Stepping into the XXI century

TO FIND THE BEST WAY

        "Of course, St. Petersburg is meeting the difficulties common for our country in general but at the same time it is exerting a positive influence on the whole situation by supporting the search for the best ways to further Russia's development.
        One of these ways corresponds to the idea of Peter the Great: make St. Petersburg Russia's exit to the outer world and to strengthen our country's economic and cultural links with the world community.
        Today St. Petersburg's seaport handles 25 percent of Russia's exports and 32 percent of its imports. Our city's high scientific and industrial potential and Leningrad region's natural resources attract both foreign and Russian investors. The beauty of our city's architecture, its rivers and canals, attract a great number of foreign tourists. The city is visited by nearly 1,5 million guests every year… Today's main task is to use this great potential by inserting it into the city's and its region's economic turnover and gaining profits from it, without at the same time harming the environment. All this requires great funds, new laws, and strict control upon their execution. We also need clever economic management…
        All these considerations are taken into account by St. Petersburg's administration that is now, together with specialists, finishing work upon developing its own external economic concept. We are sure that this concept must be coordinated with Leningrad region's strategy, because the city's and its region's economies are mutually integrated.
        This concept is based on such objective realities as our region's unique geographical position, scientific-and-technological potential, high level of culture, possession of skilled manpower and raw materials, and other advantages.
        It is necessary to understand that besides our own potential we shall need foreign resources, western experience, and new environmentally friendly technologies. We must not be afraid to widely involve foreign investments… Foreign investments may positively influence the expansion of Russia's economy if we implement strict laws and rules of conduct. The whole modern world strives for the attraction of investments, so it would be unwise of us to avoid them. Investments mean the creation of new jobs, confidence in the future, and material well being. Investments are new sources for the replenishment of the state treasury and deployment of the new programs for social development.
        Sociologic surveys among foreign and Russian businessmen, publications, and interviews help us to see that foreign investors are taking interest in Russia. But they are afraid of our country's political instability, disorder in the field of legislation, arbitrariness by local authorities, high level of crime, weakness of infrastructure, bad environmental situation, and unfamiliarity of the administrative rank and file with working in a market. Time may change the importance of one or another factor but in general they have remained constant for a number of years now, so we must take this into consideration as we work out the concept of external economic activities. The main purposes of the regional strategy for external economic activities are the following:
- attraction of foreign investments, advanced technologies and experience for the structural reorganization of the city's and the region's economy, creation of new jobs and modern infrastructure;
- working out and testing of new methods of external economic cooperation and their diffusion in the country's other regions;
- realization of the most important projects through the usage of local and federal programs;
- support for external economic relations in the priority fields of the city's and its region's economic and public life;
- repatriation of foreign funds belonging to Russia for their profitable usage in Russia in general and St. Petersburg in particular.
        St. Petersburg's external economic strategy must definitely take roots in our country's economic strategy. At the same time, the city's strategy is significant by itself if we take into account the city's role in Russia's external economic relations.
        Like a good master who cleans his house up before receiving guests, we first of all must take care of having good roads, clean air and water, and services for people having different tastes and incomes, as well as of having favorable psychological climate and personal safety. Only then Petersburg will gain the reputation of a city convenient for living in and having a rest in it. And, after all, we need order, comfort, and safety ourselves…
        Realization of external economic strategy needs proper legislative ground. To attain this we must submit the projects of the documents to the City Assembly. That would be effective as well to establish a Foundation for the Support of External Economic Activities of our city and its region. Its creation would be a significant political step and it would help to support the companies possessing interesting technologies or investment projects. The Foundation must be sponsored by the state as well as by Russian and foreign companies. It must be controlled by the collective leadership representing the executive and legislative branches of power, economic structures, and bank associations.
        In our opinion, the decrease or abolition of local taxes, charges, and rent payments may contribute to the increase of foreign investments. The same reliefs may be given to Russian companies using advanced technologies. It would be effective to introduce a special order of registration and of getting the right of residence in Petersburg for certain foreign companies, for example, to introduce a "permanent guest right of residence" requiring minimum formalities. We can mortgage the city's real estate with the purpose of its insurance as well as use a special simplified order of registration of the joint ventures that aim at industrial investing or industrial cooperation.
        We think that it is quite necessary for the city's medium and small business to participate in the external economic relations. This work may be fulfilled by the Center for the Development of External Economic Relations. We think that this Center must not belong to an executive power. The Center's activities must be realized under control to prevent it from exceeding the limits of its tasks.
        We think it is high time to establish the City's and the Region's Association of Exporters and Importers to give it the role of information, analytical, and consultative organization protecting the companies' interests before the St. Petersburg administration and protecting the Center's interests in the foreign markets.
        Elaboration of the concept of external economic activities was carried on in strict conformity with federal legislation. We were fully conscious that the realization of this concept may be a success only in case we keep Russia's territorial integrity and political and social stability.

P.S. This article first appeared in St. Petersburgskie Vedomosti, ¹ 19, January 31, 1996. Vladimir Putin used to be St. Petersburg Deputy Mayor, Chairman of the Committee for Foreign Economic Relations.Published in brief