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East: Muenster Economic Forum Opens In Moscow

Moscow today plays host to the sixth Muenster conference, a forum bringing together government officials and businessmen from both East and West to facilitate economic development. RFE/RL Moscow correspondent Sophie Lambroschini attended this morning's opening and files this report:

Moscow, 5 December 2000 (RFE/RL) -- The Muenster forum now being held in the Russian capital brings together businessmen and government officials from both East and West to discuss economic development.

The forum was first held eight years ago as a way to promote economic transition in Eastern Europe and the former Soviet Union. The last conference was held in the Czech capital Prague in 1998.

Participants at this year's forum say their efforts so far have succeeded, and point to the growing amount of direct foreign investment in Eastern Europe and the former Soviet Union. They say foreign investment has increased from near zero in the 1980s to $75 billion in 1998, and that this at least partially reflects the dialogue inspired by the Muenster process.

Other achievements so far include foreign investment in the telecommunications industries in several countries, efforts to make profit repatriation easier, and a convention -- signed by 12 Muenster countries -- to reduce bribery and corruption.

Wedige von Davitz is the head of the department of foreign trade at the German Economics Ministry. He tells participants that his country's trade and investment experience shows the enormous potential of the Eastern markets:

"We already conduct more than 16 percent of our foreign trade with the so-called transformed [that is, transitional] countries and this is a process that is rapidly accelerating and it shows a large potential for further increase. One example of this phenomenon is German investment in Hungary, which in 1998 amounted to 16 percent of total investment in the transformed countries."

But Davitz says the transitional countries must constantly work to keep their economies attractive to foreign investors who make investment decisions based on pragmatic market criteria:

"As all those involved in world economic affairs realize, this [investment] relationship is not dictated by personal or political preferences or animosities but by companies' well-calculated investment decisions."

Participants at the forum therefore are pledging to make further improvements to the stability, transparency and predictability of the legal and tax framework. They also say they will make it easier for entrepreneurs to launch businesses by removing bureaucratic obstacles.

But Zdenek Vorlicek, the Czech deputy minister of industry and trade, says emerging differences among the transitional countries could reduce the effectiveness of the Muenster group in the future.

Vorlicek says the progress of these transitional countries varies greatly. He says some, such as his country, are already seeking accelerated membership in the European Union, while others are still coping with solving basic internal problems:

"For a number of transforming countries, the present priorities are represented by the privatization process, the structuring of industry, the reform of the banking systems and so on. Another group seeks its accelerated membership in the European Union structures. The transformation process of some other countries is often encumbered by the solving of internal, social, or other problems."

Restricting his comments to Russia, the conference's host, Russian Prime Minister Mikhail Kasyanov, says his government has made creating a favorable investment climate and protecting property high priorities. Kasyanov says Russia's political stability and a new tax code are positive steps. But he admits Russian banks still lack transparency and that makes it difficult for investors to trust them.