Policy Memo: Swiss-Russian import of medical products policy

Policy Memo: Swiss-Russian import of medical products policy

March 27, 2017   In English, Policy, Russia, Switzerland,

The Russian-Swiss Joint Intergovernmental Commission on Trade and Economic Cooperation was established in January 1994. In July 2009, with the support of the Russian Chamber of Commerce and Industry, a business council on cooperation with Switzerland was established.[3]

Nowadays, the state of Russian-Swiss relations is characterized by positive dynamics, having continuous support from political dialogue at the highest levels.[3] 

Russia is a priority country of Swiss foreign policy. The two countries share many interests. As a member of the UN Security Council and the G-20, Russia is a major international player. Since the signing of a memorandum of understanding (MoU) in 2007, bilateral relations have developed significantly. The MoU defines the framework for systematic and closer cooperation in the areas of:

• Foreign policy and security;

• Justice, police and migration;

• Economics and science;

• Education and cultural affairs.

Representatives of both foreign ministries meet regularly for consultations. There are close contacts at the parliamentary level too, with active parliamentary friendships groups in both countries. Since 2009, Switzerland has represented Russia's interests in Georgia and Georgia's interests in Russia, after the two countries broke off diplomatic relations.[2] 

At the same time, the ties linking the business communities of both states are expanding and strengthening. It is quite evident from a large number of bilateral events such as meetings, forums, and conferences held at the trade mission level. Such events have already become traditional and are usually held in an atmosphere of mutual respect and desire to expand the frontiers of bilateral partnership.[3]

Russia's exports to Switzerland primarily consist of minerals (50.5 percent), gem stones and precious metals (38.7 percent), chemical products (6.3 percent) and metals and metal products (2.5 percent). Imports from Switzerland include cars, equipment and vehicles (42.1 percent), chemicals (33.0 percent), food and agricultural raw materials (9.6 percent) and other products, mainly watches (9.0 percent), metals and metal goods (3.7 percent).[1]

Major Swiss investors in Russia include Nestlé (food industry), Asea Brown Boveri (high-voltage and low-voltage equipment for industrial production, construction, housing, and utilities) and Schindler (elevators and escalators). Over 600 companies with Swiss capital are registered in Russia. Some major Russian investors in Switzerland include the Renova Group, Rusal, and the SUAL Group.[1]

Currently, more than 600 companies with Swiss capital are operating in Russia, on the other hand, many Russian companies are working on the Swiss market. However, the volume of bilateral trade has been constantly growing, and this suggests that the potential for bilateral cooperation is far from exhausted. Russia and Switzerland are also brought together by a number of major investment projects, designed to be implemented in the years to come.[3]

First of all, we are talking about projects in such important spheres as science-intensive high-tech industries including energy, space, medicine, nuclear and IT-technology. In particular, the most well-known and highly advocated bilateral projects deal with innovation and nanotechnology issues.[3]

In the last several years experts observe increased imports to Russia of Swiss machinery and equipment, electronic goods, which is encouraged by the economic growth and stable demand on the Russian market.[3]

In 2014, relations between Russia and the West deteriorated due to the crisis in Ukraine. In late July, the EU and the US moved from targeted sanctions against specific individuals and companies toward measures against whole sectors of the Russian economy. Switzerland did not join the EU sanctions.[1]

Russian's Ban on Medical Imports

Medvedev told Russian journalists a suggested bill to restrict imported medical devices and supplies would not be supported by his government unless treatment quality for patients could be maintained.[4]

The list of items suggested for the ban included everything from X-ray machines, defibrillators, incubators for newborns and prosthetic devices to crutches, bandages, and condoms.[4]

Russia's medical community criticized the proposal for failing to first consult doctors and medical experts as Russian producers can not make the same quality of products or do not make them at all.[4]

Russia's "import substitution" policy aims to encourage Russia's domestic producers to develop supplies for markets now dependent on foreign imports. It was accelerated after western sanctions were put in place following Russia's annexation of Crimea in neighboring Ukraine in 2014.[4] 

Although the Ban on Medical Imports is not accepted yet, there is a positive dynamics in this direction, which indicates that it can happen in the nearest future. Before it happens, Russia has to be prepared for such a drastic change.

