MSc International Business

IB 42 International Business in Emerging Markets Group Project May 16-30, 2012

Kokko Investment Decision into an Emerging Market: Myanmar, Ukraine, Belarus and Mongolia

Group 21 GROUP NAME: 3RD EYE

Marco Dal Sie - CPR: 251089-3185 - Myanmar Md Nazmus Shakib - CPR: 251182-4071 - Ukraine Arsilan Hamid - CPR: 131187-2857 Belarus Domenico Grossi - CPR: 061288-3351 - Mongolia

Contents
Executive summary Introduction1 Myanmar3 Ukraine.14 Belarus..25 Mongolia...36 Conclusion47

Executive summary
We are four students who have been challenged in analysing four different countries in order to suggest to a Swedish company the best location and industry where to invest. In many cases data were quite incomprehensive and unreliable and collecting them was sometimes hard above for some of the economies analysed, Myanmar in particular. Despite this we have surfaced our effort to draw a meticulous solution for the company, which might have been proven a handy and cost effective at the end of the day. While doing our reports we have tried to look on different socio economic aspects which may affect the whole business phenomenon and change our mind-set as a whole, so the report here encapsulates all those relevant matters of a firm behaviour. For example, while considering Myanmar we have always kept the business difficulties in mind though Burma grossly may be seen as an attractive place for investment, and it sensed to us an early call for Myanmar. But things are absolutely on the other edge of the sword when we think of Mongolia, in particular. Being in the middle of worlds two greatest nations, Mongolia yet can splash its unattended business beauties for the investors. For sure we also have been allured to that but we have always kept the basic muscles of economic affair as the yardstick for suitable comparison. In order to reach a final call we have made a matrix, which we call Comparator, an effective tool to get to the decision; we made it and we are pretty much hopeful to plough more money due to our analytical decision.

Introduction
Kokko Investment Inc is a Swedish company willing to broaden its investment horizons. So far the company has concentrated its efforts outside Europe in Brazil, Russia, India and China; however the firm is now considering the possibility to invest USD 20 million either in Belarus, Ukraine, Myanmar, or Mongolia. Our work will focus around these four countries; for each of them we will analyze in depth strengths and weaknesses from different perspectives. We will evaluate the potentials for investors trying to understand whether these countries are promising and attractive for our company or whether the risks outweigh the opportunities that they can offer. Moreover for each country we will highlight an industry in which Kokko Investment should focus, the one that more than others can be profitable and less risky. At the end, after balancing benefits and risks, we will indicate in which country and in which industry the company should focus its efforts. The analysis of each country will be based on a sophisticated PEST framework, an effective tool that will make us able to assess the factors that are more likely to influence businesses performances. We believe that this is the best way to get an overall view of each country making us able to evaluate its attractiveness in the international scenario. Within the PEST framework we will consider political factors, economic factors such as exchange rates and GDP grow, social factors, concerning, for instance, population demographics and education level, and finally technological factors. In addition to the four factors that we have just described we will take into consideration other relevant aspects that we should examine when assessing the possibility to invest in a developing country. Legal factors, such us regulations and FDI legislations, environmental factors and IPR protection are among the points that we will analyse. After having studied each country on the base of the PEST framework subsequently we will consider the leading industries in each country identifying the most promising one in which Kokko Investment Inc should make a step. Finally we will make an overall evaluation of each economy highlighting strengths and weaknesses. Because of the difficult economic period that we are living an increasing number of firms have started looking beyond their borders making considerable steps into emerging economies. This

trend is quickly becoming a requirement for international corporations willing to gain a competitive advantage over competitors or at least to survive in the market. Emerging markets can offer huge opportunities for firms seeking to internationalize and selecting the right market is accordingly fundamental. Developing economies offer in most of the cases high grow, large-size population, cheap labour force, unexploited potentials, abundant natural resources and favourable foreign direct investment legislations. However risks are high as well as in most of the cases developing countries are characterized by political and macroeconomic instability, poor physical infrastructure, lack of well-qualified partners, weak intellectual property rights. Among the others we will focus mainly on political risks, country risks, technological risks, environmental risks and economic risks. Kokko Investment Inc has the chance to choose between two pretty similar Easter European countries, Belarus and Ukraine, Mongolia, a land full of natural resources that is reporting incredibly high grow rates and Myanmar, a country that has recently opened itself after years of isolation. Swedish firms are already investing in Belarus, Ukraine and Mongolia especially in the energy field; no significant steps have been made in Myanmar so far by Swedish corporations mainly because of sanctions imposed by the International Community against Burma. Belarus and Ukraine offers geographical proximity and cultural similarities to Sweden; aspects that have favoured investments making Sweden one of the top ten investors in Ukraine. Mongolia and Myanmar are instead definitely much more far from Sweden not just from a geographical perspective. Psychic distance is high but despite the risks that this implies these two countries hide significant opportunities with an incredibly high abundance of energy resources and a strategic position among growing economies, China in particular. Finally, another aspect that we should take into consideration when considering a Swedish company investing in foreign markets is definitely the fact that Swedish firms are more willing to take risks compared to other countries. Sweden has in fact an extremely low uncertainty avoidance index but, in any case, decisions are taken carefully and with great consideration. Moreover the Swedish one is a short-term orientation culture with companies impatient of reaching results quickly. In the nest paragraphs we will analyse in depth the four countries and our project will end with an overall conclusion in which we will highlight the best option for Kokko Investment Inc.

Myanmar
Untapped Potentials for Global Trade
Openness is a must!

