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Black Sea Business Day Hosted by BSTDB

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  • Black Sea Business Day Hosted by BSTDB

    The Messenger, Georgia
    June 13 2005

    Black Sea Business Day Hosted by BSTDB
    Business discuss potential - and obstacles - for Black Sea region
    businesses
    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,
    Armenia.

    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
    investments."

    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
    remain."

    "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.
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