In a statement published Thursday from a luncheon in Detroit hosted by the Detroit Regional Partnership and sponsored by the Ford Motor Company, U.S.-Russia Business Council (USRBC) President Eugene Lawson said that the time has come for U.S. companies to begin to consider Russia as full of viable business opportunities where Russian consumer and American corporate interests could be mutually served.
Lawson and Russian Senator Mikhail Margelov, Chairman of the Federation Council’s International Affairs Committee, visited Detroit while on a five-day tour across the United States.
Lawson emphasized that Russia’s money from oil revenues has at last “trickled down”, and Russian consumers are ready to buy plenty of foreign goods and services, while Russian investors have plenty of cash that they would love to sink into Western businesses.
Russia’s economy was so bad less than a decade ago that it was no longer considered to be a “superpower” and its future looked utterly grim. Many Russian citizens who had rallied behind the bloodless revolution of 1991, when the Soviet government finally collapsed in line with the fall of the Soviet-backed communist government of East Germany in 1989, were clamoring for at least a partial return to the old ways.
Record-low prices for oil-Russia’s greatest exportable commodity-and a financial crisis in 1998 when the Ruble lost 70% of its value against the U.S. dollar in only six months of currency trading and behind-the-scenes corruption flourished almost without limits in the broken pieces of the former government and economy made Russia an economic wasteland, arguably worse off than before the revolution.
But since then, most things about the economy have gone in the opposite direction for Russia.
Now, according to the World Bank, the steeply rising price of oil is set to continue bringing new money into the exploding Russian economy. In fact, the influx of foreign investment and oil profits is so strong now that it could hinder government attempts to keep a cap on inflation.
Capital investment in Russia grew by 19.9% in the first quarter of 2007, including U.S. dollar investments of $9.8 billion. Metallurgical goods and commodities are the fuel of the Russian export-driven economy.
Russian consumers now have money to burn-Ford motor company made $2 billion in sales in Russia in 2006, as compared to $17 million in 2000. Michigan’s exports to Russia from 2001-2006 grew by over 1000%, whereas its exports to the rest of the world grew only 24% in that same time period.
“Don’t go to Moscow or St. Petersburg where the market is saturated. Explore Russia’s regions – the real Russia — for potential business opportunities,” said Margelov in his bid to entice American businessmen to invest in his once-again strong nation.
Sources of information:
U.S.-Russia Business Council (PR Newswire), “U.S.-Russia Business Council President and Russian Senator Margelov Stress Mutual Opportunities in Increased U.S.-Russia Trade Ties”