Myanmar
Introduction
Myanmar, also known as Burma, is definitely one of the most interesting and promising Southeast Asian countries. After many years of isolation Myanmar is now slowly opening itself creating the potential for new opportunities and economic changes. After the independence from India in 1948, since 1962 the country has been ruled by a cruel military regime that in the past years has led Myanmar to extreme poverty, economic backwardness, violence and repression of fundamental rights. International sanctions however have pushed the military junta to a slight shift and the country has recently started a series of political and economic reforms, despite the military regime is still holding the power. After many years of reclusion, Aung San Suu Kyi, the opposition leader, was finally released in 2010. Elections were held the 1 April 2012 with Aung San Suu Kyi winning a seat in the countrys house of parliament, definitely a representative sign of the change that the country is experiencing. The country has definitely a strategic position being surrounded by rapidly growing developing countries that are gaining relevant roles in the international scene; India, China and Thailand in particular. Southward Myanmar is bathed by the Bay of Bengal with the advantages that this implies in terms of accessibility, it is a resource- rich country, densely populated and with a great economic potential so far unexploited. Country Analysis In the next section we are going to analyse in depth Myanmar from an economic perspective. First of all we will concentrate our attention around the PEST framework; subsequently we will focus on other factors particularly relevant when taking into consideration the possibility to invest in an emerging country like Myanmar. PEST Framework Being a country governed by a military dictatorship, political factors are obviously widely influencing the countrys economic environment. In the past years the government has definitely not worked in the right direction to boost the Burmese economy and a bad and ineffective

management has almost set to zero the opportunities for an economic improvement lowering the attractiveness of the country. The state is involved, with disappointing results, in all the economic sectors and economic privileges are assigned to a limited number of people loyal to the regime. Monopolies are widely diffused and the state controls the vast majority of the key industries of the country. Accordingly, is not surprising that foreign direct investments have declined considerably in the past years, with China and neighbouring economies being the only relevant investors in the country. Moreover political pressure exerted by the international community, resulting in sanctions, cessation of trade, and embargo actions, has blocked potential investors from focusing on Myanmar increasing even more the isolation of the country. Corruption is widely diffused with the corruption perception index reaching the value of 180 out of 183, making Myanmar the country with the highest rate of corruption after North Korea, Somalia and Afghanistan1. Undeclared work and illegal activities are also widespread. In the past months however the country has started a process of change that includes both political and economic reforms that should relieve the country from isolation making it more attractive in the worldwide scenario. Recent was the announcement of the government to move the Burmese currency to a unified and managed float system, definitely a radical and positive change from the past. As for the economic factors, we will focus our attention around some significant values, in particular economic growth, exchange rates and inflation rates. As we will see in this paragraph, these factors describe a country that does not represent a heaven for investors despite the new economic and political reforms highlight the positive direction that the government is taken. In the 1940-1950s Myanmar was the wealthiest nation in Southeast Asia; things have changed dramatically since that time. Today Burma is the poorest country in South East Asia with 32% of the population living below the poverty line2 and with this percentage increasing year by year. Years of corruption, bad government management, useless economic policies and widespread inefficiency are among the main causes that have led to the difficult economic conditions of the country. Considering the index of economic freedom in 2012 Myanmar ranks 173 out of 1793 highlighting a system not encouraging for foreign investment. Despite economic data about Myanmar are often difficult to gather and unreliable, the GDP grow of the country has definitely registered low grow compared to the other South East Asian economies; 1 http://globaledge.msu.edu/Countries/Burma/Indices 2 https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html 3 http://www.heritage.org/index/ranking

however the trend is positive (see graph below), at least since 2008, with a real grow rate of 5.5% in 2011. The per capita GDP is however extremely low, $1,300 in 2011,4 and this emerges clearly above all when comparing Myanmar with neighbour countries, Thailand, for instance, that reported a GDP equal to $9,700 in the same year.

Graph source: http://www.indexmundi.com/g/g.aspx?v=66&c=bm&l=en

The economy has suffered in the past years by the presence of multiple official exchange rates, a fixed exchange rate system and an overvalued currency. Currency overvaluation is definitely not a positive aspect as it leads to more expensive countrys export, implying a negative impact on international trade. Things however are changing. The government has recently decided to unify its exchange rate and has approved the adoption of a managed float exchange rate system. This shift will lead to considerable improvements; it will create new opportunities and it will help exporters; moreover with a unified floating system it will definitely be more difficult to engage in corruption and illicit behaviour improving the overall attractiveness of the country. In addition to the changes related to the exchange rate system, the government is planning other reforms that should help the Burmese economy reaching a level comparable to the one of the other Southeast Asian countries. A law on foreign investment, for instance, should be approved soon giving investor the possibility to lease land, repatriate profits and hire skilled foreign workers; moreover foreign banks should be soon allowed to operate in the country and a process of

4 https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html

liberalization is starting. Relations with the World Bank and the International Monetary Fund are active again. As for the inflation rate, despite its value is now much smaller than in the past (the inflation rate was equal to almost 33% in 2008), it is still really high (9.6% in 2010)5 collocating Myanmar among the thirty countries with the higher rate of inflation. High inflation is definitely deteriorating for economic grow; consumer prices have risen significantly over the past years making barter a common practice around the country. However the government has stopped the practice of just printing money to reduce its deficit and this, along with the other reforms, is improving considerably the overall economic situation of the country. Considering social factors, Myanmar is definitely an attractive country. With a population of about 54,584,650 inhabitants, Burma is a pretty populated country with a young and well-educated labour force. The literacy rate is equal to 89.9%6 and the average age of its population is about 27 years. The country is slowly moving towards a process of democratization and the new reforms will lead to an improved economical environment characterized by a higher degree of macroeconomic and political stability. In the past years the country has experienced conflicts between different ethnic groups and protests against the regime, most of the times suppressed violently by the Junta; today however the climate within the country is more encouraging. Crime rates are extremely low and the overall level of safety is improving. As for technological factors, Myanmar is definitely not an advanced country from a technological perspective. Infrastructures are extremely poor both considering roadways and rail services. The country has approximately 27,000 km of roads and 5,301 km of railways whose conditions are in many cases difficult. According to the CIA World FactBook, Myanmar has only 3,200 km of paved roads moreover, because of the monsoons, often roads become impassable with extremely negative consequences on economic activities. The country has 76 airports7, however only 39 of them have paved runways and just two of them are open to international flights (Mandalay and Yangon airports). 5 http://www.indexmundi.com/g/r.aspx?c=bm&v=71
6 https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html 7 https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html

