In a sign of Bonn's growing commitment to investment in Russia, Mayor Yury Luzhkov laid the first stone Monday of what will become a major information center for German and Russian businesses.


"The German economy has a stake in the success of the reform process in Russia," Hans Peter Stihl, president of the German Association of Chambers of Commerce, told a news conference. "Today's ceremony ... is a step forward in the process."


The House of the German Economy, which was blessed during Monday's ceremony by an Orthodox bishop, will provide commercial information to German companies wishing to invest in Russia, as well as Russian firms looking to do business with Germany, Stihl said.


Located in central Moscow near the Tretyakov Gallery, the building is scheduled for completion by mid 1996 and will be built by the Austrian firm Maculan International with financing from Berliner Bank AG. Two office buildings, with 4,800 square meters of floor space, will also be built adjacent to the House of the German Economy, a press release said.


Germany is Russia's largest trading partner, with exports to the former Soviet state growing by 2.3 percent in the first three quarters of 1994 compared with the same period in 1993, Stihl said. Imports from Russia to Germany increased by 19.1 percent over the same period.


German companies also comprise the single biggest group in Moscow's foreign business community, with more then 800 firms' represented in the city.


German investment in Russia grew to a total of 110 million Deutsche marks ($84.6 million) in the first nine months of 1994 from just 9 million Deutsche marks in 1992, Stihl said.


But he identified several obstacles to greater foreign investment in Russia, singling out Russia's opaque and ever-changing legal system plus political instability.


"Many very promising projects have been doomed to failure because of this," Stihl said.


Nevertheless, he said, Russia's relatively cheap and well-educated workforce plus the country's geographical proximity to Germany continued to make the country attractive for German investors.


In particular, he said, German entrepreneurs are very interested in the areas of engineering, energy, textiles and consumer-goods production.


"The basis for expanding our activities is the suggestion that Russia promises to become a region of dynamic development," Stihl said. "The decision of whether you settle here or not is to be taken today."