The document discusses opportunities and challenges for businesses entering markets in Eurasia. It provides an overview of the market size and characteristics of countries in the region. Challenges include corruption, administrative barriers, and inconsistent legislation. The U.S. Department of Commerce offers services to help businesses navigate these issues and access trade financing, including international trade experts, assistance resolving trade complaints, and training programs.

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. 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 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. Eurasia’s 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 Bank’s 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 World’s 10 th largest economy World’s 3 rd 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 Administration www.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 Programs www.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, [email_address] ) Russia Matthew Edwards (202-482-2354, [email_address] ) or Jay Thompson (202-482-2511, [email_address] ) Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan Danica Starks (202-482-3952, [email_address] ) or Ellen House (202-482-0360, [email_address] )

16. BISNIS/CS in Eurasia www.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: 380-44-490-4018 [email_address] Kazakhstan www.buyusa.gov/kazakhstan/en/ Almaty: Stuart Schaag, Senior Commercial Officer Tel: 7-727-250-4920 Stuart.schaag@mail.doc.gov Russia www.buyusa.gov/russia/en/ Moscow: Ms. Beryl Blecher, Senior Commercial Officer Tel: 7-495-737-5030 [email_address] St. Petersburg: Keith Silver, Principal Commercial Officer Tel: 7-812-326-2560 [email_address] Vladivostok: Irina Konstantinova, Commercial Specialist Tel: 7-4232-499-381 irina.konstantinova@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 h elp 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 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.