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This is an archived USAID document retained on this web site as a matter of public record.
Remarks by Assistant Administrator Don Pressley
to the USAID/GTN State Partner Conference
February 2, 2000
Thank you for that introduction, Holly [Wise].
It’s a pleasure to be here, and, I must say, it’s a pleasure to see so many people interested in doing business in our part of the world.
It’s been a little over ten years now since the Berlin Wall fell, and about eight since the Soviet Union collapsed.
As little as fifteen years ago, who would’ve thought that Russia would be holding democratic elections, that Poland - the very seat of the Warsaw Pact - would be a member of NATO, or, for that matter, that Tito’s Yugoslavia would so quickly disintegrate into war and ethnic conflict?
And what makes all these things so remarkable is the speed at which they have happened. What a decade it’s been.
USAID started its programs in Europe in 1990 and in Eurasia in 1993, and our goal then, as it is now, is to put ourselves out of business. (I bet you never thought you’d hear your government say that!) One of our priorities has been to get these countries integrated into the global marketplace as quickly as possible.
For this reason, for years the cornerstone of our assistance programs has been economic development: restructuring the economy, privatizing state-owned enterprises, helping rewrite tax codes and business regulations, and promoting the development of small and medium sized businesses.
And I can tell you that we’ve faced - and still do face - a lot of obstacles, many of which I know you face too.
Communism may have fallen in Europe and Eurasia, but in too many ways in too many places, the communist mentality has not.
Confusing and contradictory laws make the legal hurdles to entrepreneurship seem almost worse than they used to be.
And pervasive official corruption puts a whole new spin on the phrase "it takes money to make money."
To the average American these concerns may seem very distant. But think about this:
A nation without a strong rule of law is a nation where businesses have no protection or recourse against criminals - especially if the criminals are in cahoots with the government.
A weak judiciary means that intellectual property - one of America’s most important and valuable exports - can be illegally copied and sold with no fear of the consequences.
And a government with overly complex and burdensome laws and regulations invites official corruption, creating an environment where business is judged not by the quality of its product but by its ability to pay bribes. Corruption takes a level playing field and tilts it toward the dishonest.
These conditions, among others - like high inflation and the lack of sound infrastructure - not only make it hard for existing businesses to operate but also for new businesses - including American firms - to get going - especially in those countries that are still trying to figure out how the market operates.
As I said, USAID has been working hard, these past few years, to reform these conditions. To be frank, in most of the region our work is far from over; still, I think we’ve made some notable progress.
One of the first things we did, for example, was to help strengthen the rule of law in places like Georgia by helping ensure that only qualified judges assumed the bench. With its implementing partners, USAID helped administer the qualifying exams, helped train the new judges, provided computers for the appellate courts, and helped establish a judges’ association.
Today, as a result, Georgian attorneys report that the legal process is both freer and fairer.
To strengthen the judiciary, and to make it more independent, USAID has conducted programs like the one in Russia, where we are helping the Russian judiciary administer cases uniformly and encouraging the use of precedence in judicial decisions.
And to fight corruption and increase transparency in government we have, for example, sponsored a "Partnership for Integrity" group in Donetsk [Don-YETsk], Ukraine - a public-private partnership between NGOs, business associations and the law enforcement community - that is working to change the official atmosphere toward corruption and increase public understanding of its consequences.
And as a result of our efforts, last year an American-British business venture headed by the American firm Cargill decided to invest over $65 million in a sunflower processing plant in Donetsk [Don-YETsk].
So these are some of the things we have been doing and will keep doing to help change the business climate in Europe and Eurasia over the next ten years.
But let’s take a look at what we’re doing to help businesses on the ground:
As in America, small and medium businesses in the E&E region are the fastest growing part of the economy, spurring economic growth and creating thousands of new jobs.
We all know that to operate, these businesses need not only resources and equipment and staff, but access to credit. In the former Soviet bloc, banks too often either don’t know how to target the small business sector with their commercial loans or they simply don’t want to.
USAID, working through our various enterprise funds and other credit support mechanisms, is helping these banks extend credit to small and medium-sized businesses from Poland to the Russian Far East.
We have helped businesses like the Yrys [YOUR-is] meat processing plant in Astana, Kazakhstan, which sells meat and sausages. This plant is actually a joint venture between an American firm - Koch [CAUCH] Supplies of Kansas City, Missouri - and the Kazakh corporation Tsesna [SES-na].
With funding from the Central Asia-America Enterprise Fund and a grant from our Food Systems Restructuring Project, we have provided technical assistance in equipment installation, accounting, and marketing.
I’m happy to report that the Yrys [YOUR-is] plant is already profitable: the products are attractive, and, I’m told, pretty darn good. So good, in fact, that the plant has been running two shifts a day to keep up with demand - and they’ve even opened a specialty store in downtown Astana.
So the next time you’re in Kazakhstan, be sure to try the Yrys [YOUR-is] sausages.
In Russia, we are creating ecologically sustainable businesses in the Russia Far East and Siberia by helping associations that promote non-timber forest products - we’re helping small businessmen and women collect, process, package and market renewable forest products like honey, mushrooms, and berries.
We are helping members of these associations develop business plans and marketing strategies, share business experience, develop new product lines, and implement recycling programs - all of which help preserve the vast forest ecosystems in Russia.
But creating a friendly business environment, extending credit, building commercial lending capacity in banks - as important as this is, it is still not enough.
USAID also works to train people in Europe and Eurasia in the nuts and bolts of running a business: how to streamline production processes, and make operations efficient. How to produce a good product and price it so that people will buy it. How to market that product. And how to become, attract, and keep good managers.
We do this all, amazingly, with a team of volunteers chosen from thousands of businesses all across America. As they say, it takes one to know one. So we ask experienced businesspeople to help their novice counterparts in our region.
We recruit accountants, CEOs, marketers, and thousands of other professionals, all of whom agree to take time off work and spend one, two, or more weeks in our region to share their experiences with their counterparts in Europe and Eurasia.
And here again, we’ve had some amazing successes: in Romania, for example, firms have reported an 80 percent increase in profits on average after receiving help from USAID-supported organizations.
In fact, USAID does a hundred other things that directly or indirectly help businesses grow and prosper in the E&E region: from helping small firms improve inventory control to creating business associations to helping parliaments rewrite their tax code.
All this work has one goal: helping business grow and prosper. Of course, we focus on in-country firms, but what’s good for them is good for American companies as well, which is good news for all of us.
Why? Because someday USAID will be gone, and what we hope to leave behind is a sustainable, private business sector that not only produce goods and services of value, but that can provide real jobs to people at good wages.
And because a market where Hungarian or Polish or Russian businesses can thrive is one in which American firms can excel...
...which means more jobs for Americans. In the new global economy, the survival of American business will depend as much on international markets as on domestic ones, and the roughly 415 million people of the E&E region promise to make up a significant part of the new markets of the twenty-first century.
Well, thank you all again for coming. Good luck on your future ventures, and as always, let us know if there is anything USAID can do to help.
Thank you.
This is an archived USAID document retained on this web site as a matter of public record.
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Last Updated on: July 12, 2001 |
