US Warns Russia Over Investor Risk

The US vice-president has warned Russia it risks scaring away investors unless it moves to strengthen the rule of law and introduce political reforms.

Vice President Joe Biden
Mandel Ngan | Getty Images
Vice President Joe Biden

“Nations need to follow a certain set of rules and those rules get your system straight, don’t make it a gamble [to do business] and have certainty,” Joe Biden told an audience at Moscow State University on Thursday.

The speech crowned a two-day visit by Mr Biden to Moscow aimed at cementing the “reset” in their relations and boosting trade and investment.

“The reset is working, working for all of us, working for Russia, and I would presumptuously say working for the world,” he said.

Mr Biden, who in the past has been critical of the Kremlin, praised Dmitry Medvedev on Wednesday, commending the Russian president’s efforts to strengthen ties with the US and promote a high-technology hub outside Moscow to stimulate economic modernisation.

The tone was more restrained at talks on Thursday with Vladimir Putin, where the Russian prime minister called for an end to “outdated stereotypes” and urged an end to visa restrictions.

“We would turn a very important page and everything would start over. This would create a new moral atmosphere,” he said.

Mr Biden’s talks with Putin were wedged between meetings with human rights groups and opposition leaders, signalling that the US would not tolerate curtailment of freedoms.

In his speech, Mr Biden raised concerns about the rule of law, citing the case of Mikhail Khodorkovsky, the jailed oil tycoon.

Mr Biden pledged US support for Russia’s bid to join the World Trade Organization by the end of the year and the abolition of the Soviet era Jackson Vanik amendment that denies Russia favoured nation status and is seen as an impediment to trade.

US efforts to boost investment in the non-oil sector moved forward this week as Boeing won a $2 billion order for passenger aircraft from Aeroflot, Russia’s flagship airline, and John Deere, the agricultural machinery maker announced it would double the size of its assembly plant outside Moscow.

Russia and the US agreed a nuclear arms reduction pact last year seen as the main achievement in a drive to improve relations that sank to a post Cold War low after the war in Georgia in 2008.

Having ratified the new Strategic Arms Reduction Treaty, the two sides have pledged to focus on improving economic ties.

Mr Biden’s visit to Moscow is expected to set the tone for US Russian relations as the two countries approach presidential elections next year.