Russian President Vladimir Putin sought to reassure the US business elite on Saturday he was determined to turn Russia into a more investor- friendly country - but made no mention of the word "YUKOS". The Kremlin leader greeted top executives from US corporate giants including Citigroup, ConocoPhillips, Alcoa and IBM at the baroque Konstantinovsky Palace near St Petersburg, Putin's political stronghold.
The meeting, proposed by Citigroup Chairman Sandy Weill, will be followed by a similar forum with business leaders from Germany on Sunday.
"We will continue work to improve Russia's investment climate," Putin told them at the 18-century palace built by Peter the Great in opening remarks attended by reporters.
"I hope that in a few years time Russia will turn into a net importer of capital from a net exporter."
Putin's Kremlin has scared foreign investors by destroying one of the country's biggest oil firms, Yukos, in what analysts say was punishment for its jailed founder Mikhail Khodorkovsky's political aspirations.
Economists say the break-up of Yukos is a major cause of stagnation in the Russian oil industry and a wider economic slowdown in the world's No 2 oil exporter.
But Citigroup's Weill, speaking to reporters after a closed-door meeting between the executives and Putin, said there was no mention of the Yukos affair.
"I hope the solution to the Yukos matter can be ... worked out," he said. "Today's meeting would be a very good start."
Investors are also concerned about Russia's high inflation rate and the Kremlin's growing role in the country's strategic sectors such as oil and gas.
The government's plan to bar foreign investors from bidding for some of Russia's most lucrative oil and metals deposits is another headache, analysts say.
Earlier this week the Paris-based OECD published a report on Russia, saying the economy was in dire need of reform and in danger of slipping backwards. The report said all branches of government were weak, inefficient and corrupt.
Speaking to US investors, Putin pledged to do his best to improve Russia's much-criticised judicial and banking sectors and make it easier for foreigners to enter the economy's most protected sectors.
"We will create well-defined rules for foreign partners who want to enter sectors where restrictions exists due to issues related to national security," he said. "We will work to strengthen and protect property rights, including intellectual property rights," Putin said.
Another problem is Russia's inability to make the best use out of record-high oil prices: economists say that by failing to drive through desperately needed structural reforms, Russia has boxed itself into a corner where the wider economy cannot handle oil-fuelled appreciation of the rouble.
"From the one hand, (high oil prices) lead to stable and relatively high budget revenues," Putin said.
"But on the other hand, it has led to certain difficulties. In particular it leads to inflation ... and excessive strengthening of the national currency, which is having a negative effect on Russian exporters."
On Sunday, Putin is due to meet leaders from E.ON-Ruhrgas, Siemens, Metro, ThyssenKrupp, SMS Demag and EADS.
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