scientific areas, and that they possess a highly educated population in science and technology, the future prospects for a strong, healthy, bilateral trading relationship will unquestionably flourish and expand.

Americans who realize this potential and its inherent opportunities now, deftly fielding present risks and obstacles, will enjoy enormous advantages and a toehold into a golden opportunity, moreso than will the inevitable hoards of jonny-come-latelys.

Deborah Anne Palmieri
Russian Commerce News, July-August 1996