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    1. 1. 14 th Annual CIS and Eastern Europe Business Forum Tucson, Arizona 2 November 2007 Ellen House, Desk Officer U.S. Department of Commerce
    2. 2. Entering Eurasian Markets <ul><li>Overview of the Markets: Opportunities and Challenges </li></ul><ul><li>Department of Commerce Services </li></ul><ul><li>U.S. Government and other Resources </li></ul>
    3. 3. Market Size- 275 Million Belarus – 11m Ukraine – 51 m Moldova – 4m Armenia – 3m Georgia – 5 m Azerbaijan – 7m Turkmenistan – 4m Uzbekistan – 26 m Kyrgyzstan – 4 m Tajikistan – 4 m Kazakhstan – 17m Russia – 145 m Total Eurasia market size – 275 million
    4. 4. Eurasia’s 12 Markets <ul><li>Various levels of transition and development … movement towards a market economy. </li></ul><ul><li>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. </li></ul><ul><li>Benefits of WTO accession: more transparent and predictable business environment. </li></ul><ul><li>Each country has its own market characteristics that require individual attention. </li></ul>
    5. 5. U.S. Exports to Eurasia (in mlns of US$)
    6. 6. World Bank’s Doing Business in 2008 www. doingbusiness .org <ul><li>Overall “Ease of Doing Business” Rankings (out of 178 countries) </li></ul><ul><li>Georgia – 18 Russia - 106 </li></ul><ul><li>Armenia – 39 Belarus – 110 </li></ul><ul><li>Kazakhstan - 71 Uzbekistan – 138 </li></ul><ul><li>Moldova – 92 Ukraine - 139 </li></ul><ul><li>Kyrgyz Republic – 94 Tajikistan - 153 </li></ul><ul><li>Azerbaijan – 96 Turkmenistan – N/A </li></ul>
    7. 7. Russian Federation <ul><li>World’s 10 th largest economy </li></ul><ul><li>World’s 3 rd largest foreign currency reserves </li></ul><ul><li>2006 FDI $28 billion (Jan.-Sept. 2007 estimate $40 bln) </li></ul><ul><li>Strong GDP (6.7% in 2006), and disposable income growth </li></ul><ul><li>U.S. exports grew 20% last year and stronger this year </li></ul><ul><li>Political and Business Risks are still significant: it is still not an easy place to do business or market to enter </li></ul><ul><li>Lack of transparency and predictability </li></ul><ul><li>Saturation in Moscow and St. Pete (look at regions) </li></ul><ul><li>Competition is fierce from Europe and Asia </li></ul>
    8. 8. Other Major Markets: Ukraine, Kazakhstan, Azerbaijan <ul><li>Ukraine: pluses - large market, central position in Europe, strong industrial base; minuses: political instability, needs more reforms </li></ul><ul><li>Azerbaijan: pluses - oil and gas wealth, GDP growth of 40%; minuses – administrative barriers, lack of transparency </li></ul><ul><li>Kazakhstan: pluses - huge hydrocarbon reserves, regional hub for Central & S. Asia; minuses – bureaucracy, state interference </li></ul>
    9. 9. Challenges for Doing Business in Eurasia <ul><li>Corruption </li></ul><ul><li>Administrative barriers </li></ul><ul><li>Selective interpretation of laws </li></ul><ul><li>Inadequate and inconsistent legislation and enforcement of laws </li></ul><ul><li>Poor protection of IPR </li></ul><ul><li>Conflicts between the state and business </li></ul><ul><li>Unfair competition by local companies </li></ul>
    10. 10. Basic Precautions: Keys to Success <ul><li>Do research and choose partners carefully (due diligence) </li></ul><ul><li>Prepare your expectations and take nothing for granted </li></ul><ul><li>Build relationships with key personnel on the ground </li></ul><ul><li>Details (take care of them, or have them taken care of) </li></ul><ul><li>Find reliable professional assistance (registering, banking, accounting, taxes, opening the office, personnel, security) </li></ul><ul><li>Get reliable translator/interpreter – translate your materials </li></ul><ul><li>Know where to go for help </li></ul>
    11. 11. Getting Started in Eurasia <ul><li>Take advantage of the unique knowledge and positioning of the U.S. Embassies and CS/BISNIS in the region </li></ul><ul><li>Become involved with the American Chambers of Commerce (Amchams) and other business associations (as in-country sources of support, information, advocacy) AND </li></ul><ul><li>Talk to Washington, DC, and other U.S.-based membership organizations (USRBC, FRAEC, AUCC, AGBC, USACC, USKBA, USUBC, etc.) </li></ul>
