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INVESTING IN RUSSIA: ADVICE FROM ERNST MUEHLEMANN

Largeur.com, Business mir #2 - 2006-08 MAIL PRINT 
A former parliamentarian and brigadier in the Swiss army, Ernst Mühlemann is also an expert on Russia. He was rapporteur for the Council of Europe’s parliamentary Assembly for Russian membership and currently occupies the positions of vice-president of the Switzerland-Russia Co-operation Council, vice-president of the East-West Forum and treasurer of the Green Cross, an organisation founded and presided over by Mikhail Gorbachev.
Where did this fascination with Russia come from?
During the cold war, I was commander of the 7th border brigade on the banks of Lake Constance. We were awaiting the Russians. In 1981, I made my first visit to Moscow, where I met Mikhail Gorbachev. He confided in me that the Russians would not invade Poland and explained his vision for improving relations between Russia and theWest. He persuaded me that the cold war was completely useless. I really caught the « Russian virus » later on, while I was in the region of Novgorod (not to be confused with Nizhny Novgorod), where I was taken with the kindness of the people and the beauty of the scenery.
How have you seen relations between Switzerland and Russia evolve in the last 25 years?
In recent years Switzerland has committed enormous errors and the Russians haven’t forgotten that.
Switzerland therefore needs to strengthen its ties with Russia. That being said, Switzerland has a very good card to play regarding the political problems which oppose Russia and the European Union. As both a neutral country and a non-member of the European Union, Switzerland could mediate between Moscow and Brussels in order to avoid a new cold war on the Schengen East border.
Should we fear a new cold war?
Gennadi Zyuganov, the leader of the Russian Federation’s communist party, recently told me that the political situation between Russia and the European Union was approaching another cold war, because Russia cannot accept Ukraine becoming a member of NATO, anymore than it can accept the presence of German tanks in Kursk (editor’s note : a fierce battle between the Germans and the Russians took place in this town in 1943, a battle which ended with the Germans’ defeat and more than 100’000 dead, threequarters of which were Russian). Having myself been chief rapporteur for Russian membership in the Council of Europe (editor’s note : Russia joined the Council on February 28th 1996), I share the same view of things asWinston Churchill : «We must invite Russia to the table and not leave them out in the kitchen, or they will take it upon themselves to put some salt in the soup! ». We must therefore be very prudent in order to calm everyone’s nerves, and tell the Europeans to leave their tanks at home!
Do Russia and Switzerland collaborate sufficiently?
I would say that at the moment, the two countries do not collaborate enough. This depends on the Foreign Affairs minister. The former federal councilman Flavio Cotti did an excellent job in this respect, and was very much liked in Russia. Erwin Hofer, Switzerland’s ambassador in Moscow, is also doing an excellent job, but he has an enormous task before him and therefore needs support. Switzerland should also increase its humanitarian aid towards Russia.
Does Switzerland encourage trade with Russia?
The problemisn’t insufficient encouragement, butmisinformation.
The media present a very negative image of Russia and therefore the Swiss are logically very wary of entering the Russian market. The solution would be to present investors who have known success in Russia; and there are many of them.
What is Russia’s economic potential?
80 of the 90 natural elements in the periodic table can be found in Russian land. Russia possesses enormous natural resources, especially where energy is concerned.
Russians are very intelligent; they have a flair for technological evolution. Even if they have yet to build enormous factories, they will succeed in influencing Western Europe. This is why co-operation is so important. I can never repeat this saying of Gorbachev’s too many times: «Co-operation is better than confrontation».
What are the most lucrative sectors of the Russian economy?
They’re very diverse. A Swiss businessman built a fish factory on the banks of Lake Ladoga and exports to Switzerland with great success. Another Swiss introduced automatic garage doors in Russia. His project was very well received. The market for high-tech products is also very significant. It could be very profitable for the Swiss to develop their products in Russia.
However, the Swissmust be careful not to have too narrow of a relationship with Russia. It would be bad for Switzerland to content itself with bringing in funds and letting Russia provide all the intelligence.
What advice would you give to a Swiss businessman wishing to enter the Russian market?
It’s necessary to collect information on-site, accompanied by someone trusted and who knows the country well, whether they are Swiss or Russian. One must also find a politically stable district. Novgorod for instance is very well suited for entrepreneurs fromWestern Europe.
Why was the Switzerland-Russia Co-operation Council created?
Switzerland and Russia have always had very strong ties, especially in the 19th century. Numerous architects from Tessin contributed to the grandeur of St- Petersburg, whereas Antoine-Henri de Jomini was Alexandre I’s military advisor and also advisor to Alexandre II. But from the end of the Second World War, a period of difficult relations between the two countries began. These difficulties are in large part due to the media, who paint a very unfavourable picture of Russia. They obscure the fact that Russia is slowly heading towards democracy, the private economy and a general openness. One can easily forget that Vladimir Putin has given his country a degree of political stability. It’s for this reason that the Switzerland-Russia Co-operation Council was created a year ago, with the aim of finding peoplewho can build bridges betweenMoscowand Bern.
What are the activities of the Co-operation Council which are linked to the economy?
We help the worlds of the Russian and Swiss economies come together. In October 2005, we organised a meeting in Bern between the head of the Swiss Department of Economy Joseph Deiss and the president of the Russian Chamber of Commerce and Industry Evgeny Primakov. At the end of May 2006, a Swiss delegation made up of important political and economic personalities came to Moscow, where they participated in various round-tables with Russian political personalities, including members of the federation council and the Duma. During this meeting, the Co-operation Council attributed a prize to five journalists (three Russian and two Swiss) for publications which served to deepen relations between the two countries. This award also aims to intensify and improve mutual media coverage in both countries.
Can you tell us about the measures put in place to encourage trade between the two countries?
Our Swiss specialists residing in Russia serve to «open the door » of the Russian market for Swiss businessmen who wish to enter. Indeed, it’s difficult and even dangerous to try to do it without consulting with someone who knows how things work. Like the city of New York, Russia is both heaven and hell. Certain regions are veritable eldorados, whereas others are less favoured.
Largeur.com, Business mir #2 - 2006-08  MAIL PRINT 
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Ежедневные новости и аналитика из Швейцарии и Европы, политика, экономика, интервью

Daily news and analytics from Switzerland and Europe, policy, economy, interview