FROM THE OFFICE OF PUBLIC AFFAIRS

I have come to Russia to help advance the economic side of our strategic relations as part of the preparation for the Summit in Moscow next month. A central aim of our work on economic issues is strengthening the environment for private investment in Russia and building investment and trade ties between our two countries.

I have met with government officials, the new central bank governor, Duma members, investors, small businesses, students, teachers, and bankers. My particular focus on this trip has been the objective of expanding access to capital to a much broader range of Russian people and businesses, especially small businesses. In particular, Russia needs a vigorous, sound banking sector that turns its savings into investment and jobs. That is a goal both President Bush and President Putin set for us at the Summit in Crawford, Texas. And it is a critical goal for raising living standards all over this country.

From my discussions, including with Chairman Ignatiev, I sense that this goal has become a real focus of reform. The people I met with want a banking system that people can trust and that lends according to sound business principles. They also want a banking sector that is largely private and competitive, the key to providing good service to depositors, borrowers and the economy as a whole. In the context of these discussions we also consulted in our shared interest in drying up the sources of terrorist finance. Both Chairman Ignatiev and First Deputy Finance Minister Zubcov are committed to this effort.

I had instructive discussions with representatives of the EBRD Russia Small Business Fund, the most successful lenders to small businesses in the country. To date, the RSBF has made 79,000 loans in 27 regions across this country. The United States strongly supports this fund and has just pledged additional financing to it so that it can maintain its rapid expansion.

Among my most important meetings were those with the private sector leaders of the U.S.-Russia Banking Dialogue. This dialogue was launched at the urging of the two Presidents at Crawford. Its work is driven and shaped by the private sector participants. They have produced a draft report of specific, concrete reform recommendations that build on and extend the government's banking reform strategy.

The report includes particular recommendations on facilitating lending to small business. As bankers and as business people that need banks, their advice is authoritative. The report is a valuable and timely document. I expect it will be made public and highlighted at the time of the Summit next month.

The Banking Dialogue represents exactly the kind of cooperative, results-oriented, and private sector-focused effort that both President Bush and President Putin want to form the basis of the new unique and growing relationship between our two countries.