The Helsinki Summit emphasized creation of conditions to promote direct investment in Russia, but the commercial environment still poses serious problems. President Yeltsin's call two days ago for influxes of investment is welcome and farsighted. Russia has made significant progress toward economic liberalization and stabilization. The next challenge is to unleash sustained growth. For this, President Yeltsin's emphasis on deep structural reforms sounds just right.
Investors see tax reform as one vital step.
The government's draft tax code is a step in the right direction to reduce the number of taxes and excessive tax rates, and to simplify and strengthen tax administration. Good production sharing legislation could stimulate billions of dollars in energy investment and lead to much higher Russian exports of energy. At Helsinki, President Yeltsin undertook to seek Duma approval of the bilateral investment treaty. Its entry into force would be a very positive signal. New legislation could open more of the economy to foreign investment.