    12. 12. International Trade Administration <ul><li>Market Access and Compliance </li></ul><ul><li>(ensuring fair trade and market access for U.S. companies) </li></ul><ul><li>U.S. Commercial Service </li></ul><ul><li>(trade promotion) </li></ul><ul><li>Import Administration </li></ul><ul><li>(enforcing trade laws, i.e., anti-dumping and countervailing duties) </li></ul><ul><li>Manufacturing and Services </li></ul><ul><li>(industry experts) </li></ul>
    13. 13. Market Access and Compliance <ul><li>Identifies and overcomes trade barriers, resolves trade policy issues, and ensures that our trading partners fully meet their obligations under our trade agreements. </li></ul><ul><li>MAC ensures access to world markets for U.S. companies and workers so they can compete on a “level playing field.” </li></ul><ul><li>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 </li></ul>
    14. 14. FYO8 SABIT Group Training Programs <ul><li>Hospital Administration </li></ul><ul><li>Program dates: Jan. 19-Feb. 16, 2007 </li></ul><ul><li>Hotel Management </li></ul><ul><li>Program dates: Jan. 26-Feb. 23, 2007 </li></ul><ul><li>Infrastructure: Road Construction </li></ul><ul><li>Program dates: Feb. 23-Mar. 22, 2007 </li></ul><ul><li>Water Resource Management </li></ul><ul><li>Program dates: Mar. 29-Apr. 26, 2007 </li></ul><ul><li>Energy: Exploration & Production </li></ul><ul><li>Program dates: Apr. 26-May 24, 2007 </li></ul><ul><li>Infrastructure: Maritime Ports </li></ul><ul><li>Program dates: May 3-31, 2007 </li></ul><ul><li>Fruits and Vegetable Processing and Packaging </li></ul><ul><li>Program dates: June 7-July 4, 2007 </li></ul><ul><li>Timber </li></ul><ul><li>Program dates: July 12-Aug. 9, 2007 </li></ul><ul><li>Dairy Processing & Packaging </li></ul><ul><li>Program dates: Apr. 26-May 24, 2007 </li></ul>
    15. 15. MAC Eurasia Desk Officers <ul><li>Belarus, Ukraine, and Moldova </li></ul><ul><li>Christine Lucyk (202-482-2018, [email_address] ) </li></ul><ul><li>Russia </li></ul><ul><li>Matthew Edwards (202-482-2354, [email_address] ) or Jay Thompson (202-482-2511, [email_address] ) </li></ul><ul><li>Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan </li></ul><ul><li>Danica Starks (202-482-3952, [email_address] ) or Ellen House (202-482-0360, [email_address] ) </li></ul>
    16. 16. BISNIS/CS in Eurasia - <ul><li>Still going as part of CS: staff of 3 in DC, 10 in Eurasia </li></ul><ul><ul><li>Russia: Krasnodar and Nizhny Novgorod, also Tomsk, Novosibirsk, & Khabarovsk until December 31 </li></ul></ul><ul><ul><li>Caucasus: Tbilisi, planning to hire in Baku </li></ul></ul><ul><ul><li>Central Asia: Astana, Bishkek, Dushanbe, Tashkent </li></ul></ul><ul><li>Diminished info and services available </li></ul><ul><li>2007 Customs Report – Survey of 8 Countries </li></ul><ul><li>Upcoming Event on December 11 in Washington, DC: “Business Opportunities in Russia & Ukraine” </li></ul>
    17. 17. Commercial Service in Eurasia <ul><li>Ukraine </li></ul><ul><li> </li></ul><ul><li>Kyiv: Richard Steffens, Senior Commercial Officer </li></ul><ul><li>Tel: 380-44-490-4018 </li></ul><ul><li>[email_address] </li></ul><ul><li>Kazakhstan </li></ul><ul><li> </li></ul><ul><li>Almaty: Stuart Schaag, Senior Commercial Officer Tel: 7-727-250-4920 </li></ul><ul><li> </li></ul><ul><li>Russia </li></ul><ul><li> </li></ul><ul><li>Moscow: Ms. Beryl Blecher, Senior Commercial Officer Tel: 7-495-737-5030 [email_address] </li></ul><ul><li>St. Petersburg: Keith Silver, Principal Commercial Officer Tel: 7-812-326-2560 [email_address] </li></ul><ul><li>Vladivostok: Irina Konstantinova, Commercial Specialist Tel: 7-4232-499-381 </li></ul>
    18. 18. Sources of Trade & Project Finance <ul><li>Overseas Private Investment Corp . ( ) provides (1) political risk insurance/reinsurance and (2) corporate and project financing (projects with at least 25% U.S. ownership) </li></ul><ul><li>U.S. Export-Import Bank (Caucasus & Central Asia portal: http://www. exim . gov / centralasia /index. cfm , Russia portal: cfm ) provides loan guarantees, insurance, and direct loans to h elp foreign buyers finance purchases of U.S. goods and services. </li></ul><ul><li>U.S. Department of Agriculture, Foreign Agricultural Service ( ) 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.) </li></ul><ul><li>IFIs - European Bank for Reconstruction and Development ( ), Asian Development Bank ( ), World Bank ( ) have trade finance programs and offer consulting, goods and services procurement opportunities. </li></ul>
    19. 19. Ellen House, Desk Officer Office of Russia, Ukraine & Eurasia 202-482-0360, [email_address] 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.