The Messenger, Georgia
June 13 2005

Black Sea Business Day Hosted by BSTDB
Business discuss potential - and obstacles - for Black Sea region
By Messenger Staff

According to the Black Sea Trade and Development Bank (BSTDB), the
Black Sea regional economy is expanding, although further development
demands a more stable investment climate and a wider range of social
services for low income populations.

On June 6 BSTDB hosted the Black Sea Business Day in Yerevan,

An annual event, participants used this year's meeting to explore the
investment potential of the Caucasus, the role of international
institutions, assistance to SME sector development, and financial
sector development.

According to Mustafa Gurtin, the chairman of the board of directors
and president of BSTDB, business prospects in the region are
expanding. He added, however, that the region needs to take steps to
"more liberal agriculture," develop intellectual property rights and
improve access to textile and other commodity markets.

"[The region needs] a more stable investment climate and a wider
social safety net, targeting lower income segments, to ensure that
they are not adversely affected from the process of rapid economic
growth," Gurtin said in his opening remarks.

He underlined that the government should act as a facilitator that
"encourages dynamism of the private sector and structures their
financial systems to make them more attractive for foreign

The BSTDB, which as an authorized capital of approximately USD 1.325
billion, and the Izmirlian Foundation Joint Finance Facility (JFF)
announced the extension of two 5-year USD 425,000 and 500,000 loans
to two Armenian companies: OVAL Ltd and Valletta Ltd.

The financing will support the companies' modernization and expansion
program. OVAL Ltd is Armenia's leading manufacturer of polymer
packages for food products, in particularly in the diary industry.
VALLETTA Ltd. is involved many different aspects of the Armenian
economy; it also conducts business in Georgia and Russia.

In an interview with The Messenger, Gurtin highlighted that
assistance rendered to different countries does not depend on the
amount of shares owned by these countries. The priority is given to
the viability of the projects submitted by the countries - including
regional cooperation which complies with the BSTDB's principles.

Representative of Georgia at the conference included Philip Sigwart,
the CEO of ProCredit Bank. The bank also received a USD 5 million
loan from BSTDB in January this year and is successfully implementing
a SME assisting program in Georgia.

In an interview with The Messenger, Sigwart said the meeting was
primarily a chance to talk shop with businesses and international
donor organizations active in the Black Sea region.

He also praised the BSTDB for "offering an alternative to IFC, EBRD,
with sometimes more flexible conditions."

As for the potential of cross-border economic development in the
Black Sea region, he said this is "very good, but many obstacles

"The main obstacles in the Caucasus region are of political nature,
for Georgia the conflict with Abkhazia and South Ossetia and the
unclear relations with Russia; another major issue is the conflict
between Armenia and Azerbaijan and the closed border between Armenia
and Turkey," Sigwart said, adding, "Other than that a major
impediment are the frequent problems on the border between Georgia
and Azerbaijan. With other countries like Turkey, Ukraine, Bulgaria,
Rumania trade works much smoother."

Georgian Deputy Minister of Finance Lasha Gotsiridze also attended
the meeting. Gotsiridze supported the BSTDB activities in Georgia. He
added that Georgian financial organizations should further promote
cooperation with the bank.

BSTDB is an international financial institution established by
Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova,
Romania, Russia, Turkey, and Ukraine.

Next year the annual meeting will be held in Baku, Azerbaijan.