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In Silicon Valley, Medvedev Looks For Investment Possibilities


Russian President Dmitry Medvedev sends his first tweet as Twitter co-founders Biz Stone (center) and Evan Williams look on at Twitter headquarters in San Francisco.
Russian President Dmitry Medvedev has visited America's high-tech headquarters of Silicon Valley with an eye toward expanding Russian-U.S. business ties and diversifying his country's oil- and gas-dependent economy.

Medvedev met with industry leaders including Apple CEO Steve Jobs, Cisco Systems chief John Chambers, and top executives from the micro-blogging site Twitter.

Upon his arrival in California, the Russian president was met by Governor Arnold Schwarzenegger.

"It is really very interesting for me to start my U.S. visit in California, in San Francisco. I have never been here before. Although of course I have heard a lot," said Medvedev, standing alongside the action hero turned politician.

"California is one of the most economically developed states of the United States, which shapes its destiny," he added.

From Silicon Valley To Skolkovo

If all goes according to plan, the visit may also help to shape the future of Russia's economy.

Medvedev hopes to lure talent and investments eastward as part of his plan to modernize and diversify the Russian economy. The country was hit particularly hard during the recent economic recession when the price of oil, Russia's economic backbone, dropped sharply.
The Russian government hopes that Skolkovo, still under construction, will eventually rival Silicon Valley.

His government has since unveiled ambitious plans to develop an ultramodern technology hub in Skolkovo, some 20 kilometers west of central Moscow.

While the Kremlin has begun to pump large sums of money into the project, it has also recognized that private investment from abroad, along with the expertise and innovation that brings, is needed to build the Russian equivalent of Silicon Valley.

Before his trip, Medvedev said his visit "is not a guided tour."

"I hope that, as a result of this trip, we develop intense relations that in the future will lead to the establishment of powerful corporate ties," he said.

With U.S.-Russian relations riding high on the wave of a White House-led "reset," the time may be right for momentum to carry over into the economic sphere.

Skolkovo won its first foreign investment last month -- $250 million from a private U.S. equity group.

On June 23, Internet equipment giant Cisco systems said it will invest $1 billion in Russia over 10 years to help foster high-tech innovation. The company also plans to establish a physical presence in Skolkovo.

Signing a memorandum of understanding with Medvedev, Cisco CEO John Chambers said, “We’re very honored to commit to your dream."

Medvedev receives an iPhone 4 from Apple CEO Steve Jobs during his visit to Silicon Valley.
In a statement released at the signing, Medvedev said, “During the next decade Russia should become a country in which the welfare and the good quality of life is ensured by its intellectual rather than natural resources, its innovative economy."

But some analysts predict that other U.S. firms will remain hesitant to throw their full backing into Russian projects, as concerns about corruption and Russia's exclusion from the World Trade Organization (WTO) persist.

In the latest Global Competitiveness Report, Russia dropped 12 spots, to 63 out of 137. Transparency International's corruption index ranks Russia near the bottom.

During his California trip, Medvedev will not meet Google co-founder Sergey Brin, a prominent émigré entrepreneur and one of the many tech experts of Russian background in Silicon Valley.

In a 2002 interview, Brin called Russia "Nigeria with snow," in a reference to the country's less-than-transparent business climate.

The Russian president did pay a visit to the U.S. offices of Yandex, Google's Russian competitor.

On To Washington

At Twitter headquarters, Medvedev issued his first tweet from a newly opened account, @KremlinRussia (as well as an account in English, @KremlinRussia_E)

It read, in Russian, "Hello to everyone! I am now on Twitter and this is my first message." He quickly had thousands of followers.

Medvedev also gave a speech at Stanford University before departing for Washington, where he will meet with U.S. President Barack Obama.

"Russia is trying to become an open country," he said at Stanford. "Open for investment, for trade, for joint projects in any sector of public life, and of course in economics."

Economic cooperation, as well as Russia's WTO bid, is expected to feature in discussions between Obama and Medvedev.

Russia has accused the United States of stalling Russia's accession to the trade group, with U.S. officials pointing to insufficient Russian intellectual property legislation among their concerns.

After their meeting, Medvedev and Obama will fly to Toronto for the upcoming G-8 and G-20 summits of the world's major economies. Russia remains the only G-8 or G-20 country outside the WTO.

written by Richard Solash, with agency material
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