Foreign Investment Body Praised

Western executives reacted optimistically Friday to the creation of the Foreign Investment Council, a new advisory body designed to improve Russia's investment climate, saying it will foster understanding between foreign firms and the government.The government announced Thursday that Prime Minister Viktor Chernomyrdin will head the new council, which will bring together top Russian officials and executives from ABB, Mars, Procter & Gamble, Ernst & Young and 10 other major foreign firms with a presence in Russia.Thomas Fasbender, vice president for ABB Russia, a subsidiary of multinational industrial firm Asea Brown Boveri with more then 10 joint ventures here, said in an interview that the council will provide a forum in which foreign investors can air their political and legal worries and help Russian officials better understand their needs."The council is being set up not for window dressing activities," he said. "These people's time is too expensive."Fasbender said that the council could eventually become influential enough to affect actual government decisions on foreign investment. Western businessmen have often criticized Russia for inconsistent legislation that has undermined confidence and kept investment at a trickle."They've chosen businessmen with a pro-Russian attitude, representing companies with a strong tradition of economic relations with Russia," said Fasbender, adding that the executives' opinions would thus be taken seriously by top Russian officials.George Reese, managing partner at Ernst & Young in Moscow, was more cautious in his assessment, saying that many details of the council's activities were yet to be finalized.He stopped short of suggesting that foreign firms could directly influence the government."Influence is too strong a word," Reese said. "We're rather talking of giving Western investors' perspective to the government."Reese said that representatives of only 14 companies -- ABB, BASF, Citicorp, Coca-Cola, Ernst & Young, Fleisch KG, Gulf Canada, Mars, Mitsui, Mobil, The Pioneer Group, Procter & Gamble, Raytheon International and United Technologies -- will attend the first meeting of the council, scheduled to take place Sunday through Tuesday.But he added that proposals would be considered to expand the council as well as increase the frequency of meetings. Government officials said this week that the council will meet at least twice a year."Some executives expressed hopes that there be permanent working groups," Reese said.