House
Transcript of House
14th Annual CIS and Eastern Europe Business ForumTucson, Arizona 2 November 2007
Ellen House, Desk Officer
U.S. Department of Commerce
2
trade.gov
Entering Eurasian Markets
Overview of the Markets: Opportunities and Challenges
Department of Commerce Services
U.S. Government and other Resources
3
trade.gov
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
trade.gov
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
trade.gov
U.S. Exports to Eurasia (in mlns of US$)
2005 2006 2007 (H1) % ChangeEurasia Total 5911.4 7062.3 4993.7 (07/06)Russia 4000.0 4700.0 3200.0 40.7Ukraine 524.0 756.0 728.0 66.2Kazakhstan 530.0 646.0 424.6 23.8Georgia 213.8 263.5 189.9 81.6Turkmenistan 237.0 112.8 164.0 134.7Azerbaijan 132.5 231.0 72.8 -25.4Armenia 65.5 80.4 53.0 55.1Belarus 34.9 74.5 50.9 68.3Uzbekistan 73.8 53.9 37.3 32.6Tajikistan 28.8 43.0 28.9 10.8Kyrgyzstan 31.1 71.2 25.8 31.8Moldova 40.0 30.0 18.5 41.1
Source: World Trade Atlas
6
trade.gov
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
trade.gov
Russian Federation
• World’s 10th largest economy
• World’s 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
trade.gov
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
trade.gov
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
trade.gov
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
trade.gov
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
trade.gov
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
trade.gov
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
trade.gov
FYO8 SABIT Group Training Programswww.mac.doc.gov/sabit
Hospital AdministrationProgram dates: Jan. 19-Feb. 16, 2007
Hotel ManagementProgram dates: Jan. 26-Feb. 23, 2007
Infrastructure: Road ConstructionProgram dates: Feb. 23-Mar. 22, 2007
Water Resource ManagementProgram dates: Mar. 29-Apr. 26, 2007
Energy: Exploration & ProductionProgram 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 & PackagingProgram dates: Apr. 26-May 24, 2007
15
trade.gov
MAC Eurasia Desk Officers
Belarus, Ukraine, and Moldova Christine Lucyk (202-482-2018, [email protected])
RussiaMatthew Edwards (202-482-2354,
[email protected]) or Jay Thompson (202-482-2511, [email protected])
Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan
Danica Starks (202-482-3952, [email protected]) or Ellen House (202-482-0360, [email protected])
16
trade.gov
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
trade.gov
Commercial Service in Eurasia
Ukraine www.buyusa.gov/ukraine/en/ Kyiv: Richard Steffens, Senior
Commercial Officer Tel: [email protected]
Kazakhstanwww.buyusa.gov/kazakhstan/en/ Almaty: Stuart Schaag, Senior
Commercial Officer Tel: 7-727-250-4920
Russia
www.buyusa.gov/russia/en/
Moscow: Ms. Beryl Blecher, Senior Commercial Officer Tel: 7-495-737-5030 [email protected]
St. Petersburg: Keith Silver, Principal Commercial Officer Tel: 7-812-326-2560 [email protected]
Vladivostok: Irina Konstantinova, Commercial Specialist Tel: 7-4232-499-381 [email protected]
18
trade.gov
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
trade.gov
Ellen House, Desk OfficerOffice of Russia, Ukraine & Eurasia202-482-0360, [email protected]
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.