[Congressional Record Volume 140, Number 127 (Tuesday, September 13, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 13, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          ST. PETERSBURG COMMISSION: BOLD BUSINESS LEADERSHIP

  Mr. LUGAR. Mr. President, I want to draw the attention of the Senate 
to a bold and creative project aimed at assisting the internal reform 
process in Russia. The project is called the International Action 
Commission for St. Petersburg and is sponsored by the Center for 
Strategic and International Studies [CSIS], a respected public policy 
research institute in Washington, DC. It provides an example of bold 
business leadership stepping out as a partner with government, and, in 
many ways, stepping ahead of government, to assist in crucial reform 
taking place in Russia. In this case, business leaders are contributing 
to the groundswell of activity in St. Petersburg and the surrounding 
oblast that is producing remarkable results in the evolution to a 
democratic government and a market economy underway in this strategic 
region of Russia.
  Complementing their basic business operations in Russia and the 
region, business leaders in the commission have undertaken numerous 
actions and entered into various partnerships that provide mutual 
benefits to them and to St. Petersburg's growth. The commission's 
actions support an arbitration court nearly formed, an international 
school in operation, and 21 projects ready for investment in areas 
ranging from improvements to the heating and hot water system to 
training for the emerging commercial banks. Commission members have 
participated in over 12 joint ventures and are associated with $40 
million in new investments which have been made or obligated. They also 
continue to advise the city and key business leaders on what key steps 
remain to enhance the region's attractiveness to foreign investors. 
These steps are leading to grass-roots Russian business know-how and 
innovation, and to permanent structures at the local level that are 
necessary for a stable market economy and investment growth.
  The teamwork between Russia, the United States and our allies 
reflects the best of our intentions for programs sponsored by the 
United States Government and the role United States businesses should 
play globally. Mr. President, I highly commend CSIS and its president, 
Ambassador David Abshire, for this important initiative and I ask that 
some descriptive material about the commission's work be inserted in 
the Congressional Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[From the Center for Strategic & International Studies, Washington, DC, 
                             July 11, 1994]

           International Action Commission for St. Petersburg


 examples of business growth in northwest Russia involving commission 
                                members

       Selection of Russian sub-contractors and training of 
     Russian sales force by the Procter & Gamble Company:
       Formation of Joint Ventures: Pratt & Whitney--Klimov, 
     Comspan--Businesslink, Booz Allen--Baltic Technical Park, 
     Booz Allen--Leninets.
       Rapid development of Gillette-Leninets joint venture.
       Start-up of joint ventures with non-commission partners: 
     Kirov--Caterpillar, Signal--International American Products 
     Incorporated, St. Petersburg Clothing Exchange--Amerex.
       Leninets award from U.S. Department of Defense of up to $5 
     million start-up funding for a U.S. joint venture to produce 
     commercial products (July 1994).
       22 St. Petersburg companies positioned for further U.S. 
     Department of Defense grants for defense conversion joint 
     ventures.
       World Bank, EBRD, Finnish and U.S. government investment 
     interest has been focused on: Priority infrastructure 
     projects of the city; Opening of wholesale terminal market 
     for agriculture products; Energy production and conservation 
     projects--meetings held in Moscow and St. Petersburg; Port 
     Modernization.
       Joint business team working on key growth areas: Port 
     Modernization: Port of Maryland, Booz Allen, Finnlines, St. 
     Petersburg Seaport. Energy: Honeywell, Ahlstrom, Metra, 
     Imatra Voyma Oy, Lentek, Lenenergo Agribusiness: State of 
     Maryland, Leningrad Oblast.
       Cooperative agreements have been signed: By ICN 
     Pharmaceuticals to modernize and expand a pharmaceutical 
     enterprise and plant in St. Petersburg. Investment will be 
     $40 million and involves a joint venture relationship. By a 
     U.S.-led consortium of U.S. and Russian companies to develop 
     the central historical district of the city. Between a team 
     of the University of Texas and Texas A&M with the St. 
     Petersburg Technical University to develop a business 
     school--$295,000 awarded by USIA.
       RJR Nabisco has provided $1.2 million for business 
     education programs conducted by Duke University and St. 
     Petersburg State University.
                                  ____


