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31 Oct, 2008 10:28

Interview with Andrew Sommers

U.S. companies see Russian assets as opportunities, after the market slump. That's according to Andrew Sommers, President of the American Chamber of Commerce.

Speaking to Business Todays Natasha Shanetskaya, Sommers maintained that American companies continue to be very interested in Russia, but that the problems stemming from the global credit crisis are impacting on Russian operations.

AS: I’ve heard of no one who has written off the Russian market or feels that the Russian market is somehow a different animal.  But the situation is different right now. Its true all around the world and there’s an amount of uncertainty, and when there’s uncertainty people tend to hesitate.

RT: Is there an indication that the U.S. companies operating in Russia are experiencing difficulties because of the effect the current crisis is having on the Russian market?

AS: Because of the difficulty of access to credit, not by these companies, but by their Russian distributors, their Russian retailers, the Russian companies who purchase equipment and resell them to the Russian consumer, those companies, and they are substantial companies, are having trouble getting credit.  Either the interest rates are higher now, or they can’t get as much credit as they wanted. The result has been that a number of companies are selling less goods in volume to the distributors because the distributors can’t get enough credit to purchase the original amount that they would have bought. 

RT: Many argue that the current crisis doesn’t have the far reaching consequences that many say it does. Do you agree with that?

AS: I tend to agree with it. I think that the analysis of the so called crisis in the States has over emphasized the role of banks because it was the investment banks – a certain type of bank – that is viewed as being he ones which kind of went too far.  There has been an impact on credit though, but probably not as severe, if this study, I am sure this study is done professionally the impact on credit has been less. But, at the same time, the consumers in the States are getting much more conservative, and maybe that’s somewhat of a good thing, even though it slows growth down, because Americans don’t save.

RT: Do you expect the U.S. sanctions against the Russian state owned arms trader, Rosoboronexport, to hurt the two countries bilateral ties?

A.S.: The damper on the business relations.  If you look at these regulations they are pointed only at U.S. Government agencies. It doesn’t forbid U.S. companies from dealing with Rosoboronexport.  But, companies get nervous when they see this, so that they kind of hold off.  So I think you will have a temporary decline in the business of several, what I would call strategic, American companies, with Rosoboronexport.