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Past Issue
November/December 2006

Welcome to USRCCNE!
from Josh Wilson, USRCCNE Editor

 

This month has been an important one for those whose business bridges Russia and the US. For better or for worse, change is coming that affects international trade.

 

Russia is now set to become a member of the WTO. According to AmCham Russia President Andrew Somers, speaking at a breakfast meeting on November 21st, the completion of bilateral trade talks between Russia and the US assures Russia's ascension, even without the repeal of the Jackson-Vanik Amendment. However, if Congress does not approve the process and chooses not to repeal the 1974 amendment and grant Russia Permanent Normal Trade Relations (PNTR), the US will be prevented from enjoying the benefits of belonging to WTO with Russia, which could negatively affect US iRussia's rocky road to the WTOndustries ranging from technology to poultry. Thus, the way forward for Russia is promising, but the way forward for US-Russian economic and political relations is still largely uncharted and faces the further wild card of Washington's newly elected leadership.

 

We've compiled the latest information on the WTO and the bilateral trade talks here for our members and readers. Of course, this is in addition to more information on Russian markets, USRCCNE member businesses and more! Share this issue with friends and colleagues if you enjoy it and consider joining the chamber if you haven't already.

News: Upcoming Events
Thirty business executives from Gazprom will meet for a roundtable discussion with business and policy leaders from the international energy and financial markets as well as faculty, students and business persons from the Boston area at Burden Auditorium, Harvard Business School on November 28, 2006 at 5:00pm. Go to GazpromTour.com for information more information or download this brochure.

The MA Friends of Pskov, an organization dedicated to improving commercial and cultural ties between the state of Massachusetts and the region of Pskov, Russia, will hold their annual fundraiser on November 29, 2006 at 5:00pm at the Union Club, Boston, MA. For more information, click here and see the interview with Senator Rosenberg below.  

Featured Market: Medical Technology in Russia

Export.gov offers extensive services for those hoping to export products or services to Russia including a trade lead database and market research database. These can be accessed by creating a free account with the service. The following reports on the medical technology market in Russia have been taken from that database and are here made available without an account. The quotes below them have been extracted from the reports.

  • Overview of the Market
    Medical Exports to Russia(NOTE: This report dates from 2004, but remains largely accurate.)
    A significant portion of the medical equipment and devices used in public clinics and hospitals is worn and needs replacement. Russia still does not produce many types of high-end medical equipment and relies on imports of such equipment. Opportunities in the market are vast, however financing is scarce and insufficient. Total public healthcare spending in Russia at all levels comprises only 3.7 percent of the GNP. In the last three years the Russian medical equipment and devices market has shown substantial and steady growth with annual rates exceeding 10 percent. The total volume of the market in 2003 is estimated at 1.4 billion dollars. Imports play a significant role accounting for about 75 percent of the total market. 
  • Registration of Medical Equipment in Russia
    Despite positive changes in the last several years, the registration procedure for medical equipment in Russia still lacks clarity and transparency. Russia still relies on product testing as a key element of the medical product approval process. Other types of product safety assurance, such as plant auditing, quality systems, and post market vigilance, started to develop only recently, after the adoption of the Federal Law of the Russian Federation on Technical Regulation of July 1, 2002. Russia adheres to redundant practices of further testing of FDA-approved and CE-marked medical equipment and devices which delays entry of advanced medical technologies into the country.

  • Zero Import Taxes for Equipment Approved by the Russian Government
    The report lists all 4-digit HSC of groups of equipment that were exempted from the import tax by the Russian Government for a period of nine months with a possible further extension.

  • Medical Reform in Russia
    Though the promise of free healthcare for all citizens is stipulated in Article 41 of Russia's Constitution, the country is only now seeking ways to make the goal of insured adequate medical care feasible. Chronic problems throughout Russia's current healthcare system will undoubtedly mean that this process will occur slowly... (With) mortality rates and other medical indicators reaching alarming levels, the government announced a series of sweeping reforms on January 1, 2005... These reforms and the promise for significant increases in federal spending will offer longer-term opportunities for advanced U.S. medical equipment and services.

