President Vladimir Putin assured U.S. executives of Russia's commitment to free markets during a meeting yesterday at his palatial St. Petersburg residence that observers called...
ST. PETERSBURG, Russia — President Vladimir Putin assured U.S. executives of Russia’s commitment to free markets during a meeting yesterday at his palatial St. Petersburg residence that observers called an attempt to undo the damage caused by breaking up Yukos oil company.
The leaders of 11 companies including Citigroup, International Business Machines and ConocoPhillips attended the meeting to ask Putin to explain “the rules of the road.”
Putin’s guests included News Corp.’s Rupert Murdoch, chairman of U.S. oil giant ConocoPhillips James Mulva and IBM Chairman Samuel Palmisano. Putin wanted to reassure investors amid signs of a flagging Russian economy, after years of soaring growth due largely to oil exports.
Last year, the government recorded 7.1 percent growth in gross domestic product. This year, Russia’s Economic Development Ministry said it expects less than 6 percent, while the International Monetary Fund forecast 5.5 percent.
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Observers partly blame flagging investment, particularly in the oil sector, on the Yukos affair, which included the imprisonment of the company’s politically ambitious billionaire owner Mikhail Khodorkovsky and the sale of its core unit to a state oil firm.
Putin restated his commitment to make the economy more attractive to foreign investors and to diversify growth away from traditional raw-materials industries into high technology.
He promised that his government would work to streamline tax regulations and set clear rules for foreigners’ involvement in Russia’s strategic energy sector and other key areas of the national economy.
“If we understood more about the rules of the road, if we understood more about how the court system might work, and how the taxation might work, we could encourage a lot more direct investment,” Citigroup Chairman Sanford Weill said.
But Putin criticized U.S. restrictions on trade with Russia, including restrictions on exports of U.S. high-speed computers to Russia and American trade sanctions linked to Russia’s nuclear cooperation and other contacts with Iran.