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U.S. Ambassador James Collins expressed cautious optimism about business in the Far East and Russia as a whole during a visit to Vladivostok and Sakhalin March 17-21.

But Collins, who was returning from a top-level Russian-American meeting in San Jose, California, said a successful market economy requires a stable political climate.

In response to questions at a March 19 press conference at the Vladivostok Airport, Collins said, “If Primorye wants to attract investors from world markets, they should indeed compete with other ports and correct these political problems.

“Some of the problems are the result of local politics. Some of the problems are from Moscow. But nevertheless, the problems exist and should be dealt with.”

Collins did not elaborate, but many observers say the Far East’s reputation for instability has deterred foreign investors in recent years.

Collins visited the Far East on his way to Moscow from San Jose, California, where the Gore-Chernomyrdin Ad-Hoc Working Group recently met. During his visit, he met with krai and city officials, spoke with Pacific Fleet commanders, and met with members of the Vladivostok International Business Association. Collins said his visit to Vladivostok and to Sakhalin Island was to get acquainted with the Far East, and to support development of the region.

Russia’s recent acceptance in the Asian Pacific Economic Community was a major step for Russian integration in the region’s economy, Collins said.

Developing direct trade relations across the Pacific remains a priority for the U.S. government, Collins added. The ambassador said that “there is a natural marriage, a natural synergy between the U.S. West Coast, Alaska, and the Russian Far East.”

Three main issues need to be resolved on the national level to create a more secure business environment nationwide, Collins said. Russia must pass a comprehensive tax code, make progress in adopting land reform laws, and gain admission to the World Trade Organization. On this last issue, Collins said he was optimistic that Russia would be accepted this year.

The fact that it is an off-election year in Russian politics would most likely further the passage of laws to benefit business and trade in the country, he said.

In an earlier meeting, Gov. Yevgeny Nazdratenko told Collins that three main issues discourage new foreign investment in the area: unnecessarily long customs clearance, high transport tariffs for ports and railroads, and the “dangerous, criminal activities along many of Primorye’s trade routes.”

Nazdratenko said most cargo shipped from the U.S. West Coast to Chinese consumers travels a longer route via southern Chinese ports, rather than by way of Primorsky ports.

In a separate meeting, Vladivostok Mayor Victor Cherepkov offered Collins an optimistic economic picture, saying, “God himself told us” of the city’s and region’s potential.