Proposal

Russia is a large market with great potential for Swiss companies. Switzerland is committed to creating optimal conditions for Swiss businesses and has an action plan on developing economic relations to achieve this. A bilateral mixed economic commission meets on an annual basis. The Swiss Business Hub, which is integrated within the Swiss embassy, advises Swiss companies intending to enter the Russian market and promotes Switzerland as a business location.[2]

According to Russian laws "Goods are considered to be of Russian origin, if they are made or have been sufficiently processed in the country according to customs regulations that are applicable in Russia. A supplier is considered Russian if it is a legal entity registered in Russia (which can be fully foreign-owned, except in cases of specifically regulated sectors, such as media) or a Russian citizen."[5]

Taking into consideration these two facts and the necessity of developing the Russian sector of medicine, I propose such Swiss companies like Novartis (Sandoz), Hoffmann-La Roche, Basilea Pharmaceutica, Actelion and Straumann to create assembly factories on the territory of Russia and, therefore, to gain a foothold in the Russian market. 

Both Switzerland and Russia will benefit from it, which means that it is a win-win proposal:

• Switzerland: Swiss pharmaceutical industry will be expanded to Russian territory and, therefore, bring more profit and improve international relations between countries;

• Russia: not mentioning the increase in the number of workplaces, Russia will improve the quality of the medical product which will allow Russia to finally accept the Ban on Medical Imports and not to depend on other countries in the field of medicine. Moreover, the Russian government will increase its budget with the taxes from new pharmaceutical companies.

REFERENCES 

[1]  Sputnik, “Russian-Swiss Relations: Facts and Details”, 8 Dec 2014, 

http://sptnkne.ws/dVkD.

[2] FDFA,“BilateralrelationsSwitzerland–Russia”, 8 Apr 2016,

https://www.eda.admin.ch/eda/en/home/representations-and-travel-advice/russia/ switzerland-russia.html.

[3]  MiroshnichenkoV., “Russian-Swisstraderelations”, Business Mir #22, Aug 2012,

http://www.businessmir.ch/?p=159596&language=en.

[4]  VoaNews, “Russia’s PM Halts Ban on Medical Imports”, 3 Sep 2015,

 http://www.voanews.com/a/ russia-pm-halts-ban-on-medical-imports/2944103.html.

[5]  GoncharoffP., “AsTrumpPushes’MadeinUSA’, PutinPromotes Products ’Made 

in Russia’”, 16 Jan 2017, http://russia-insider.com/en/business/ri18556. 

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Policy: Nairobi National Park vs Exim Bank of China

Policy: Nairobi National Park vs Exim Bank of China

January 31, 2017   China, Environment, In English, International relations, Kenya, Policy,

A new Chinese-funded 472km standard-gauge railway line is being built in Kenya, the first part of which will link Mombasa with Nairobi.[2] Kenya is on course to complete the construction works in the second half of 2017, “but it’s only a part of a much wider project that will eventually link Mombasa with other major East African cities such as Kampala in Uganda”[1].

“Now, the first section of the east African nation's $13.8 billion railway is nearly finished”[1]. “It is hoped that the track will shorten the journey between the two cities from 12 hours to four hours. Passenger trains will travel at 120km/h, and freight trains will be able to carry 25 million tons per year, according to the International Railway Journal”[1]. “The hope is that this new railway will reduce congestion on Kenya's crowded road network, and promote tourism”[1]. “Eventually, the East African Railway Masterplan will link Mombasa with other major east African cities such as Kampala, in Uganda, and Juba, in South Sudan”[1].

(Accessed and sources: http://www.cnn.com/2016/05/15/africa/kenya-railway-east-africa/)

“Financing for the new line is provided by the Exim Bank of China which agreed to support 90%, or $US 3.42bn, of the project’s costs. The overall loan consists of a $US 1.6bn concessional loan payable over 20 years and a commercial loan of $US 1.82bn payable over 15 years. Both loans have been guaranteed by Kenya’s National Treasury. Yet achieving sufficient traffic volumes on the standard-gauge line to meet the cost of operations and repayment of the loan at this stage is far from assured”[2].

“While the hope is that once operational the line will provide the foundation for further economic growth in Kenya and east Africa, the first phase of the project has already provided additional jobs. Maina says the project has provided nearly 19,000 local people with direct employment and about 6000 indirectly”[2]. “More than 250 local suppliers have been directly engaged with supplying materials and subcontracting services to the project,” he says.

“The extension crosses rugged terrain and is the most challenging of the project. It will require 28km of bridges and 8.5km of tunnels, including one which will be 5.3km long and 70m deep and is expected to take five years to drill. The route also has high embankments and the cuttings will require slope protection according to its design details. It will also span existing infrastructure such as roads and the metre-gauge line. This section will cost $US 1.5bn, or $US 12.5m per km compared with $US 8m per km for the 472km stretch between Mombasa and Nairobi”[2].

