Washington, 12 March 1997 (RFE/RL) - The chairman of one of the largest Western investor companies in Russia, the Trans-World Group, says he is "very pleased" with reports that Russia's Interior Ministry is "looking from a different perspective" at the idea of re-nationalizing Russia's aluminum industry.
David Reuben says he understands that Interior Minister Anatoly Kulikov, who last month said the Russian aluminum industry should be taken away from "foreign capitalists," has now said that Moscow has no plan to seize foreign shareholdings in the industry.
London-based Trans-World Group says it has invested nearly $1.5 billion in the former Soviet Union and its successor countries over the past six years in 11 major metals and mining operations in Russia, Kazakhstan and Ukraine.
In Russia, Trans-World has major shareholdings in the country's largest aluminum smelter, the Gratsk Aluminum Zavod, as well as the Sayansk Aluminum Zavod, and a 37 percent stake in the Novolipetsk Iron and Steel complex. Western experts say Trans-World operations now handle as much as a quarter of all Russian aluminum output.
After Kulikov made the remark about re-nationalizing the aluminum industry, Reuben took the unusual step of purchasing full-page advertisements in major newspapers around the world, including the Sunday "New York Times," all the regional editions of the "Wall Street Journal," "Izvestia," the "Moscow Times" and other Russian newspapers.
The advertisement is an "open letter" to Russian Prime Minister Viktor Chernomyrdin and U.S. Vice President Al Gore in their positions as co-chairmen of the U.S.-Russian Joint Commission on Economic and Technological Cooperation.
The advertisement says that a situation is "erupting in Russia" that threatens the very core of international trade and investment. It says Kulikov's speech was but part of a "craven, political power play, Russian style" aimed at "confiscating certain foreign investments and facilities without due process."
Reuben told our economics correspondent in a telephone interview Tuesday that his company began investing in Russia six years ago "when nobody else wanted to."
"We took our risks, we turned moribund industries into successful industries. We are today reaping the benefits of it, but this is not a shame, this should be told all over the world that if foreign investors follow the likes of Trans-World Group, and work correctly, they will reap good rewards," he says.
Reuben says Russia can ill afford to be turning away foreign investors now. "Russia has the smallest share of foreign investment compared to many of the emerging nations," he says.
While foreign investment in Russia is around $6 billion, China has $60 billion dollars.
"There must be a reason why a great nation like Russia, with the greatest amount of educated people of any place on earth...does not take in the kind of investments it deserves," he says.
The reason, says Reuben, is that Russia does not give off a "signal of stability." The country's image of being "99 percent criminals" is just not true, he says. No one is promoting that it is a country of 99 percent decent people who can give stability.
What he wants from senior Russian officials, says Reuben, is a "political statement" to all investors foreign and domestic, a "clear signal" that gives "a sense of comfort that if we invest there, if we work diligently, if we work honestly, we will reap the rewards we deserve."
(PTO) yyy rus econ e/w - (2) Major Investor in Russia Goes Public
Russia needs to bring in more investors, not just for the country's own benefit, but for the good of long-time investors like Trans-World, says Reuben. "Now that we are producing successfully, we do not want to export these products if at all possible," he says, "but use them in Russia for value added substances, putting more people to work, avoiding unnecessary transportation costs and raising market values."
But to bring in more investors, it is necessary to show a track record that foreign investors have "done well" when they work hard, says Reuben.
The advertisements, which are priced at 50,000 dollars or more each, probably cost Reuben's company hundreds of thousands of dollars, but he says it is worth the price. "We wanted to see some justice being done and we also wanted to send a signal of how serious we are, how seriously we take our business, and that we are prepared to go to the highest forum to meet the issues that are to be dealt with."
Reuben says he has received no direct word from the Russian government, only the indirect reports of changes in the works. He says he has heard from the U.S. side of the joint commission and has outlined his concerns to senior American officials at the State and Commerce departments.
In the past, says Reuben, his company fought its battles in Russia without publicity, but decided this time it was necessary to take a public stand.
