Mayor of Moscow Yuri Luzhkov and Director of the Belfer Center for Science and International Affairs Graham Allison, on behalf of the Kennedy School of Government, recently signed an agreement to cooperate in developing a new mortgage program for the city of Moscow. This is the first attempt since the fall of the Soviet Union to make home mortgages widely available to the millions of residents of the city.

The Kennedy School will coordinate efforts between the city of Moscow and other collaborating institutions: Fannie Mae, the International Finance Corp., BankBoston, and Day, Berry & Howard, and other relevant institutions that will join in the agreement in the future. The announcement came at the end of a two-and-a-half day U.S.-Russian Investment Symposium, sponsored by the Kennedy School, that focused on challenges and opportunities for increasing Western direct and portfolio investment in Russia.

The agreement calls for the Kennedy School, under Allison's leadership, to establish a collaborative effort to develop the necessary legal, regulatory, institutional, and financial elements to create a successful mortgage market in Russia's capital city. In addition, the agreement calls for a statement of principles to be completed within 90 days.

"We are enthusiastic about Mayor Yuri Luzhkov and most impressed with what he has accomplished over the last six years in transforming Moscow. We are honored to be able to work with him and his team in this important initiative," said Allison.

"Under the socialist system, the State took responsibility for providing citizens with housing, and excelled in failing at that task,Ó said Luzhkov. ÒUnder the new conditions, we must find new ways that are appropriate in a civilized world. There are many approaches to the problem, but only one acceptable solution: to build using the resources of the citizens. But the state must create conditions so that people can build their own housing. A functioning mortgage market under which the state helps citizens to receive funding on favorable terms is the only long-range solution. We will accept with gratitude any assistance to Moscow from Harvard University and from American financial institutions."

More than 400 top officials from business and government from both Russia and the West participated in the second annual symposium. Conference speakers included George Soros (chairman, Soros Fund Management), Victoria Mitina (deputy head of the Presidential Administration), Yakov Urinson (Russia's deputy prime minister and minister of economics), and Boris Berezovsky, (chairman of LogoVAZ).

The symposium was sponsored by the Strengthening Democratic Institutions Project at the John F. Kennedy School of Government in partnership with The Conference Board, the U-S. Russia Business Council and the All-Russian Association of Privatized and Private Enterprises.