Russian president to Silicon Valley: help!

Wed Jun 23, 2010 4:11pm IST

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* Russia has wanted to join WTO for more than a decade

* Corruption in Russia endemic, survey shows

* Medvedev sees Silicon Valley "interesting"

By Peter Henderson

SAN FRANCISCO, June 23 (Reuters) - IPhone chief Steve Jobs and his tech titan friends take an unusual consulting opportunity on Wednesday: helping Russian President Dmitry Medvedev turn around his creaky economy.

Medvedev will make a whirlwind tour of Silicon Valley, the U.S. technology hub he sees as a "quite interesting" model that Russia could follow.

Whether it will do so may be a different matter.

After more than a decade of relative freedom, Russia's economy is still stuck in its dependence on energy, sending natural gas to Europe and petroleum to the world, and leading Medvedev to look for new industries.

Russia must focus on improving protection of intellectual property if it wants to join the World Trade Organization, a subject that President Barack Obama and Medvedev are expected to discuss later in the week in Washington, a senior administration official said on condition of anonymity.

"The Russians are going to have to take the practical steps that any other prospective member of the WTO need so to take," the official said. Relations between Russia and the United States have warmed, recently, although that won't assure Russia membership in the trade group.

"This isn't a favor to us or to the WTO. It's deeply in the self-interest of protecting the intellectual output, the innovation, that comes out of Russian industry," the person added.

In Silicon Valley Medvedev will visit Apple Inc (AAPL.O) chief Jobs, John Chambers, the chief of Cisco Systems Inc (CSCO.O), which makes the guts of the Internet, and microblog sensation Twitter Inc's chief executive and founder, Evan Williams and Biz Stone.

Medvedev, who will round out his day with a speech at Stanford University, described Silicon Valley as a place to learn lessons about modernization.

"This experience is not definitive, but it is quite interesting," local press quoted him as saying before he left Russia, and he wants to build a high-tech hub outside of Moscow with tax breaks and special rules.

Critics want rules that everyone can play by, though. One tech star born in Russia that Medvedev won't meet is Google Inc founder Sergey Brin, who once called Russia "Nigeria with snow".

In fact, by some accounts Nigeria is a better place to do business than Russia, which for more than a decade has promised to clean up its business climate and join the World Trade Organization, without success.

The country rated 2.2 out of 10 in terms of business confidence in the 2009 Corruption Perception Index from Transparency International -- behind Nigeria. Its best score of the last decade, 2.8 in 2004, tied Russia with Tanzania and Mozambique. (Reporting by Peter Henderson, Arshad Mohammed and Guy Faulconbridge)

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