           International Action Commission for St. Petersburg


                    existing actions progress report

       The 40-minute television presentation aired on St. 
     Petersburg television in late May, informing the people of 
     St. Petersburg and the region on the benefits of foreign 
     investment and creating a positive image of the private 
     enterprise system. A follow-on business news program is 
     proposed.
       The Investment and Development Agency of St. Petersburg is 
     being organized for the first two priority development zones 
     of the city. The Agency will assist businesses and investors 
     to search out, organize and facilitate business start-ups and 
     new investments. The public relations firm Edelman has 
     prepared a proposal to publicize these zones as the focus 
     point for investment in St. Petersburg. The St. Petersburg 
     Regeneration Agency has identified funding for market and 
     growth assessments for the central historic district of the 
     city.
       Plans for an international arbitration court are nearing 
     completion; the court will be registered in the coming month, 
     and will begin operations by this fall.
       Steps are being taken to educate St. Petersburg businesses 
     on the Russian-American Enterprise Fund. RAEF president 
     Gerald Corrigan will describe the fund's operations in detail 
     at a city conference on small and medium-sized business on 
     June 22, 1994. The city previously conducted a highly 
     successful international conference on foreign investment 
     opportunities for Northwest Russia on November 10-12. City 
     officials participated in an investment forum in New York 
     City in April, 1994 jointly sponsored by our commission, the 
     Citizens Exchange Network and American Express.
       The commission has assumed a major role in assisting the 
     development of U.S.-Russia exchange programs to bring Russian 
     business persons and other professionals to the U.S. for work 
     experience. Exchange visits began last month to 10 cities. 
     This pilot effort includes 300 Russians from St. Petersburg 
     and three other regions of Russia.
       A list of priority projects needed in St. Petersburg was 
     developed and published by the city to attract investor 
     attention. A further prioritization of these projects is 
     under way to propose to world financing organizations, 
     including the EBRD and the World Bank, for funding.
       An international school and medical center opened in St. 
     Petersburg last fall. Additional funding is still needed for 
     the international school.
       A standing Russian-Western defense industry diversification 
     committee has worked with the U.S. government to ensure 
     equitable consideration of St. Petersburg defense businesses 
     for grants of up to $5 million each to support joint ventures 
     of Russian defense firms with U.S. and other partners for 
     defense diversification. Commission-member Leninets was one 
     of four Russian companies initially selected for this 
     program. 22 other St. Petersburg companies have been 
     identified for the next phase of this program.
       Work continues to identify funding sources for a 
     feasibility study for a technopark in the St. Petersburg 
     region; and to attract investors for projects for improved 
     local telecommunications network capacity.
       Establishing a system of guarantees remains a priority 
     concern for the commission in the coming months.
       The consortium of 24 St. Petersburg and international 
     universities will meet in St. Petersburg on June 9 and 10, 
     and will continue work on actions promoting international 
     cooperation in higher education to assist business growth in 
     St. Petersburg city and region. The first meeting of the 
     consortium occurred in November 1993.
       The four new commission working groups which were organized 
     last fall have met regularly beginning in October. This work 
     has led to 20 possible new actions, and the most promising of 
     these actions will be proposed at our plenary session 
     business meeting on June 11, 1994. Action papers on each 
     action will be provided to all commissioners before the 
     plenary session. Focus areas for these groups are: 
     Improvements to Strengthen Banking and Investment Practices, 
     Energy Conservation and Management, More Rapid Modernization 
     and Growth of Agribusiness, Modernization and Development of 
     the St. Petersburg Port Area.
       The U.S. government sponsor for the commission, the United 
     States Agency for International Development, has indicated 
     its intention to provide funding to continue the commission 
     until August 1995. This spokesperson stated that their goal 
     is to commit funding to the completion of our most urgent and 
     promising projects. This situation is not yet final; however, 
     as an initial indicator, it is indeed good news.

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