  • Country Commericial Guide for Russia
    There are strong growth possibilities in a range of consumer goods and services, which are being fueled by increases in disposable income in Moscow, St. Petersburg and the growing regional centers: - telecommunications equipment and services, especially wireless - autos and parts - computer hardware and software... - medical equipment - (and) pharmaceuticals.

Pskov Kremlin - the heart of PskovFeatured Member: Stan Rosenberg and MA Friends of Pskov
The Friends of Pskov is a group of business and government leaders from Massachusetts that have worked for more than a decade to improve the economy of Pskov and to better develop business ties between the two regions. As Senator Stan Rosenberg, a member of the MA Friends of Pskov, told USRCCNE recently, the project has seen considerable success. Read more in the interview here.

Legislation and Society: Implementation of the New NGO Law
Much has been written about Russia's new NGO law, which caused many NGOs to temporarily suspend their programs. However, The School of Russian and Asian Studies (SRAS) found that the majority of the articles either made sweeping generalizations of the law as "undemocratic" or sweeping justifications for it. So, SRAS commissioned Audrey Wood, a freelance journalist and translator in Moscow to research and write the following report, objectively analyzing the complex legal and organizational issues at play. Note: Since this report was originally published 11/1/06, most NGOs are now registered - including Human Rights Watch and Amnesty International. 

Healthy Translations: Language Connectons Builds Medical Industry Focus
A medical company's reputation and performance can be severely compromised by inferior translation. Unqualified linguists take longer with translations: inconsistencies can arise, necessitating burdensome reviews and edits, that make the project cost more and take longer than necessary. Read more from Language Connections.

IT Outsourcing: The Russian Specialist Market Grows
Auriga's recent study aimed at showing Russian IT labor market potential revealed that numerically, the Russian labor force for IT specialists is growing at a pace on par with India.  However, when this growth is compared to the current size of the market, Russia is actually growing much faster. Read more from Auriga.

  • Also of interest to the IT market is this report from ITAR-TASS which details how bureaucracy and other problems are hampering the development of Internet infastructure in Russia's more rural areas.

StarSoft Advances Scrum and Agile Development
StarSoft Development Labs is a pioneer in Agile Development in distributed environments, having introduced Agile services as early as 2002. Earlier this year, Jeff Sutherland, Ph.D. and co-creator of the Scrum Agile development process, declared the project between StarSoft St. Petersburg and its client SirsiDynix of Provo, Utah to be the world's most productive large outsourced Java project documented to date. Read more from StarSoft. Read more from StarSoft.

St. Petersburg, RussiaSt. Petersburg: Promising Markets
With its population of 4.8 million people, St. Petersburg is a lucrative gateway into the densely-populated North-Western district and, beyond, to 145 million consumers throughout Russia. In 2005, consumer spending grew over 20% and goods manufactured in St. Petersburg are also often exported to Eastern European markets. Read more in this Market Proposition and this guide to the Investment Climate in St. Petersburg. Both items were contributed to the USRCCNE newsletter by Veronika Krasheninnikova, Representative of the City of Saint Petersburg (Russia) in the United States.

Russian Corner: HR as Risk Management
Most day-to-day, common business risks come from "the human factor;" the fact that we and our employees are human and thus liable to make mistakes - mistakes that can cost our companies money. Performance management is a tool that can turn these risks into assets. Find out how from Alinga Consulting Group.

Just for Fun: Soup po Ruskii
Soups are usually given for the first course of a Russian meal and depending on the season, they may be served hot or cold. Three traditional soups that every person curious about Russia should try are borsch (áîðù), okroshka (îêðîøêà), and solyanka (ñîëÿíêà). Find out more about these soups and how to make them yourself in this new article from The School of Russian and Asian Studies.

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