It is having some resonance. Trans-World says it has been receiving a flood of calls from American and other western companies and investors, applauding Reuben's bravery in going public, and echoing his concerns about Russia's investment climate. oz/
Robert Lyle
Washington, 12 March 1997 (RFE/RL) - The chairman of one of the largest Western investor companies in Russia, the Trans-World Group, says he is "very pleased" with reports that Russia's Interior Ministry is "looking from a different perspective" at the idea of re-nationalizing Russia's aluminum industry.
David Reuben says he understands that Interior Minister Anatoly Kulikov, who last month said the Russian aluminum industry should be taken away from "foreign capitalists," has now said that Moscow has no plan to seize foreign shareholdings in the industry.
London-based Trans-World Group says it has invested nearly $1.5 billion in the former Soviet Union and its successor countries over the past six years in 11 major metals and mining operations in Russia, Kazakhstan and Ukraine.
In Russia, Trans-World has major shareholdings in the country's largest aluminum smelter, the Gratsk Aluminum Zavod, as well as the Sayansk Aluminum Zavod, and a 37 percent stake in the Novolipetsk Iron and Steel complex. Western experts say Trans-World operations now handle as much as a quarter of all Russian aluminum output.
After Kulikov made the remark about re-nationalizing the aluminum industry, Reuben took the unusual step of purchasing full-page advertisements in major newspapers around the world, including the Sunday "New York Times," all the regional editions of the "Wall Street Journal," "Izvestia," the "Moscow Times" and other Russian newspapers.
The advertisement is an "open letter" to Russian Prime Minister Viktor Chernomyrdin and U.S. Vice President Al Gore in their positions as co-chairmen of the U.S.-Russian Joint Commission on Economic and Technological Cooperation.
The advertisement says that a situation is "erupting in Russia" that threatens the very core of international trade and investment. It says Kulikov's speech was but part of a "craven, political power play, Russian style" aimed at "confiscating certain foreign investments and facilities without due process."
Reuben told our economics correspondent in a telephone interview Tuesday that his company began investing in Russia six years ago "when nobody else wanted to."
"We took our risks, we turned moribund industries into successful industries. We are today reaping the benefits of it, but this is not a shame, this should be told all over the world that if foreign investors follow the likes of Trans-World Group, and work correctly, they will reap good rewards," he says.
Reuben says Russia can ill afford to be turning away foreign investors now. "Russia has the smallest share of foreign investment compared to many of the emerging nations," he says.
While foreign investment in Russia is around $6 billion, China has $60 billion dollars.
"There must be a reason why a great nation like Russia, with the greatest amount of educated people of any place on earth...does not take in the kind of investments it deserves," he says.
The reason, says Reuben, is that Russia does not give off a "signal of stability." The country's image of being "99 percent criminals" is just not true, he says. No one is promoting that it is a country of 99 percent decent people who can give stability.
What he wants from senior Russian officials, says Reuben, is a "political statement" to all investors foreign and domestic, a "clear signal" that gives "a sense of comfort that if we invest there, if we work diligently, if we work honestly, we will reap the rewards we deserve."
(PTO) yyy rus econ e/w - (2) Major Investor in Russia Goes Public
Russia needs to bring in more investors, not just for the country's own benefit, but for the good of long-time investors like Trans-World, says Reuben. "Now that we are producing successfully, we do not want to export these products if at all possible," he says, "but use them in Russia for value added substances, putting more people to work, avoiding unnecessary transportation costs and raising market values."
But to bring in more investors, it is necessary to show a track record that foreign investors have "done well" when they work hard, says Reuben.
The advertisements, which are priced at 50,000 dollars or more each, probably cost Reuben's company hundreds of thousands of dollars, but he says it is worth the price. "We wanted to see some justice being done and we also wanted to send a signal of how serious we are, how seriously we take our business, and that we are prepared to go to the highest forum to meet the issues that are to be dealt with."
Reuben says he has received no direct word from the Russian government, only the indirect reports of changes in the works. He says he has heard from the U.S. side of the joint commission and has outlined his concerns to senior American officials at the State and Commerce departments.
In the past, says Reuben, his company fought its battles in Russia without publicity, but decided this time it was necessary to take a public stand.
It is having some resonance. Trans-World says it has been receiving a flood of calls from American and other western companies and investors, applauding Reuben's bravery in going public, and echoing his concerns about Russia's investment climate. oz/