14th Annual CIS and Eastern Europe Business Forum

1
14th Annual CIS and Eastern Europe Business Forum

• Tucson, Arizona
• 2 November 2007
• Ellen House, Desk Officer
• U.S. Department of Commerce

2
Entering Eurasian Markets

• Overview of the Markets Opportunities and
  Challenges
  
• Department of Commerce Services
• U.S. Government and other Resources

3
Market Size- 275 Million
Total Eurasia market size 275 million
Belarus 11m
Ukraine 51 m
Moldova 4m
Russia 145 m
Georgia 5 m
Armenia 3m
Azerbaijan 7m
Kazakhstan 17m
Turkmenistan 4m
Tajikistan 4 m
Uzbekistan 26 m
Kyrgyzstan 4 m
4
Eurasias 12 Markets

• Various levels of transition and development
  movement towards a market economy.
  
• Some are WTO members (Armenia, Georgia, Moldova,
  Kyrgyzstan), others are more-or-less actively
  seeking to accede (Azerbaijan, Kazakhstan,
  Russia, Tajikistan, Ukraine)---good news for U.S.
  companies.
• Benefits of WTO accession more transparent and
  predictable business environment.
  
• Each country has its own market characteristics
  that require individual attention.

5
U.S. Exports to Eurasia (in mlns of US)
6
World Banks Doing Business in 2008
www.doingbusiness.org

• Overall Ease of Doing Business Rankings (out of
  178 countries)
  
• Georgia 18 Russia - 106
• Armenia 39 Belarus 110
• Kazakhstan - 71 Uzbekistan 138
• Moldova 92 Ukraine - 139
• Kyrgyz Republic 94 Tajikistan - 153
• Azerbaijan 96 Turkmenistan N/A

7
Russian Federation

• Worlds 10th largest economy
• Worlds 3rd largest foreign currency reserves
• 2006 FDI 28 billion (Jan.-Sept. 2007 estimate
  40 bln)
  
• Strong GDP (6.7 in 2006), and disposable income
  growth
  
• U.S. exports grew 20 last year and stronger this
  year
  
• Political and Business Risks are still
  significant it is still not an easy place to do
  business or market to enter
  
• Lack of transparency and predictability
• Saturation in Moscow and St. Pete (look at
  regions)
  
• Competition is fierce from Europe and Asia

8
Other Major Markets Ukraine, Kazakhstan,
Azerbaijan

• Ukraine pluses - large market, central position
  in Europe, strong industrial base minuses
  political instability, needs more reforms
  
• Azerbaijan pluses - oil and gas wealth, GDP
  growth of 40 minuses administrative barriers,
  lack of transparency
  
• Kazakhstan pluses - huge hydrocarbon reserves,
  regional hub for Central S. Asia minuses
  bureaucracy, state interference

9
Challenges for Doing Business in Eurasia

• Corruption
• Administrative barriers
• Selective interpretation of laws
• Inadequate and inconsistent legislation and
  enforcement of laws
  
• Poor protection of IPR
• Conflicts between the state and business
• Unfair competition by local companies

10
Basic Precautions Keys to Success

• Do research and choose partners carefully (due
  diligence)
  
• Prepare your expectations and take nothing for
  granted
  
• Build relationships with key personnel on the
  ground
  
• Details (take care of them, or have them taken
  care of)
  
• Find reliable professional assistance
  (registering, banking, accounting, taxes, opening
  the office, personnel, security)
  
• Get reliable translator/interpreter translate
  your materials
  
• Know where to go for help

11
Getting Started in Eurasia

• Take advantage of the unique knowledge and
  positioning of the U.S. Embassies and CS/BISNIS
  in the region
  
• Become involved with the American Chambers of
  Commerce (Amchams) and other business
  associations (as in-country sources of support,
  information, advocacy) AND
• Talk to Washington, DC, and other U.S.-based
  membership organizations (USRBC, FRAEC, AUCC,
  AGBC, USACC, USKBA, USUBC, etc.)
  

12
International Trade Administrationwww.trade.gov

• Market Access and Compliance
• (ensuring fair trade and market access for U.S.
  companies)
  
• U.S. Commercial Service
• (trade promotion)
• Import Administration
• (enforcing trade laws, i.e., anti-dumping and
  countervailing duties)
  
• Manufacturing and Services
• (industry experts)

13
Market Access and Compliance

• Identifies and overcomes trade barriers, resolves
  trade policy issues, and ensures that our trading
  partners fully meet their obligations under our
  trade agreements.
• MAC ensures access to world markets for U.S.
  companies and workers so they can compete on a
  level playing field.
  