Communication is accordingly still difficult within the country and the number of mobile telephone subscribers (594,000 in 2010) and Internet users (110,000 in 2010) is extremely low above all comparing these numbers with the size of the Burmese population. Other factors In addition to the four factors that we have just considered there are other aspects that we should take into consideration when assessing the possibility to invest in a developing country such us Myanmar. The presence of other multinational firms already operating in the country can be without doubts extremely helpful; being the first investing in a new economy can lead to different first-mover advantages but it implies difficulties and risks as well. Moreover if other multinational organizations are already operating in the country potential investors can learn from their actions and mistakes having to face a much easier environment. The big majority of foreign investment in Myanmar comes from neighbouring countries, China in particular. Western economies havent yet made any considerable step into the country mainly because of the imposed sanctions. However as the United States and the European Union have recently announced their intention to suspend sanctions against Burma, as a reward for the political reforms and the process of democratization that the country is experiencing, many different international companies have already announced their willingness to invest in the country. Other aspects that are without doubts relevant are legal factors. So far regulations have been extremely poor but things are changing also concerning this area. As Reuters reports, a new legislation for foreign direct investment is going to be approved soon making the country much more investment-friendly. According to the new legislation foreign companies will be able to invest in the country owning 100% of their business and tax reliefs will be granted even if this applies only on the condition that profits must be reinvested in the business within a year. Foreigners will be permitted to lease land for business objectives and it will be possible to hire foreign skilled workers despite all unskilled workers should be Burmese. Overall objective of the new legislation is accordingly the attraction of foreign investments and the promotion of exports and import substitution.

As for intellectual property rights Myanmar doesnt offer enough protection. Trademark, patent and copyrights low are still extremely poor and their enforcement is inadequate. Despite after joining ASEAN the country promised to enhance its IPR legislation, the country has slightly improved its IPR protection; definitely an area to focus around in order to increase the country reputation abroad. Being part of an international economic organization can represent an extremely constructive and rewarding aspect that can bring to countries favourable inputs and international recognition. In 1997 Myanmar joint the ASEAN (the Association of Southeast Asian Nation), without doubts a positive event for the country despite the admission of the country was largely criticized by Western countries. Economic growth, social progress, cultural development, stability, infrastructure improvement, increasing in living standards and collaboration within its members are some of the main objective of the association. The ASEAN accordingly has worked hard in the past years trying to make Burma following the associations objectives and it is moreover playing a relevant role sustaining the suspension of the international sanctions against the country. According to the ASEAN in fact the lifting of the sanctions will accelerate the process of democratization leading to a faster economic development. Moreover the ASEAN leader have recently approved the Burmese chairmanship of the Association in 2014, a clear sign of the trust South East Asia is giving to Myanmar and to the effort the government is putting in order to reach economical and social improvements. Finally, concerning environmental factors, Burma is a resource-rich land full of unexploited potentials. Petroleum, natural gas, copper, and zinc are just some of the main available resources. The weather of the country is characterized by three seasons with monsoons hitting the country between May and October. Cyclones are not rare, often causing serious damages, making transfers difficult and interrupting economic activities. Industries analysis The following part will focus around the main industries operating in the country. We will highly the grow rate in the most promising sectors identifying where a potential investors should invest its money after accepting the challenge to focus on a country full of unexploited potentials but in the same time risky and instable.

Burma is a resource-rich country full of energy resources, timber and gemstones and with a fertile land for agriculture. As the chart below shows services represented in 2011 the leading economic activity of the country; however things are changing and, according to the Economist Intelligence Unit, as foreign investments are growing, industry will soon become the main sector in the Burmese economy.

Source: Economist Intelligence Unit The mining sector is definitely one of the leading industries in the country with the highest presence of foreign investments, mainly Chinese. Gas and oil are other relevant resources with Russia and Vietnam being the first investors. Real estate, hotel and tourism are promising areas that are growing fast; moreover the country is receiving considerable investments in sectors such as construction, communication and transportation; being a country with only 3,200 Km of paved roads infrastructure is definitely an attractive field. Many international organizations have announced their interest in the country with General Electric Co already discussing with the government for possible infrastructure projects and investment in the health and energy sectors. Despite being full of energy resources Burma is in fact still suffering from energy shortages and frequent blackouts mainly caused by out-dated plants and generators. Accordingly, as the chart in the next page shows, investments are growing faster and faster compared to the stagnation of the past years and, as investment restrictions will be removed, its really likely that this positive trend will not change.

Graph source: http://www.indexmundi.com/g/g.aspx?v=142&c=bm&l=en

Tourism is without doubts another area in which Burma should focus, with the sector reporting a positive trend that is not supposed to change as the country is improving its overall safety and political stability. Tourism has grown dramatically over the past years with the country registering 300,000 tourists8 in 2011, a 30% increase from 2009. With kilometres of unexploited beaches, many different hotel chains such as Starwood and Marriot have already announced their massive investment planes. Pagodas, beaches and the great Burmese hospitality are key ingredients for making Myanmar one of the tops Asiatic destinations within the next years. Most of the industries within the country are underdeveloped and, as the state has played a dominant and authoritarian role in the economy so far, basically all the sectors described above lack of international rivalry and are accordingly pretty attractive; an exception is represented by the mining and energy sectors in which the Chinese plays a relevant role. So far China is the first investor in Burma with investment that jumped from $1 billion in 2008 to $13 billion in 20139 and with kilometres of pipeline already built across Burma to Southwest China. The sanctions against Burma set by the international community have made Myanmar closer to China and this can explain the commitment of Beijing in the country. Most of the Chinese efforts focus around the energy field concerning in particular hydropower energy, oil, gas and mining. Other relevant investors in the energy field are Thailand and India that, because of their serious lack of energy sources, are starting investing massively in the country. 8 http://ajw.asahi.com/article/asia/south_east_asia/AJ201201260018 9 http://www.mizzima.com/business/6436-china-now-no-1-investor-in-burma.html