(Accessed and sources: http://news.nationalgeographic.com/2016/04/160412-railway-kenya-parks-wildlife/)

“The park in southeastern Kenya was already traversed by an old, colonial-built rail line and a two-lane highway, both linking Kenya’s capital, Nairobi, to the coast at Mombasa. But the new railway, unlike the old one and the highway, is being built on a steep man-made embankment that elephants cannot cross. The railway has only a few bridges under which elephants and giraffes can pass, so in other places, they are forced to use underpasses constructed where the animals were believed to migrate”[3].

(Accessed and sources: http://news.nationalgeographic.com/2016/04/160412-railway-kenya-parks-wildlife/)

The official reason of why Chinese decided to pave the railroad through the National Park is because of cheaper land. But the real reason may be hidden from the eyes of ordinary people. 

“After the visit by China’s president to Kenya in April 2006, the Kenya government allocated China National Offshore Oil Company (CNOOC) exclusive rights, with no competitive bidding, to 6 out of the 11 available oil exploration blocks in the country. Current but outdated mining laws allow the government to do that. This opened 28 percent of total oil exploration area coverage in Kenya to CNOOC”[4].

“Petroleum exploration in Kenya started in the 1950s when Shell and British Petroleum drilled 10 wells at the coastal town of Lamu that proved to be dry. With improved underground oil surveillance technology, more companies have since joined in: Woodside Energy (Australia), Chevron, Exxon, and Petronas of Malaysia. None of them has found commercially exploitable quantities of natural gas or oil. And it remains to be seen if CNOOC will buck this trend”[4].

It’s important to provide a more thorough research of the China-Kenya relations in order to understand what rights China actually has in Kenya. The most important question that has to be answered is whether China is able to extract oil or minerals in Kenya or not. If the answer is positive, then it will be reasonable to check if the part of the Nairobi National Park, that will be disconnected from the main part by the railway, has any deposits of minerals and oil. In this case, it may be possible that China has an idea of extracting these oil or minerals deposits, because after cutting the park into two parts, the smaller part will not be protected by the natural agency anymore, and therefore China will be able to start extracting deposits.

References

[1] Phoebe Parke, “Kenya's $13 billion railway project is taking shape”, http://www.cnn.com/2016/05/15/africa/kenya-railway-east-africa/

[2] Shem Oirere, “Kenya readies first standard-gauge line”, http://www.railjournal.com/index.php/africa/kenya-readies-first-standard-gauge-line.html

[3] Jacob Kushner, “Controversial Railway Splits Kenya’s Parks, Threatens Wildlife”, http://news.nationalgeographic.com/2016/04/160412-railway-kenya-parks-wildlife/

[4] Michael Chege, “Economic Relations between Kenya and China, 1963–2007”.

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Policy: The Etiquette in Singapore

Policy: The Etiquette in Singapore

January 16, 2017   Etiquette, In English, International relations, Policy, Singapore,

Singapore, officially the Republic of Singapore, and often referred to as the Lion City or the Little Red Dot, is a sovereign city-state in Southeast Asia, and the world’s only island city-state. Despite its small size, Singapore has a diversity of languages, religions, and cultures [2]. It is a conglomeration of Chinese (76%), Malay (15%) and Indian (6%) cultures. In the past, this racial mixture has lead to some conflict. However, today most Singaporeans enjoy racial harmony and national unity. Each group works hard to maintain its cultural traditions while building a modern, cohesive society [3]. 

Each Singaporean’s behaviors and attitudes are influenced by, among other things, his or her home language, and his religion. Singaporeans who speak English as their native language tend to lean toward Western culture, while those who speak Chinese as their native language tend to lean toward Chinese culture and Confucianism. Malay-speaking Singaporeans tend to lean toward Malay culture, which itself is closely linked to Islamic culture [2].

Because of a lot of different cultures, religions, and languages, in order to maintain order, they have to follow a lot of rules and have a strict etiquette. 

Etiquette is a code of behavior that delineates expectations for social behavior according to contemporary conventional norms within a society, social class, or group [1].

