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US-Russia Cooperation Road Map

John Beyrle, the US Ambassador to the Russian Federation, lectured on the US-Russia bilateral relations at the HSE. Answering some queries he sketched common ground for US-Russia cooperation strengthening. In his speech the US Ambassador focused on the "Four I`s" doctrine that is promoted by the Russian President D. Medvedev.

John Beyrle, the US Ambassador to the Russian Federation, is one of the most experienced US professionals on Russia and Eastern Europe.  Ambassador Beyrle's service has included two previous missions at the U.S. Embassy in Moscow.  In addition to this, in early 70-s he attended training courses at the Philology Department of the Leningrad University. During this period he worked as an interpreter at US organized exhibitions in the USSR.    In 1982 he served as an interpreter during US Vice President George Bush Snr's visit to Russia.  

His father, Josef Beyrle, has a fate tightly connected with Russia. Hero of the Second World War, he served in the US 101st paratroopers unit, and is the only American who fought against the Nazis as a Red Army soldier. In January 1945 he escaped German capture and saw service in a Russian regiment in Poland as an armored vehicle gunner.

The five "i"s:  key terms for economic prosperity

John Beyrle started his speech by quoting Rahm Emanuel, the White House Chief of Staff, saying: "Any crisis is a path to new opportunities that we are sinful to ignore". During the current crisis the US is planning comprehensive reforms to the healthcare system to make it freely available for all. Bill Clinton's previous attempt to reform the system failed, but now, at the height of the crisis, it's time to accomplish this reform, Beyrle believes.

Beyrle is confident that this way of development is right to implement in Russia. As he said, Russia had been developing intensively for eight years after the fall of the early 90s.

Today the Russian economy is 9th in the World. Before the crisis, the average annual growth was 7%. Over 8 years the average income of the population doubled.  The number of the poor decreased and the middle class rose by 25%.   

In spite of these recent achievements, the current crisis has revealed that all this is not enough for long-term prosperity. The aim of the Russian authorities to see Russia in fifth place alongside other leading world economies can be achieved.  But the export of raw materials and the import of components are not enough alone to achieve this ambitious aim.    

The so called four "i''s - institutions, infrastructure, innovations, and investments - that were mentioned in the Russian President D.Medvedev`s speech at the 2008 Krasnoyarsk Economic Forum must be among the priorities. One more "i" for "intellect" has been added lately. But independently of the number of "i"s, the final aim is the reformation and modernization of the Russian economy - measures that are heartily welcomed, the ambassador  always quoting the Russian president.

As Beyrle said, raw materials and industrial potential are not a source of prosperity for modern countries. But the system of institutions and laws really can be. It is a vital task to inspire respect for law, to eliminate legal nihilism and corruption, he added. It is obvious that the Russian government is guided by all these. From this point of view, the four "i"s + "intellect" is a relevant road map for development.

Russia should try to strengthen judicial independence, spread economic freedom, cut bureaucracy and provide equal opportunities.   But first of all, government should eliminate corruption and private property infringements, Beyrle believes. As he said, Medvedev's speech on institutions is strong evidence that Russia is aware of measures that could provide stable development and the strengthening of the middle class.

The Russian government stresses the necessity of investing more in infrastructure.  In addition to human resources support such investments are the basis of supporting long-term economic growth in Russia. Infrastructure investments act as an economic stimulus and the foundation for long-term stable growth.

Unfortunately, the financial means for investing in development are restricted by the crisis. But thank to the reasonable economic policy that the Russian government has followed, the state has considerable reserves.  Here Beyrle once again repeated Medvedev's statement that "it could be hardly to think if Russia had met crises overloaded by problems similar to such of 90s".

Economic diversity seems to be a very important step for Beyrle. As he said, the US government supports such an approach. Economic diversity is necessary to reduce the Russian economy's reliance on the export of raw materials.

With oil and gas export prices being so low during the crisis, it is time for measures to encourage economic diversity.  To wait for an increase in the price of raw materials price means to ignore opportunities for further development, Beyrle believes.

The sixth "i" means "integration"

"I need to assure you that US wishes Russia success", Beyrle emphasized. It is hard enough for the US and other countries to counteract crisis without Russia's tentative as strong partner.   The prosperity of Russia will contribute greatly to the global prosperity that is a condition for US prosperity. 

So one more "i" can be added to the five mentioned above - "integration". Russia has gained a lot through integration. But critics often overlook this. The rapid economic growth over the last few years would have been impossible without integration. This growth could not have been so successful without foreign investments. For decades, the global trade system, currently in decline, helped many people to escape from misery. And the response to this decline must be this to strengthen the system.

Russia's WTO membership is a key issue of integration development. Both the US and Russian presidents stressed that Russia's WTO membership is a priority and it is not light years away. Russia needs to overcome some obstacles, but the US will do all it can to assist Russia. Russia's WTO membership will be the driver for important reforms that will make the Russian economy transparent and stable.  Here Beyrle quoted Susan Shvab, the US Commerce representative, who characterized WTO membership as a "fortunate secret" since member states are free to undertake unpopular interior reforms and present them to their political opponents as WTO demands. 

Russia's WTO membership will be the foundation for stable US-Russia commercial relations and a reason to cancel the Jackson-Vanik amendment, Beyrle believes. Moreover it will be possible to achieve bilateral agreement on investments and will be a way to strengthen US-Russia economic relations.

US-Russia trading is worth about is $26 billion and the total investment volume is about $20 billion. But at the same time the monthly trade turnover between the US and Mexico is much higher than the US - Russia annual trade turnover. It is strange situation, Beyrle thinks.   

Despite the geographic distance between the two countries, the total volume of trade between the US and Russia must be much higher. Russian companies, including the "Severstal" group, are actively involved in multi-billion investment projects in the US. American industrial groups are interested in the Russian market. And Microsoft's most recent statement on investments to Russia provides further evidence of this trend.

As Beyrle thinks, US - Russia joint efforts are the only way to achieve stable growth of the world economy. It is not 1998 in Russia or 1929 in the US. There have been enormously positive changes in the Russian economy thank to stable growth and incomes saving policy over recent years. It demonstrates ability to overcome current troubles and proceed economic growth. Russia, thanks to the HSE's efforts as well, has obtained comprehensive knowledge and experience in struggling with crises. 

The new US administration has made intensive efforts to restore confidence among US society. "But we clearly recognize that our economic prosperity depends on other countries success," said Beyrle.

Answering some questions the lecturer said that the US doesn't view Russian diplomacy efforts in Latin America as a potential threat. "When Russian warships or jets are drawn into the region we are not afraid of it since that doesn't change power balance in the region", he said.  Beyrle also mentioned that both countries are demonstrating very similar position on the South Korea nuclear programme.

It is too early to draw any conclusions on Russia and Iran's cooperation. But Obamas` administration has taken measures to intensify negotiations with Tehran. For years Russia encouraged the US administration to make such step, said Beyrle.  Taking into consideration these efforts we are looking forward to closer cooperation within the "G-6" group (Russia, US, China, Britain, France and Germany) that is negotiating with Iran on their nuclear programme. 

In the final part of his speech Beyrle mentioned that the US embassy in Russia   is also seeking to increase the bilateral student exchange programme. In 2008 a record number of US visas, 180 000, were granted to Russians, with  a minimal number of refusals, only about 5 %.  In 2008 more than 30 000 students from Russia visited US as part of the Summer Work and Travel Programme.  The US embassy is working on how to make the US president's visit to Russia (planned for the mid of July) coincide with the Russia-US NGO forum. 

Vasili Kashin for the HSE News service