For a Western company interested in the opportunities that the country can offer, the energy sector should be therefore considered profitable but in the same time pretty challenging having already several competitors that can benefit from a close location and a similar social and economic environment and with Burma being extremely friendly with Beijing. Instead, as the example of General Electric shows, the construction and infrastructure sector can represent without doubts one of the less risky and most promising area where to invest, also for a Western firm with a relative low budget like Kokko Investment. The country lack of a proper system of railways and roadways and, with only 3,200 Km of paved roads, there are huge opportunities in this field. Without having an effective and efficient communication network most of the sectors will suffer with a significant loss of potential. Tourism, for instance, can be a profitable sector where to invest as well; however, without a proper infrastructure system, efforts in this field can be useless. Accordingly, as many observes are predicting a high grow in the Burmese economy, massive investments in roads, railways, airports and other infrastructures are needed and right now there are huge possibilities for international corporations. Moreover once a basic communication network will be created and an increasing number of firms will make a step in the country, there will be a need for offices and constructions and this makes the infrastructure sector promising also on a long term perspective. Conclusions In this last part we are going to assess the overall economic situation of Myanmar. In doing so we will base our conclusion on the strengths and weaknesses trying to understand if the positive factors and the opportunities that the country offers outweigh risks and an instable economic environment. Myanmar is definitely an extremely promising country; with a young and well-educated population, considerable energy resources and a strategic location that should make the country able to obtain soon a central shipping role and a competitive position in international trade. According to many, Burma will fast become the next boom economy in South East Asia. The regime has started a process of democratization, economic reforms and has approved a new legislation in terms of foreign direct investment. The United States, Europe and Australia will suspend sanctions and Japan has recently decided to cancel the countrys debt. As the chart in the next page shows the GDP is growing faster and according to the Economist Intelligence Unit, the real GDP grow will increase from 4.8 % in 2011 to 6.9% in 2016. Fixed investment are increasing at a high rate with an expected grow of 14 % in 2016.

Source: Economist Intelligence Unit Exports will increase as well from 8.2% in 2011 peaking 17.5% in 2016. Many international organization are ready to make a step in the country and representative is the opinion of Jim Rogers, chairman of Rogers Holdings, who recently had announced that he would put all his money in Myanmar if he could. 10 Despite the opportunities that the country can offer, risks for international organization are however still high. According to globalEDGE the country risk is equal to D meaning that the country is still characterized by a high-risk political and economic situation and a difficult and unfriendly business environment. Political risks are still very high; the government has just started a process of reform after years of backwardness, isolation and violence but the political arena remains uncertain with considerable ethnic tensions. The adoption of a float and unified exchange systems has definitely improved the overall macroeconomic environment that, despite this, still remains weak; the banking system is moreover underdeveloped and far from international standards. Infrastructures are poor, moving around the country can be difficult and energy shortage and blackout are not rare. Moreover many international observers have largely criticized the suspension of the international sanctions considering it a premature action that does not take into consideration the reality of the situation and the atrocities still happening in the country. Whether to invest in Myanmar or not is accordingly a challenging decision; if the regime will continue in the democratic direction that has taken then the likelihood that the country will experience an economic boom is really high; however the political environment is still uncertain and unstable and the country lack of solid economic foundations.

10 http://www.bloomberg.com/news/2012-03-27/investors-hesitate-as-frontier-market- myanmar-faces-elections.html

Ukraine
Abundance of Arable lands for fortune making
Institutionalization is a must!

Ukraine a name beyond Chernobyl History repeats-its an ancient tale. Ukraine, in the Soviet Union era has been popularized though a massive failure in the nuclear energy sectors. Is it going to repeat that? Though one of the productive regions of the then Soviet Union, it had not been in the center piece of economic development anytime. It was due to planned economic structure and over dependence on military movements. Well, we are on the verge of a new decade with more advanced economic fragments, ever connectedness to the remote corners of the world, now things have shaped the country as a whole to a new order. Ukraine has chosen a path too. A path has been taken to curb poverty and produce growth for the countrymen yet taking it is not just enough though. Parameter says country moves through a bumpy drive directing to the fractions of the current world trade turmoil regime. Would it be second Chernobyl or will it be the opening of a new economic corridor-hence history will write that. History and culture Looking at the emerging nations in the world, we may see the similarities of transition here. The transition is observed from the economic aspects to touch upon the societal matters as well. Ukraine got its independence in 1991, since then their transformation and history of reforms have been in place. Its been two decade now; from a planned economy to market driven economy, from productive based to export orientation- all these changes have been made during these years. Yet the dependence to Russia has not even been changed a bit. Way too long history in the past made this country a subdued international player in the arena of international trade zone. As a result it has remained a shadow soviet growth and decline as a whole. Government and institutions Two decades has been in the pages of the past, still present days do not seem to be encouraging enough in terms of institutionalization in Ukraine. Its all due to the excessive power instilled in the presidential government system. All executive matters lie in the power of president office. Somehow it does not help democratization rather embodied the system into presidential autocracy. The recent formed govt while they were in the opposition put this thing as a blazing reason for opposing the then govt, but resuming in power they actually did like prodigy of the past

government. Currently, govt has been fighting on the issues like corruption and making legal formalities more pro service centric. But reality differs a mile. A closer look at the Investors environment When we look at the facts of country and their figures we may produce our analysis basing on sophisticated PEST format. Putting a country on the boundary of a model just does not give a holistic idea; as a matter of fact we would cross check on some fundamental issue of the country keeping sophisticated PEST in mind. Starting from the very core of a countrys strength parameter, the economic fundamentals, we may find some decisive numbers for our investment. Since the independence the country has been shaping itself towards a more market centric model than ever before. Initially there was a major hiccup no doubt, but transition takes its way as well, making it far reaching growth attainment in the period of 2001-2006. After a robust 8-year expansion beginning in 2000 that saw real GDP expand 75%, Ukraines economy experienced a sharp slowdown in late 2008, which continued through 2009. After contracting 15.1% in 2009, GDP is estimated to have bounced back only 4.2% in 2010

and is forecast to grow between 4.0% and 4.6% in 2011. Looking at social indicators, the second pillar of looking at the development stage of an economy we find that Ukraine despite having robust growth in the mid 2000, their growth has not delivered enough riches to the people. While only 15% gross growth in this period in per capita income has been achieved but the income increment has not been translated to more consumable DI for the mass since Ukraine has been hit with huge hyperinflation in the consumer prices, leaving less

consumption over all. Figures are quite astounding almost all the growth has been eaten by inflationary pressures in the major food prices since Ukraine masses had to consume most on foods.

