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Clinton-Yeltsin Meeting Good for Colorado Companies
When Presidents Clinton and Yeltsin met for the fifth time in 18 months, it clearly contracted to the Cold War era of rivalry and confrontation from 1945 through the late 80s. The high politics of economics unquestionably replaced those of an earlier defense-centered quest to spiral the U.S.-Soviet arms race.
What specifically did the summit accomplish of interest to the business community?
Primarily, Yeltsin emphasized private investment support instead of his earlier pleas for aid and humanitarian assistance. Consequently, agreements were signed or pledged normalizing trade and opening the way for more than $2 billion dollars in trade and aid. A "partnership for economic progress" was concluded to swiftly normalize trade and guarantee each side open access to each other's goods and services.
Prior to the summit, Clinton signed a declaration freeing Russia from restrictions imposed by the Jackson-Vanik Amendment, which had slapped high tariffs on the former Soviet Union as punishment for barring free emigration of Jews and other minorities. Since 1990, Russia received annual waivers from the law, but now the measure has been permanently remanded.
And the Export-Import Bank signed two agreements totaling $689 million in loan guarantees for Permneft and Nizhnyvartovskneftegaz oil producers, and others for airline, computer and communications projects.
Russia and the World Bank also concluded a $500 million loan to beef up declining Siberian oil productivity. This package from the World Bank also provided $200 million in loans for enterprise privatization projects.
Other economic agreements signed at the summit provided for U.S. assistance in helping Russia rewrite and formulate a consistent tax code, plus other proposals to combat crime, nuclear smuggling and narcotics trafficking.
Ruth Harkin, head of the Overseas Private Investment Corp., used the summit occasion to announce that she backed $2.3 billion in Russian projects in 1994, and planned to substantially increase that number in 1995.
Goodwill aside, the meetings were not without points of contention. Clinton voiced concern about recent protectionist measures instituted by the Russian side and privately complained to Yeltsin about restrictive new tariffs imposed on American automobiles, aircraft parts and candy. Firms such as Mars Corp. of Cincinnati, producer of Snickers, the best-selling candy bar in Russia, are negatively impacted by these high tariffs.
Colorado companies already doing business with Russia or considering market entry directly benefit from the summit. Colorado-Russian trade levels will increase in 1995 and create more jobs and business dollars for the state. As it stands, our most active industries in Russia include oil and gas, telecommunications and computer software.
Colorado exports to Russia (excluding agricultural commodities and the service section) totaled $10.2 million in 1993. The state's strongest-performing export items include electronics, computer equipment and software, machinery and transport equipment and medical instruments. Russia is Colorado's third-largest market for wheat, corn and beef.
The number of Colorado companies and firms in Russia is growing and the list is already long - Martin Marietta, Newmont Mining, Bateman Engineering, Concord, Holme Roberts & Owen, Hogan & Hartson, Grynberg Resources, Greenberg Baron Simon & Miller, USWest, Cyprus Amex, CH2M Hill, Anderman Smith Overseas, St. Mary's Minerals, Monfort, Storage Technology, Arthur Andersen and more.
The Russia-Colorado business link has been strengthened as a result of Yeltsin's summit visit to America. His personal meetings with our leading companies, along with the new economic initiatives, will benefit the state.
Russian-American economic ties are destined to grow, and Colorado is right in the middle of the action. The September 1994 Yeltsin-Clinton summit constitutes a landmark event in the history of American-Russian economic relations. It has consolidated a commitment from both sides to make the business relationships grow and work. Our business community will benefit by taking heed of this calling.
Deborah Anne Palmieri
The Denver Business Journal
October 28-November 3, 1994
Copyright 1999 The Russian-American Chamber of Commerce®
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