• MAC country desk officers - experts on the
  commercial, economic, and political climates in
  their assigned countries. Focus on resolving
  trade complaints and market access issues, such
  as intellectual property rights, quotas,
  customs, transparency, commercial disputes with
  foreign govt entities

14
FYO8 SABIT Group Training Programswww.mac.doc.gov
/sabit

• Hospital Administration
• Program dates Jan. 19-Feb. 16, 2007
• Hotel Management
• Program dates Jan. 26-Feb. 23, 2007
• Infrastructure Road Construction
• Program dates Feb. 23-Mar. 22, 2007
• Water Resource Management
• Program dates Mar. 29-Apr. 26, 2007
• Energy Exploration Production
• Program dates Apr. 26-May 24, 2007

• Infrastructure Maritime Ports
• Program dates May 3-31, 2007
• Fruits and Vegetable Processing and Packaging
• Program dates June 7-July 4, 2007
• Timber
• Program dates July 12-Aug. 9, 2007
• Dairy Processing Packaging
• Program dates Apr. 26-May 24, 2007

15
MAC Eurasia Desk Officers

• Belarus, Ukraine, and Moldova
• Christine Lucyk (202-482-2018, Christine.lucyk_at_mai
  l.doc.gov)
  
• Russia
• Matthew Edwards (202-482-2354, matthew.edwards_at_mai
  l.doc.gov) or Jay Thompson (202-482-2511,
  jay.thompson_at_mail.doc.gov)
  
• Armenia, Azerbaijan, Georgia, Kazakhstan,
  Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan
  
• Danica Starks (202-482-3952, danica.starks_at_mail.do
  c.gov) or Ellen House (202-482-0360,
  ellen.house_at_mail.doc.gov)

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BISNIS/CS in Eurasiawww.bisnis.doc.gov -
www.export.gov

• Still going as part of CS staff of 3 in DC, 10
  in Eurasia
  
• Russia Krasnodar and Nizhny Novgorod, also
  Tomsk, Novosibirsk, Khabarovsk until December
  31
  
• Caucasus Tbilisi, planning to hire in Baku
• Central Asia Astana, Bishkek, Dushanbe,
  Tashkent
  
• Diminished info and services available
• 2007 Customs Report Survey of 8 Countries
• Upcoming Event on December 11 in Washington, DC
  Business Opportunities in Russia Ukraine

17
Commercial Service in Eurasia

• Ukraine
• www.buyusa.gov/ukraine/en/
• Kyiv Richard Steffens, Senior Commercial Officer
  
  
• Tel [phone]
• Richard.Steffens_at_mail.doc.gov
• Kazakhstan
• www.buyusa.gov/kazakhstan/en/
• Almaty Stuart Schaag, Senior Commercial Officer
  Tel [phone]
  
• Stuart.schaag_at_mail.doc.gov

• Russia
• www.buyusa.gov/russia/en/
• Moscow Ms. Beryl Blecher, Senior Commercial
  Officer Tel [phone]
  beryl.blecher_at_mail.doc.gov
  
• St. Petersburg Keith Silver, Principal
  Commercial Officer Tel
  7-812-326-2560 keith.silver_at_mail.doc.gov
  
• Vladivostok Irina Konstantinova, Commercial
  Specialist Tel [phone]
  irina.konstantinova_at_mail.doc.gov
  

18
Sources of Trade Project Finance

• Overseas Private Investment Corp. (www.OPIC.gov)
  provides (1) political risk insurance/reinsurance
  and (2) corporate and project financing (projects
  with at least 25 U.S. ownership)
• U.S. Export-Import Bank (Caucasus Central Asia
  portal http//www.exim.gov/centralasia/index.cfm,
  Russia portal www.exim.gov/russia/index.cfm)
  provides loan guarantees, insurance, and direct
  loans to help foreign buyers finance purchases of
  U.S. goods and services.
• U.S. Department of Agriculture, Foreign
  Agricultural Service (www.fas.usda.gov) provides
  U.S. agricultural exporters with short- and
  intermediate-term commercial financing support
  through Commodity Credit Corporation (CCC) export
  credit guarantee programs. (Also, reports and
  analysis, trade missions and other events, trade
  leads, etc.)
• IFIs - European Bank for Reconstruction and
  Development (www.ebrd.com), Asian Development
  Bank (www.adb.org), World Bank (www.worldbank.org)
  have trade finance programs and offer
  consulting, goods and services procurement
  opportunities.

19
Ellen House, Desk OfficerOffice of Russia,
Ukraine Eurasia202-482-0360,
ellen.house_at_mail.doc.gov
The U.S. Department of Commerce is here to assist
you to search for opportunities, and assist in
any market barriers that you may encounter.