Ukraine is heavily exposed to the foreign markets through globalization impact. Both sides of the coins of globalization have now been experienced by Ukraine in the recent past. If we look at trade and investment patterns- we might look at the FDI attractiveness and trade connections since it will give us pivotal directions of the countrys strategic motives for now and for future.

Huge FDI inflows growth observed year on year, making 1/10th of GDPs. This has tremendously gives the outer world an indication that investing in Ukraine sees growth, in other words materializing profit in the short term and long term. But comparing to other countries in the region it is still playing at the under achievement level.

Talking about export and imports we might see a similar picture, where -37% deep in 2009 has surely tells the story of Ukraine and its vulnerability. An economy which has emerged in the early

2000 as an export led country has somehow shows excessive dependency on Russia, eroding their exports and imports in huge numbers for oil imports. Ratio of export growth to import growth has also shown impressive growth on imports rather than exports, putting current account balance negative and in the course of time Hyrvnia may depreciate against the major currencies. Competitiveness may be achieved thus but in the long run it will leave scars on overall economy. Infrastructure and utilities It is therefore an imperative mode for every transitional economies to have conducive factors to do and grow business through efficient & effective infrastructure facilities. Not only the availability in question but also the access to those apparatus, is a concern. Economies like Ukraine, which has a tradition of planned economy are always under the brawl of it. Looking at this bit, we would check three fundamental factors of infrastructure to determine Ukraines attractiveness to investors money. Transportation: in recent estimates it has been found that of the total road networks available in Ukraine 97% are paved and massive 23% YOY growth has been observed during 2010 in goods transportation. It leaves us a choice that Ukraine has been using its transpiration facility at its arms length. Considering this fact and a comparison with other CIS countries would be very crucial at this stage, we believe. Comparison shows a 21% greater capacity of goods transportation within and transiting Ukraine surely sends a positive sign to investors.

Electricity: Access to energy in this era has been a right to all countrymen. Looking at the energy sectors of Ukraine, we may find an effective use of nuclear plant for producing electricity and thus allowing 73% of population access to electricity. This proves an adequacy to use energy for foreign investors. Internet usage: Right to information is not at all a chance now it has become a civil rights. Virtual market is the future. And internet usage make things faster and ever connected in the international trade regime, so looking at the figure would depict peoples participation to digitized version of the trade game in Ukraine. Recent update states that over the last 5 years internet users per thousand have drastically increased, currently standing at 45(2010 statistics). It has actually opened the door of IT related business boom here in Ukraine. Human development Issues: In the 2009 Human Development Report, Ukraine ranked 85th on the HDI, having gone down nine positions from 2005, when it ranked 76th out of 177 countries. Massive improvements in the service sectors lead the easement of long held unemployment issues in Ukraine. According to the International Labour Organization (ILO) data, labour productivity in Ukraine (based on GDP in purchasing power parity(PPP)) was US $ 10,900 in 2007, compared to US $ 63,800 in the United States, US $ 54,900 in France, US $ 42,600 in Germany and US $17,900 in the Russian Federation.

According to statistical data- in 2010 in Ukraine, a total of 4.6 million people (22.9 percent of the total employed population, almost half of employed rural inhabitants and 11.3 percent of employed urban inhabitants) who were employed in the informal sector. These people are not covered by the labor legislation and the countrys social protection system, and this creates barriers to their economic inclusion. Investment opportunities: Industry Analysis Kokko as a company, if has a wish to start up their business venture in Ukraine, several issues needs to be in consideration. Initially, we need to look at the sectors that might be truly competitive in comparison to their home country and then comes the assessment on ROI. Since efficiency is the

name of the game now in the international business climate, Swedish company by its nature may be better off in terms of processing things and channelizing with efficiency driven acts where as Ukraine sounds better off with labour intensive factor productions. As a matter of fact a harmonious match making of both efficiency drives with low cost labour intense solutions may create a fathom market for companies like Kokko investments, let alone pulling out profits and industry first mover advantage. Ukraine as a country may be endowed with the following competitive strengths that could make it quite attractive for investors as in:

Factor Endowments

Huge Arable land

Low cost labour

Highly skilled Labour

Strategic locations

Sectors competitiv eness

Abundance of natural resources with the most arable land in the entire Europe.

One of the low costs to Human capital amongst the emerging nations and of course in the European continent.

Prime dependency of livelihood here on energy driven works and as a result labors are quite skillful.

One of the transit points of big economies like Russia and access to Black sea made it even important in geo political situation.

Agro Business consists of all factor endowments

Specific Industry and access to endowments

Renewable energy sectors

Air craft manufacturing

As shown in the graph above, we may perceive that Agro Business as in-seed to food processing can be a profitable venture for investors. Reason for choosing Agriculture sectors: A validation of choice In todays business phenomena, countries like Ukraine which has both technology and land asks for more global integration so that it can make its mark in the big pitch. And having a climate which is

truly congenial to agriculture production and abundance of Natural areas-Ukraine just needs a fair combination. A business model is just the call of time which can just bridge the gap of Seed to Consume. Substantially, it can easily be adopted through channelizing the $20M of investment in the form of advanced R&D which Kokko already possess. Reasoning for efficient use of abundant Arable land:

Ukraine has more arable land (over 31 million hectares) than any other European country, an abundance of rich, black soil and favorable climatic conditions.

Ukraine is well-positioned to consolidate its leading

role as a grain producer and exporter and to increase the share of processed goods in overall output. Its production costs are estimated to be about 50% lower than those of European producers. Its geographic position guarantees low freight costs for exports to neighboring Western Europe and to growing importers such as Middle-Eastern and African countries. Finally, considerable potential to increase productivity and the availability of unused arable land could contribute to the significant growth of Ukrainian grain commodities output and processed goods production. Sectorial numbers are highly encouraging
The agro-food sector is an important part of

the

Ukrainian

economy.

Agricultural

production accounted for roughly 7% of Ukrainian GDP in 2007, and food processing for roughly 8%. If the industries upstream from agriculture (farm machinery, fertilizer, agricultural chemicals) are added, the agrifood sectors share of GDP in Ukraine approaches 20%. In 2007, 10% of the countrys employed worked in agriculture and food processing, and 32% of the countrys population lived in rural areas.

