Boeing to produce in Russia

Boeing to produce in Russia

MOSCOW (AFP): Giant U.S. planemaker Boeing is to press ahead with plans to produce aircraft and engines in Russia, the Seattle-based firm's European sales director Kostya Zolotusky told Interfax over the weekend.

However, he warned economic difficulties and political uncertainties meant that the firm would not rush into expanding its projects in Russia.

The Russian stock market took a battering following the Asian financial crisis which erupted last October and forced the government to hike interest rates to protect the ruble.

A graft scandal last autumn weakened the position of key cabinet reformers and left question marks over their future in the government, raising concern among western investors about Russia's long-term commitment to reform.

The failure by lawmakers to adopt a new tax code has also been highlighted by analysts as a brake on inward investment.

Zolotusky said Boeing, the world's largest aircraft manufacturer, was due to deliver 10 medium-haul 737-400 passenger jets to the Russian flag carrier Aeroflot by mid 1999, and was bidding to supply 50 small craft to regional airlines.