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Russian-American Business

By Andrei Leonov

Russian-American relations have never been fluid. The Cold War, political differences, space exploration, nuclear research and the arms race have all contributed to a general animosity between the two nations. As a dual Russian American citizen, I have lived and worked in both countries. Due to my business experiences in Russia and the United States, I am inspired to further examine the political and economic effects of Russia’s continual rise to power and the struggle for the United States to maintain its status as the sole hegemon.

In the USSR, economic terms such as cost of production, return on investment, market capitalization had very faint and illusive meanings, as the national economy was run by a handful of partycrats with no business backgrounds. In stark contrast to its Soviet past, modern Russia is unconcerned with political ideologies and financial interests rule political debate. “In capital we trust” is the current motto of Russian politicians and their big business allies. “Russia Inc.” continues to flourish thanks to top Kremlin officials, sitting on boards of newly nationalized highly profitable industries. Turning off Ukrainian and European gas supplies, choosing partners for capital intensive joint ventures, walking away from executed contracts with multinational corporations, claiming billions of tons of hydrocarbons beneath the ice of the Arctic Ocean are all examples of politics determined by strictly business interests.

Clearly, soaring energy prices

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are far more important in Moscow than the nuclear warhead power play. Russian businesses are interested in gaining access to the U.S. market. As Gazprom, Rosatom, Russian Aluminium, Lukoil, and Rosneft become increasingly interested in expanding their presence in the United States, energy deals could give the U.S.-Russian relationship context and stability. However, the Jackson-Vanik Amendment has been an effective trade barrier since 1974. Ironically, the original purpose of the amendment is no longer relevant, yet repealing the legislation is still not considered a priority in Congress.

Delays with Russia’s acceptance in the WTO, pressing issues surrounding NATO membership for Ukraine, Georgia, and Azerbaijan, Russian nuclear supplies to Iran, deployment of the U.S. nuclear warheads in Europe, opposing interests in Venezuela all perpetuate the enmity and hostility which could ultimately lead to the new Cold War. Though Russian-American business interaction has been stagnant in the past decade, perhaps, the allowance of trade and capital flow between both countries would allow businesses to establish more solid foundations for political relations and disperse misconceptions and stereotypes of each nation’s economic interests.

As capitalism in Russia evolves, it becomes the role of the U.S. government to dismantle Soviet barriers and let private business do its job in preventing twenty-first century style Cold War.

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Index of other key articles

  • Russia Key Facts
    Russia Key Facts: Economy, Oil and gas, Military and Health issues
  • Russian Economic Survey
    The Russian Economic Survey is a comprehensive review of the Russian economy - month by month
  • U.S.-Russian Relationships
    The U.S.-Russia Economic Relationships in brief: investments, services, trade, opportunities and Jackson-Vanik
  • U.S.-Russian Trade
    U.S. exports to Russia, U.S. imports from Russia, trade balance and other stats
  • U.S.-Russia Trade Opportunities
    Bilateral trade between the U.S. and Russian Federation, market growth and business opportunities in Russia
  • Russia's Virtual Economy
    In-depth analysis of the virtual economy in Russia through the 1990s. Soviet nonmonetary exchange, nonmarket prices and the financial crisis of August 1998.

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