Location is obvious when choosing an investment

Due to Ukraines relatively low population density, area-based production potential implies export potential. Although incomes have grown rapidly since 2000 increasing domestic demand for food, Ukraine has the capacity to produce much greater volumes of temperate grains, oilseeds and livestock products than its population can consume. Ukraines agricultural export propensity is supported by

additional geographic advantages. The countrys Black Sea harbours remain ice-free year round and provide direct access to world markets. Moreover, Ukraine is close to important agricultural import

markets in the Middle East, the FSU, North Africa and the EU. A business Model: cashing growth on Agriculture Competitiveness However, as agricultural competitiveness is increasingly determined by transformations that take place post-harvest in complex food chains, the importance of natural conditions is declining. Ukraines most important agricultural handicap and the essential constraint to its competitiveness in agriculture is that its endowment of high agro-climatic potential and strategic geographic location is currently not combined with sufficient quantities and qualities of complementary inputs such as a supportive policy framework, human capital, and information and marketing systems. Efficiency-Endowment Business Model Every business Model stands on its input and output behavior in the long run. And the model reaps out benefit once there has been an efficiency matrix webbed into the model. In international arena Kokko can become an efficiency partner importing all state of art technological implants for food processing in Ukraine. While Ukraine on the other hand would stand for giving access to huge and potential arable land. And finally it makes up a sustainable venture. A venture operating in the thrust sector and chances of growth in the worldwide is also immense. The model would be as:

Risk Analysis: Every investment must go through a process of overall risk analysis since all efforts may turn into a futile one, if risk has not been averted. Well, huge land may constitute a window of opportunity for Kokko but simultaneously we may see whether investing in these sectors from foreigners is welcomed by the policy makers or not. It is therefore a major indication. Since agriculture is very contentious issue we might always look up to govt decision regarding this sector. And issue of survival of local producers is also a concern. To put all relevant matters of concern we may suggest adopting a risk meter, creative portion to look into the risk factors of a country.

Risk meter may work as an assessment on different macro and micro issues reflecting the business operations of any individuals or company. It is scaled from 0-10, where 0 means absolutely risky and 10 means risk free. Well, in practice we might not find any country completely risks free.

In analysing risks we are covering the following aspects and find that Ukraine is really risky.

Investment Decision Funnel Doing business in Ukraine from Sweden needs to care for both traditions and culture at the same time. It seems literally impressive as Sweden is one of the major investors in Ukraine(8th largest). Figures are indicative but decisions are somewhat profit centric in the eyes of capitalism. At the end of the tunnel, we see some great factors in Ukraine which might have been proven very much handy for propelling growth for any SME. Again harsh but truth is, this country has not taken initiatives for curbing corruption and sloth processing- which has had eaten at least 10% potentials of its gross output level. $20M investment will ask for a sustainable ROI, and it is very much plausible to get 10% or greater in return if possible changes are made. Therefore appropriation my choice of investment can be muscled with a funnel we call it Investment Consideration Funnel on the basis of

Risk parameter, since swede investment has already been in here, we might hardly find negative resonance in terms of Psychic distance or cultural disorientation. All that Ukraine needs is changes in policy to make things favorable to investments Aligning human capital skills with swede Entrepreneurship know-how, technical skills, and financial literacy, facilitate access to finance through policies to support supply-chain financing, leasing, and insurance to cover against risk and reforming land policies to attract investors-all these may be a win-win for Kokko. It can then leverage the abundance of arable land with a perfect location in Europe and dealing with the greatest Business on Earth; agriculture i.e food that nobody can even deny consuming. And price is an advantage due to cheap labor inputs. History will repeat for Ukraine with growth explosives and writes a new chapter for Kokko.

Belarus
Spot zone for investment
Future is there!

Introduction
In early days Belarus was divided amongst the Soviet Union and a bunch of its neighbours. The country took its shape during the takeover by Soviet Union. In 1991 it gained its independence from the Soviets. It has maintained a close relationship with Russia. The country is not a part of the European Union although it has signed some treaties regarding politic and Economic. Since the election in 1994 the country has been run as a dictatorship. The people of Belarus and the world have expressed its anger over the political system but in vain. In population size and area it is ranks 16th and 13th among all European stats. The country is relatively flat of which 40 per cent is covered by forest and has a lot of marshland. Belarus has the third highest reserves of potassium salt and high reserves of peat. The people of Belarus are highly educated and the country has a good infrastructure.

Pest analysis Political factors

The countrys first president Alyaksandr Lukashenka was elected in 1994 and has been it since. He has used the methods of a dictator to hold the power in his fist. He has extended his period and held unfair elections gaining nearly 80 % of the votes each time. The opposition has been beaten and jailed at his demand11. His undemocratic ways has spread to the rest of the society examples of it are violations on human rights and elimination of press freedom. This has set him in the spotlight on many occasions. Its relationship with many countrys has suffered due to it and notably its relation to the European Union. If one looks at different index it performs very badly. It scores 143 out of 183 on the corruption scale, freedom of press 189 out of 196, index of freedom 153 out of 179, Management Index (Political Leadership Towards Democracy and a Market Economy) 116 out of 128, Status Index (Political and Economic Transformation) 101 out of 128 and ease of doing business 85 out of 183. It results in a poor D. The ease of doing business is the best index which is something the political leaders pursue. In 2008 they started some liberalisation initiatives. Among the initiatives were Simplifying and easing taxation and reporting requirements, Reducing the number of business activities subject to licensing, Liberalisation of pricing regulations and Liberalisation of labour remuneration practices. High tax break are given to firms. They hope to boost the economy, 11 http://globaledge.msu.edu/Countries/Belarus/government

