President’s Report

January 9, 2004

Dear Friends and Colleagues of CCI,

Bolshoye Spacebo to you, our priceless volunteers, for your extraordinary work during 2003! You were the spirit, voice and energy for CCI across the U.S., linking American business know-how with Russian ingenuity. Delegation after delegation of Russia's entrepreneurs, with your help, figured out how to adapt U.S. expertise to their Russian enterprises. We can't thank you enough for your participation this past year!

For newcomers to our website, we welcome you to the world of CCI and hope you will join our exciting work this year.

CCI is starting 2004 with a bang! During the next twelve months, PEP plans to train 800 Russian regional entrepreneurs in American firms - the largest number ever. In March CCI's Next Steps program will bring 100 key CCI Russian alumni to Washington, D.C. They will study the world's experience in corruption reduction and take the best of western experience back to Russia for implementation. Mid-year 2004 we will initiate a new association entitled, The Russia Society, which is designed to provide fair and balanced coverage of economic and political news from Russia. The goal: to offset increasingly sensationalized, one-sided journalism regarding Russia's continuing transition to democracy. Also by mid-year we will add two new orphanages to CCI's Angels for Angels program. If there's any spare time remaining in 2004, we will create the first stages of CCI's new travel program, The Russian-American Journey. It will organize "travel-with-a-mission" trips for Americans who wish to go to Russia to investigate business, professional or cultural opportunities. Wish us well as we have a full plate!

Russia is starting off 2004 on good footing. Russia's GDP for 2003 stands at around 7 percent (one of the highest in the world); capital flight has been substantially reduced to $2.9 billion in 2003 (after $15 billion in 2001 and $8 billion in 2002); and 50 percent of Russia's population is now earning their living from private-sector business jobs. Relative stability and order, the precursors to economic growth, are now within sight, barring unexpected calamities.

Russia's endemic culture of corruption must be tackled next. Much of this culture has its roots in the Soviet era, when formal and "informal" economies were intertwined. These complicated practices and ties of the former era, carried forward into the new business world, distort market values, negate competition, skew tenders unfairly and impact every level of business interaction. Unofficial pay-offs of all types and sizes have become informally institutionalized in all of Russia's regions. President Putin is beginning to take a strong hand in the corruption sphere. On November 24, 2003, he issued a new decree to do battle with public corruption in Russia. For those interested, you can find a translation of the decree, Regarding the Council of the President of the Russian Federation to Fight Corruption, on our website.

CCI's Next Steps mega-project on corruption reduction seems propitiously timed. As reported earlier, March 20-28, 2004, CCI will provide immersion training in corruption reduction for 100 CCI Russian alumni in Washington, D.C. Embassies, U.S. Departments of Justice, Treasury, Commerce and State, policy institutions, NGOs, and Congress members will give them seminars and training sessions on the world's experience in reducing levels of corruption. This collective data will be taken back to Russia and put to use in Moscow and throughout the regions during 2004. You can find the details of the Next Step program activities on our website.

In my November 25, 2003 President's Report, I mentioned the preponderance of negative, sensational media attention on Russia due to the Putin-Khordorkovsky-Yukos showdown. I'm relieved to report that over the past three weeks, this tendency is changing. Articles consistent with the interpretations of Russia's entrepreneurs and the bulk of other Russian citizens are now appearing in major news media. Check out the January 2, 2004 New York Times article, Putin vs .the Jailed Tycoon: Defining Russia's New Rules, which is a fair representation of the motivations and events surrounding the incarceration of Russia's richest man by Russia's president. If you're interested, please also read my personal analysis of the December 7, 2003 Duma elections, Duma Election Analysis.

We at CCI wish you the best of all years in 2004 and look forward to our future interactions with you!

Sincerely,

Sharon Tennison
President