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Russia's Ivanov Says Economic Ties Are Next Step In 'Reset'

  • Nikola Krastev

Russian Deputy Prime Minister Sergei Ivanov speaks at the Council on Foreign Relations in New York on April 4.

Russian Deputy Prime Minister Sergei Ivanov speaks at the Council on Foreign Relations in New York on April 4.

NEW YORK -- Economic ties between the United States and Russia must be improved if the two countries want to "cement" their relations, according to Russian Deputy Prime Minister Sergei Ivanov.

Ivanov spoke April 4 to the New York-based Council on Foreign Relations.

In the question-and-answer session that followed, Ivanov was asked what he thought the next step should be in the "reset" in Russian-U.S. relations embarked upon after President Barack Obama took office in 2009.

“I am fully convinced it’s not security -- it’s economy, it’s high-tech development, it’s investments,” Ivanov said.

In his speech, Ivanov said bilateral economic ties were languishing far below their potential. In 2010, he said, trade between Russia and the United States amounted to only $23.5 billion. He said Finland and Sweden invest more in Russia than does the United States.

But Ivanov also noted some improvements. He said more and more leading U.S. technology companies, such as Google and Microsoft, were taking part in the development of the Russian high-tech center at Skolkovo outside Moscow.

He also noted that a significant part of the design for the new Boeing 787 passenger aircraft called the “Dreamliner” had been done, not in Chicago where the company's corporate headquarters is located, but in Moscow by a team of young Russian designers.

“In the context of Russia’s new innovation-driven development policy," Ivanov said, "we hope to expand our bilateral economic horizons in the following priority areas: space, information technology, medical technology, nuclear energy, and power efficiency.”

Russian President Dmitry Medvedev (right) listens to California Governor Arnold Schwarzenegger during a meeting in Skolkovo in October. Schwarzenegger led a delegation of prospective U.S. investors in Skolkovo.

The audience of mostly U.S. policy experts and business executives was particularly interested to learn what assurances the Russian government can provide to potential investors that the current widely advertised anticorruption drive will not fizzle out, as has happened in the past.

Ivanov downplayed the problem of corruption in Russia, which most independent observers believe is endemic.

"There is corruption in Russia; there is misuse of rule of law occasionally," he said, "though it’s not as misused as it has been quite recently. I am convinced about that."

Ivanov said the penalties for corruption have been increased and that there are more corruption cases going through the courts now. Even some senior officials have been sentenced to jail terms for corruption, he said.

Ivanov admitted that the Russian legal system is far from perfect and that much remains to be done. But he disagreed with the assessment that it is totally bankrupt or inefficient.

"It is weak, for example, in investigating economic crimes because we don’t have experts -- in both federal law protection [enforcement] services or in court -- who are very bright in modern economic realities," he said. "That’s our weak point."

Asked about the 2012 presidential election in Russia, Ivanov declined to speculate, saying only that he meets often with both President Dmitry Medvedev and Prime Minister Vladimir Putin and that the election is one topic they never discuss.

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