attracting more foreign investment and strengthen the spirit of entrepreneurship. A series of matters has to be considered if one wants to invest in Belarus. Building a good relationship with the government is Alfa and Omega. The government controls everything and only by the acceptance of it a business can be run. It also determines whether our company would compete on a fair basis. Belarus runs a lot of state owned enterprises. In all the industry sectors the government owns 80 % of the companies as the industry sector are favoured by the government. Half of the workforce is occupied in the public sector. This could create some clashes if we invest in an industry in which the government are a competitor. It would make life though as the government would favour its enterprises and make it an uphill battle for us or take us out of business by force. Due to the fact that the law is controlled by the president we would have no other choice than to accept it as a lost investment in such a scenario. Political pressure from Europe would be limited. Belarus has chosen not to engage a lot with the west. Europe is already doing its best to put pressure on Belarus and get it on right track. It seems that Europe and USAs hard work arent delivering satisfying results. The hostile political climate has made the country unattractive for foreign investors. They have low FDI and presence of western companies. Worker Unions are not favoured by the government. It has supressed the worker Unions by brute force. This has some implications which are in fact in favour of our investor. Worker rights create more expenses by higher salary, good working conditions, less working hours and so on. It would save our investor money in this regard. An important matter is the countrys bad relationship with Europe and USA due to Belarus political governance. This leads to high tariffs and trade restriction. It is mirrored in the low exports to those regions. If we invest in Belarus our main export markets would be Russia and the Commonwealth of Independent states (Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan). To sum up the political climate in Belarus is characterized by dictatorship. This implies that we have to see it as a high risk country. Building good relationship with government is necessary. But one should be scared of the political system. The political regime pursues in fact a good business climate and legal protection which can be seen in the index. Ease of doing business index has vastly improved and is now on 62 out of 183. The leading investors are from Austria, Germany, the Netherlands, Russia, Switzerland and the UK. It is primarily European countries. Among the companies who have invested in Belarus are Hewlett Packard, Bosch, Heineken, Coca-Cola, Austria Telecom, Raffeisen Zentralbank and Crowne Plaza. Who are all happy about it and says that western companies should stop seeing Belarus as a shadow of the former Soviet Union. The

country is in fact a modern nation with all the benefits of a developing nation (cheap labour, growing economy, early entrance). The European market is thought of as a great export market if the relation with it gets better. It would also boost the countrys economy as I believe it would be a magnet for foreign direct investment. Due to the nature of the countrys foreign policy your export would primarily go to the CIS countries and Russia.

Social aspect
To cover the social aspect of the PEST analysis I will look at the income distribution, demographic factors, education, social services, openness to foreign and work force capabilities. Its GINI index has been consistently around 28 which are remarkably well. This makes it as one of the most equal country next to the Scandinavian countries. It is in fact performing better than most European countries. The neighbours has a GINI index around 30-45. Its labour participation rate of 55 % is low compared to its neighbours. They have rates around 58-64 except Moldova who are on 40 %. This implies that if Belarus gets it politics right it has the potential to grow even more.
Population growth (annual %) Lithuania World Moldova Belarus Russian Federation Ukraine 2005 -0,62 1,20 -0,24 -0,50 -0,49 -0,73 2006 -0,59 1,19 -0,27 -0,44 -0,46 -0,68 2007 -0,55 1,18 -0,24 -0,31 -0,28 -0,60 2008 -0,52 1,18 -0,19 -1,04 -0,11 -0,54 2009 -0,56 1,17 -0,13 -0,99 -0,07 -0,44 2010 -1,59 1,15 -0,10 -0,18 -0,07 -0,40

Belaruss population has consistently been declining which is bad news. The same is the case for the rest of the region and also Europe. In the country they are afraid of facing the elder burden problem as for instance in Denmark. I will now take a look at the education level of the people. Belarus is a country that value education very high.
Public spending on education, total (% of GDP) Lithuania World Moldova Belarus Russian Federation Ukraine

2005 4,90 4,49 7,16 5,87 3,77 6,06

2006 4,84 4,54 7,50 6,08 3,87 6,21

2007 4,67 4,46 8,29 5,15 5,28

It is among the top spenders in its region. In fact when compared with the world it is slightly above. The high expense tells its story when looking at how well its population is educated. I have taken a look at the numbers for enrolment in primary, secondary and tertiary school. The country is among the tops in its region and is actually performing better year by year.

To sum up on the plus side the country has low poverty level and high education level. It means we can get cheap highly educated labour as the country is middle lower income country. It is cheap because they earn less than half of what is earned in Russia and Lithuania.

Economic situation
To analyse the economic environment I will take a look at the macroeconomic indicators. To facilitate an understanding the numbers they would be compared with its neighbour countries and the world. I will start by taking a look at the GDP per capita to give an idea about the size of the economy.

US$ 15000

GDP Per capita

Belarus World

10000

Ukraine Moldova Lithuania

5000

0 2005 2006 2007 2008 2009 2010

Belarus has a low GDP per Capita. By international standards it is classified as lower middle income. If one compares the country with its neighbours the picture is brighter. It is doing better than Moldova and Ukraine but worse than Lithuania. It has in recent years achieved growth in GDP Per Capita. The same has been the case with Russia and Lithuania as well. These are good signs for Belarus as it leads to increased import demand from the countries. Especially Russias increase in GDP per capita has been important for Belaruss growth as 30 % of all its export ends in Russia. So if we invest in Belarus a good idea would be to consider export business. Huge markets in Russia would be open to us due to the close relationship between the countries. 50 % of GDP comes from the service sector, 30 % from the industry sector and 10 % from the agricultural sector12. To get an idea about the future prospects of the Belarusian economy one needs to take a look at the growth rates it has achieved. Healthy growth rates indicate a good business environment with plenty of opportunities to flourish.

12 http://www.economywatch.com/world_economy/belarus/

percent 15 10 5 0 -5 -10 -15 -20 2005 2006

Growth rates
World Ukraine 2007 2008 2009 2010 Moldova Lithuania

The blue line indicates Belaruss growth in GDP. It has done remarkably well in this regard. It has outdone its neighbours as well as the world average. The recession has slightly dampened the growth but the numbers are still good. Its neighbours are also having good growth rates. They are all above the world average growth rate. This creates some good export opportunities.
inflation Belarus Ukraine Moldova Lithuania Russian Federation 2005 10,34 13,57 11,96 2,66 12,68 2006 7,03 9,06 12,78 3,75 9,68 2007 8,42 12,84 12,37 5,74 9,01 2008 14,84 25,23 12,77 10,93 14,11 209 12,95 15,89 -0,05 4,45 11,65 2010 7,74 9,38 7,40 1,32 6,86

