The growing presence of the French community in Moscow is reflected in its increased business activity and in the number of Club France members. But the challenging legal climate remains the greatest barrier to foreign investment and French-Russian economic relations, said Club France members at its third annual general meeting Tuesday.
Although French exports to Russia have not attained their pre-crisis levels, there has been marked improvement in comparison with the first six months following the crisis, said Patrick Berger, chief of the Economic and Financial Mission of the French Embassy.
Berger said that France's pre-crisis exports to Russia averaged 23 billion French francs ($3.3 billion). After the crisis, exports fell to approximately 500 million francs ($72.6 million), while figures for the past six months show an increase to 800 million francs.
French investments in Russia also show signs of rebirth. In 1996 and 1997, the flow of investments was slightly less than 400 million francs per year, and 1998 statistics show that they topped
1 billion francs, said Berger. He added that according to provisional statistics for the first nine months of 1999, French investments were 700 million francs.
Club France membership and activities reflect this upward trend. "Two years ago, we had 70 member companies. Last year there were 80 companies [and] 240 members. And this year there are 98 companies [and] 302 members," said Club France president Guy Mara .
The Paris-based Club France is a nonprofit independent association founded in May 1997. Its goal is to facilitate contacts among the French-speaking business community in Russia and to promote professional competence.
In 2001, the club plans to open an office in Moscow and to develop its local Internet web site and journal, said Club France treasurer, Emmanuel Quidet.
A major obstacle to smooth economic relations is Russia's vague and arbitrary legal system, said French businessmen at the meeting.
"There is a lack of clarity on the part of the Russian government regarding the protection of foreign investments. The protection of foreign investments in Russia is not guaranteed," said Philippe Pele Clamour, managing director of the BIC stationery and consumer goods company. He said this applies to all aspects of trade, from investors' rights to land prices.
Club France Secretaire Jean-Luc Pipon pointed out the complexity of registering businesses in Russia, which takes two and a half months compared to three days in France, he said. He also denounced the tax system, especially the road-use tax and the housing tax, which are 4 percent each in Russia and do not exist in France. "It's an anti-economic tax system," he said.
Jean de Reydet, director of Club France, said the club is a major player in the countries' bilateral relations.
French Ambassador Claude Blanchemaison said, "It is sometimes said that relations between France and Russia are going through a difficult phase. I don't think that there is a problem between the Russian authorities and the French authorities."
He added that France's upcoming presidency of the European Union will make clear for Russia that France is expressing the views of the European Union and Western Europe.