Russia announced Monday that it has hired Goldman, Sachs & Co. _ one of capitalism's biggest guns _ to recruit foreign investors and guard its interests in business deals with the West.
The move to retain the Wall Street investment bank indicates President Boris N. Yeltsin is intensifying his efforts to revive Russia's moribund economy through foreign investment.
"We want to create a new image of Russia for foreign investors," said Leonid Grigoriev, deputy economics minister in charge of Yeltsin's Committee on Foreign Investment.
Goldman Sachs will be "a new force inside the country to work on the side of the Russian government," Grigoriev said at a news conference.
Robert Rubin, a Goldman Sachs senior partner, signed a contract Saturday with Deputy Prime Minister Yegor Gaidar, Russia's top economic official.
Goldman Sachs won the contract over three other firms. Officials refused to disclose the terms, but indicated that the company will receive commissions for bringing business to Russia.
Rubin said his firm's reputation will reassure foreigners skittish about investing in Russia.
Russia has sought the advice of many Western experts in creating a market economy. The International Monetary Fund now advises on managing the foreign debt, and Harvard University economist Jeffrey Sachs works as a consultant on overall economic policies.
Some Russians have raised questions about the rising influence of such advisers; one parliament member has gone so far as to allege that the IMF now runs Russia's economy. Newspaper stories have cited alleged examples of American firms swindling naive Russian partners.
But Grigoriev and Rubin played down possible negative reactions to the hiring of Goldman Sachs.
"We will work to get the fairest deal _ a deal that . . . does not take advantage of Russia," Rubin said.
He said Goldman Sachs would undertake a small number of projects with "a good chance of success," including ventures in the oil and gas sector, food processing, consumer goods and clothing.
Rubin stressed that Goldman Sachs mainly will negotiate deals with foreign companies, not advise Russia on managing its economy. But, he said, the firm will offer advice on making Russia's tax laws attractive to foreign business and on providing special tax breaks.