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the Russian corporation is notorious for its secrecy and skulduggery and since the collapse of the Soviet Union, this reputation seems to have grown. This is the result of a number of factors:

• The reticence of major Russian corporations, such as Gazprom and Lukoil, to publish audited annual reports and accounts, despite being public companies.
  
• The shady privatisation process that has resulted in industries coming totally under the power of the "oligarchs".
  
• Privatisations involving international investors which have been "suspended" in favour of local investors. These include the Lomonosov Porcelain Plant and the BP-Sidanco affair.

It is therefore particularly encouraging to see a growing sector of Russian industry taking a transparent approach to its business activities.

It is becoming clear that this open approach, along with a sophisticated level of corporate governance, is the only way Russian corporations can compete globally in the 21st century.

An active example of this changing approach is Aeroflot, the Russian national airline. Aeroflot used to be part of a mammoth state enterprise, but in 1991 it was privatised into numerous regional "babyflots". The international division retained the name Aeroflot, maintaining its international business and developing a domestic business in competition with its former sister divisions.

In the early 1990s, Aeroflot came under the control of the oligarch Berezovsky, through his Logovaz subsidiary. However, with the assistance of the Russian government, Aeroflot has become independent. It now has minority part-foreign share ownership and is an open joint-stock company quoted on the Moscow stock exchange.

Russia’s economy must grow 5% a year for the next 20 years to catch up with Europe. That would be a remarkable achievement

The company has opened its books for scrutiny over the last five years by appointing Arthur Andersen as its auditor, Morgan Stanley Dean Witter as its financial advisor and using international legal advisors. So why has Aeroflot changed its outlook? Because only by taking an open and transparent approach can it raise the investment needed to join the expanding Sky Team Alliance of Air France, Delta, Korean Airlines and AeroMexico. This requires Aeroflot to replace and expand its fleet with modern aircraft and to build a £200m airport terminal, currently being project managed by my company, Bovis Lend Lease.

From the point of view of the Russian government, this change in approach is essential if it is to raise foreign investment from its current miserly level and attempt to match what is being achieved in the Central European countries of Hungary, Poland and the Czech Republic at the moment.

The largest proportion of investment in Moscow real estate today is private. In many cases, the investment is a cash investment – literally – with tax avoidance a recurring theme. For the contractor, non-payment is a high risk so the law-abiding foreign investor often complains of an uneven playing field. Similarly, the international contractor is wary of over-committing and of finding the high rewards incommensurate with the risks.

President Putin's initiatives to lower tax rates on individuals and corporations and then to enforce them is essential in order to bring in the huge volumes of foreign investment that have poured into the neighbouring countries of Central Europe. Already we can see levels of interest from foreign investors growing rapidly: Ford, Renault and General Motors have all started to invest in new manufacturing facilities over the last 12 months – just the kind of investors that major international contractors feel most comfortable with and to whom they are ready to offer the most innovative solutions.

The European Business Club estimates that Russia's economy must grow 5% a year for the next 20 years just to catch up with the rest of Europe. To do that would be a remarkable achievement. To get close to that level, Russia will have to attract continuing inward investment on a Marshall Plan scale. Only the openness and transparency of the more forward-thinking Russian corporations will attract investment on a scale that triggers the rapid growth in the Russian construction market that has already occurred in its neighbouring countries.