Moscow, 17 January 1997 (RFE/RL) - The head of a U.S. government agency supporting overseas private investment said today that Russian President Boris Yeltsin's continuing health problems were not hindering American investment.
The President of the Overseas Private Investment Corporation (OPIC), Ruth Harkin, told journalists in Moscow that she was optimistic that U.S. investment in Russia will continue to grow. Harkin, who is in Moscow this week for meetings with senior Russian officials, said political factors were n-o-t influencing the pace of economic progress.
Yeltsin was admitted to hospital last week suffering from pneumonia, just two months after undergoing major heart surgery. His continuing health problems have led to calls by Russian opposition leaders for his resignation. Some observers have expressed concern that the political infighting in the Kremlin during Yeltsin's illness have contributed to an uncertain investment climate.
But Harkin announced that the U.S. agency had ended what she called "one of our busiest years ever in Russia." She said OPIC last year had extended more than $ 1 billion in support to over 40 American investments in Russia.
Harkin said the agency had expanded services and investment in Russia over the past year, including what she called a "special commitment" to defense conversion projects. She said OPIC has now approved more than $ 500 million for defense conversion projects in Russia.
Its latest conversion project is in support of a joint venture between the U.S. firm Pratt & Whitney and a Russian manufacturer of liquid-fueled rock engines once used by the Soviet military. OPIC will provide $ 65 million in political risk insurance to the joint venture, which will redesign the engines to launch commercial satellites.
Harkin said the agency had provided expanded political risk insurance for investment projects in Russia. But she explained that the main risk to investing in Russia was n-o-t the state of the President's health, but rather the country's brief experience with a market economy.
As Harkin put it: "I don't think any American investor is making investment decisions based on President Yeltsin's health." She admitted that OPIC considers Russia a high risk country for foreign investment, and provides political risk insurance to investment projects. But she noted: "It is not because we don't expect our projects to do well, but because there is not a long history of doing business here."
Expressing confidence in Russia' economic reform program, Harkin said her talks with senior government officials had reinforced her belief that the economic changes in the country were irreversible.
Harkin, who arrived in Moscow two days ago, has met with Presidential Chief of Staff Anatoly Chubais and First Deputy Prime Minister Vladimir Potanin, among others.
OPIC is a self-sustaining U.S. agency that encourages private investment in Russia and some 140 other countries. It aims to encourage U.S. businesses to invest in developing nations and emerging economies.
U.S. investment in Russia has been low compared to other, smaller countries in Eastern and Central Europe. Total U.S. investment in Hungary - a small nation of just 10 million people -- has exceeded that in Russia, which has a population of nearly 150 million.
Likewise, OPIC's support of investment projects in Russia represents only about one-tenth of the agency's assistance to investments worldwide.
However, Harkin sounded a positive note about the future. She predicted that the amount of U.S. investment in Russia this year will be, in her words, "much greater" than last year, especially if oil pipeline projects get off the ground. Harkin said OPIC would play an active role in encouraging more U.S. investment. As she put it: "We are very optimistic about doing business here."