As with any country throughout the world, there are multiple “Do’s and Don’ts” in Singapore that should be considered when visiting, either for leisure or business. When traveling with a spouse or engaging in cultural activities with a significant other, avoid public displays of affection and always remain calm, showing little to no emotion. Joking or being humorous should only be done if you know someone well and after building a solid relationship. To help build a good relationship, when invited to a house for a party or gathering, always bring a gift, but ensure it is small enough not to be considered a bribe [4].

Throughout Singapore, Western clothing is very common, with the casual dress being popular, but there are some considerations to take into account. For men in business, always come prepared with a white shirt, standard tie, and trousers, but leave the jacket at home. For women in business, consider wearing a blouse with sleeves and a formal skirt or trouser suit [4]. 

The list of the most common rules and etiquette [3]:

Meeting and Greeting 

• Shake hands with everyone present at a business meeting or social occasion. Shake hands again when leaving. Your handshake should be firm. 
• Singaporeans may bow slightly as they shake your hand. Many Westerners are generally taller than Singaporeans so it would be polite to give a small bow. A slight bow for Chinese or older people is polite.

Body Language

• Never touch a person’s or child’s head. The head is considered sacred. 
• The foot is considered the lowest part of the body and is thought to be unclean. The foot should never be used to point at someone, and you should never show the bottom of your feet. Tapping your foot or fidgeting your legs denotes feebleness and lack of interest. When crossing your legs, do so only by placing one knee over the other.

Corporate Culture

• Westerners are expected to be punctual for social occasions and business meetings. Call if you are delayed. Tardiness is viewed as a sign of disrespect. 
• Business cards are exchanged upon being introduced. Exchange business cards with both hands after you are introduced. 
• The government finances many of the large corporations in Singapore. This bureaucratic system is known for its high efficiency and corruption-free business style. Western-style management is evident in large firms managed by Singaporeans. 
• Personal contacts are important in business. It takes several years to develop business relationships. Take time to know people before discussing business. 
• Singaporeans tend to get right down to business in meetings. Singaporeans are fast-paced and can make decisions quickly. 
• You are expected to deliver reports, correspondence, packages, etc. when promised. 
• Always talk straight and get right to the point with Singaporeans. You can be direct when dealing with issues of money.

As you could understand, there are a lot of different rules in Singapore. Unfortunately, there are a lot of those rules that may seem “shocking” for a European people. Here are some of them.

Chewing gum is banned in Singapore so leave it at home when packing your bags. Importation of chewing gums into the country, even if it is not for trading, is illegal. The current set of regulations does not have provisions for carrying gum for personal use. Improper disposal of gum and carrying large quantities of the banned product will cost a hefty fine of up to $1000 for first-time offenders [5].

Singapore is bent on maintaining its reputation for being impeccably clean, with an active campaign against littering and stringent enforcement in place. First-time offenders who throw small items like cigarette butts or candy wrappers are fined $300. Those who throw out bigger items like drink cans or bottles are considered defiant and are required to appear before the court. The punishment usually involves a Corrective Work Order (CWO), where the offenders clean up a specified area while wearing a bright luminous green vest [5].

Smoking is prohibited in certain areas in Singapore. The smoking prohibition currently covers all indoor places where the public congregates. The ban was revised in 2009 to include indoor public places that are not air-conditioned, such as shopping centers, offices, and shops. Outdoor public facilities, like fitness areas, sports courts, and playgrounds, were also included in the extension. In 2013, the ban extended even further to include multi-purpose halls, pedestrian overhead bridges, covered walkways and linkways, hospital outdoor compounds, and a five-meter perimeter around bus shelters. The extension also includes common areas of residential buildings [5].

Homosexual Relations. The legislation on “Outrages on Decency” criminalizes same-sex relations. This law used to be under the umbrella of “unnatural sex” or sex “against the order of nature.” Violators of this law can cost the offender up to two years in prison [5].

Summing up all the information, a very strict and at the same time very clean and disciplined country appears in the mind. But these rules and this lifestyle, in general, is definitely not for everyone.

Bibliography:

[1] “Etiquette” — https://en.wikipedia.org/wiki/Etiquette

[2] “Singapore” — https://en.wikipedia.org/wiki/Singapore

[3] “Singapore” — http://www.ediplomat.com/np/cultural_etiquette/ce_sg.htm

[4] “Guide To Singapore – Etiquette, Customs, Culture & Business” — http://www.kwintessential.co.uk/resources/guide-to-singapore-etiquette-customs-culture-business.html

[5] “Singapore: Laws To Know Before You Go” — http://www.goabroad.com/articles/study-abroad/singapore-laws-to-know-before-you-go

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