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Russia: There Is Room For Improvement In Relations With U.S.

Moscow, 12 December 1997 (RFE/RL) -- "I believe that today the fundamentals of U.S.-Russia relations...are basically sound," says James Collins, the new U.S. Ambassador to the Russian Federation.

In an exclusive interview with RFE/RL in Moscow this week, Collins said the U.S. and Russia will always have certain disagreements and certain differences of views. But, he said, to the extent we have disagreements, now they tend to focus frequently on tactics of how to proceed. Or, he adds, "we can have a difference of perception about how urgent a matter is."

Collins, in the interview, said that, "if you look at the interests of two great nations, who are nuclear superpowers and major economies," fundamental relations are basically sound. He added that "the basic point" is that, after more than 70 years of ideological confrontation, "what we do now is sit down and talk. To a very great extent I think we have been quite successful at finding ways to manage our issues."

Collins's assessment of the development of bilateral relations is significant, because the Ambassador, who took the oath of office in September, is a career diplomat with extensive experience in Russian Affairs. He is in Moscow for the fourth time.

Collins, who first came to Moscow in 1965 as Exchange fellow at the History Faculty of Moscow University, served twice before at the American Embassy in Moscow. Once, from 1973-1975, when Leonid Brezhnev was Communist Party leader, and the second time from 1990 to 1993, when he - as Deputy Chief of Mission - witnessed the disunion of the USSR.

Collins said that, when you look at even many of the most contentious issues, such as Iran at the moment, our Presidents have agreed that there isn't any strategic difference between us, about the interests we both have in preventing Iran from developing weapons of mass destruction or getting the technology to deliver them.

However, analysts say that despite the Presidents' ability to find ground for agreement during their meetings, there are security issues on which implementation is proceeding too slowly. One such issue is the 1993 START-Two Treaty. The Treaty provides for the U.S. and Russia to reduce the number of warheads to fewer than 3,500 each -down from an estimated 8,000 currently. The U.S. Congress ratified the Treaty, but ratification in Russia's State Duma has been deferred, and experts in Moscow believe ratification will likely not take place in the Communist- and nationalist-dominated Duma before next Spring.

According to some analysts, another Presidential summit could be necessary to address the issue. But Collins told RFE/RL that "the Presidents already had a Summit (eds: the Helsinki Summit, March, 1997) on this issue." He added that the U.S. believes Washington and the Kremlin have addressed the issues that were raised, "and, frankly, we hope to see the next summit focusing on a broader agenda for the coming century, and within that, on the security issues associated with what we do after START-Two." He added that the first step now is ratification of the agreement in the State Duma...and that "no-one is preventing legislators to do so."

The competition for leadership in the development of energy resources in the Caspian region, and, therefore, for influence on the former Soviet States in the area, is also frequently mentioned as a possible source of tension between Russia and the U.S.

Collins said the U.S. and Russia, along with the other Caucasus states and Kazakhstan, share a basic interest in the development of those resources. He added that the U.S. "thinks this is an area where you can have a great deal of benefit for all who can be involved in it," and said he believes that "there are many in Russia - particularly representatives of oil companies involved in consortia for the development of the resources - who see it that way as well."

Collins said, "the development of the Caspian basin is in the interest of our political interests, because it will create greater stability and long-term strategic cooperation." He also said that, in the U.S. view, "those are interests that, in fact, are shared with Russia - and are not against Russia." Collins admitted that he finds different views in Moscow on the subject, among Russian politicians, but did not elaborate further.

Despite welcoming international cooperation and realizing the need for foreign investment in Russia's economy, many Russian politicians are concerned that the growing involvement of foreign companies in the development of resources in Russia and in countries of the former Soviet Union could weaken Russia's economy and decrease Russia's future political influence in the region.

Collins said that, despite the recent "immense improvement" in the business and investment climate in Russia, "there is certainly no question that there remains a great deal of work to be done to develop the legal-and-economic infrastructure to make the business climate here attractive to foreign business and for foreign investors."

He also said recent "unfortunate incidents," including what he called "groundless" espionage charges against telecommunication engineer Richard Bliss (who was working for am American firm under contract with a Russian company to install a telecommunications in Rostov-on-Don) "can have a very negative effect on the investment and business climate." He added that business people cannot feel that confident that they can do normal commercial work, have understandable and clear rules that govern it and fair treatment by the authorities.

Collins said that "American investment remains the biggest in Russia of all the foreign investments," and totals, at this point, "around $5 billion, which is about 25 percent of the total foreign investment" in the country. He said he is "not satisfied that this is as large as it should be," and that the U.S. plans to continue to pursue additional investment.

Collins said that the recent international stock market crisis has shown that "Russia is not immune any longer to many of the forces that influence emerging markets." He added that "the Russian government and its financial leaders are getting quite high marks for managing the Russian economy during the global crisis."

He also said that the Central Bank and other Russian financial institutions "have, in fact, managed their way though a potentially very dangerous crisis and come out of it with a reasonably stable ruble, an economy which has not collapsed or gone into crisis and which is now looking at decisions with some new experience."

However, he said, serious problems remain, for instance "the budget has been passed (eds: the budget was approved on first reading. it requires four readings in the Duma, Federation Council approval and Yeltsin signature to come into effect), but unless there is some restructuring of the basic business of income and expenditures, there is going to be a substantial deficit." And he added that "there is a need for effective tax collection, an effective tax code. Those things have yet to be addressed."

As a result, according to Collins, "the reality here is that there is a difficult investment climate. Russia is not attracting investment up to its potential. To correct, or change this situation, I think, it is clear Russia itself has very important decisions to make to be more competitive as a place for investment. "

He concluded that "Russian citizens really need to understand that they are in a world that competes for capital and for investment. And people with capital, on any given day, look at opportunities and options on where to put their money. I have told a number of my Russian colleagues that Russia will know it got it 'right,' because money will flow."

Commenting on growing concern in Russia and abroad that Western diplomats, including those from the U.S., tend to base decision-making on Russia mainly on the views of a very limited circle of Moscow politicians, Collins dismissed the concern, but agreed that "we continually hear we are not talking to the right people." He added that members of the U.S. mission in Moscow "do talk with almost every element of the spectrum of opinion" in Moscow and in the Russian regions. And, he concluded, "we do understand the complexity of what is going on hereabout, I would also say that there are times when citing complexities is simply a means to suggest that people are unable to take action."