The inflation is measured by the consumer price index. It is much numbers compared to Europe. High inflation seems to be a trend in the region except Lithuania in fact a trend shared by developing nation. The numbers are taken from this month. One has to be careful in interpreting the numbers due to the financial crisis impact on the currency. Since the crisis reached the country it has devalued significantly. It is nice to see the exchange rate for Russian currency, as Russia is the countrys biggest trading partner. You would back the country to have a trade surplus but this is in fact not the case.
Current account balance (% of GDP) Belarus Ukraine Moldova Lithuania Russian Federation 2007 -6,71 -3,69 -15,24 -14,56 5,98 2008 -8,21 -7,09 -16,17 -13,35 6,23 2009 -12,54 -1,48 -8,55 4,68 3,98 2010 -15,20 -2,19 -8,32 1,47 4,75

Belarus has negative balance of payment. It is getting worse year by year. It has by far the poorest balance of payment. We have looked at growth rate, which is very good, and also regarding GDP per capita. The inflation is normal for the region and the currency favourers exports so it seems odd that the balance of payments is negative. The explanation can be found in its trade deficit with Russia. Russia has singlehandedly ruined the countrys balance of payment. With its other trading partners it either has a surplus or a small deficit. But it seems odd that the country imports more than it exports. A good explanation is the countrys lack of natural recourses and its high living standards. High living standards have meant high consumption and imports. It does also imports huge amounts of mineral products for instance oil from Russia. Imports of mineral products are a huge burden post on Belarus balance of payment. In recent time Russia has put custom duties on its exports to Belarus whom it was free of a couple of years ago. This has worsened Belaruss balance of payment and has caused a huge deficit in 2010. Another burdening fact is its low foreign direct investment which in 2010 only amounted to under 5 % of GDP. It has forced the country to take on loans from the financial markets to balance its deficit. To sum up the country is growing fast, have moderate inflation rate but low foreign direct investment. The low FDI and high imports has caused a currency crisis leading to a financial crisis. Overall I would say that the country has a good economy to invest in. It has despite the financial crisis shown positive growth rates and outdone its neighbours.

Technological factors

In this section I will take a look at how well the country is developed. I will start by taking a look at how well the infrastructure of the roads is. Around 90 % of the roads are paved which is very good in fact better than European standards. Regarding the populations use of mobile phones and internet they are a bit behind. This makes it clear for us that it is not a very high-tech society as European countries are. This is clear when one looks at high-tech products exports as percentage of manufactured products which is very low. One good fact is that all these numbers are quickly improving vastly so we should not be scared by the current bad numbers.

Future of the country

The financial crisis has hit the country hard. Even though it is experiencing high growth rates it has problem with inflation and negative balance of payment. To finance its debts it turned towards Europe, IMF and Russia. Russia provided them with loans but on terms. The terms are actually good news. The first term was to devaluate its currency which is why the Belarusian currency are so low. The second term was to privatize some of its state owned enterprises. This move from Russia was not due to its interest in a democratic Belarus but pure business. Russia wanted some of the gas transportation companies to gain a stronger monopolistic status. These steps create a more liberalized business environment and are good sign for future benefits of a possible investment.

Conclusion of the PEST analyses

Based on the PEST analyses I would recommend an investment on economic, technological and social ground and on political grounds I would say maybe. The countrys economy is doing very good among the top performers in its region. It has shown the highest growth rate in the region and kept inflation at a moderate level better than countries surrounding it. Yes it is hit by the financial crisis but who are not. It was actually a currency crises turning into a financial crisis. The currency crisis rose due its political climate closing the country for significant foreign investment. I would actually say that they are handling the crisis very well by showing a positive growth rate while their neighbours had negative growth rate. The countrys close political relationship with Russia and the twelve CIS countries opens up huge markets for our investor and it has only gotten better during the crisis. It has a custom union with Russia and Kazakhstan. Improvements are seen as the government is privatizing some of its state owned enterprises due to pressure from Russia. It ranks really well in ease of doing business which has a high priority on the political agenda. Recent initiatives have been taken to liberalise the business environment. This makes Belarus a very attractive country.

The political climate makes it unethical for one to invest in the country. Its relationship with European Union has reached its bottom. In recent elections the government has violated human rights by imprisoning opposition members and violating in general civil liberties. This has meant sanctions from Europe on officials from Belarus. It has frozen all its assets within EU. In Scandinavia the politic is totally opposite and I dont think any Scandinavian find Belaruss ways appealing. If its relationship with Europe gets better it will become a good place to invest in. It would be an important strategic point between east and west. Then you really want to be the first in the market and establish yourself before others make a run. It is a fast growing economy with few competitors. A change of the political regime is probably not very realistic even though his popularity is very low. Some definite positive aspect about the country is its very highly educated labour force which comes at a low cost. People in the country arent very high-tech but it is improving vastly. The infrastructure is very well developed and they have a huge industry and agricultural base developed during the former Soviet Union.

Sector analysis
In this section I will take a look at which sector to invest in. Since the country is experiencing rapid growth many sectors are profitable to enter. New sectors are also on the rise as the country is modernizing, as an example of this is the IT industry. The country hungers for growth and are doing everything in its power to better the business environment and attract foreign investors. It has setup 6 free economic zones. Some benefits of free economic zone are tax free profits for five years, 50 % discount on VAT and no custom duties on imports of raw materials. Recently it has setup a hightech park to bolster the growth in ITs business. Many foreign firms are in Belarus as independent firms or as join ventures. These firms all has their success stories to tell. Many of them are multinational companies as MAZ, cola, HP and Dell. The key sectors are Manufacturing, Construction, Financial and Professional Services, IT and Telecommunications, Pharmaceuticals, Agriculture, Food and Drink, Tourism, Retail, Transport & Logistics, Petrochemicals and Energy in Belarus. Manufacturing is a candidate as it is excellent in the heady industry and is one of the worlds largest suppliers of mining and quarrying vehicles. It has a very well developed and modern manufacturing sector accompanied with highly skilled workforce. Minsk Tractor Works produces one tenth of the world tractors and MAZ exports buses around the world. As many of the state owned enterprises are being privatized it would be ideal to invest in one of these firms. The construction sector is booming in Belarus. The country has initiated programmes on upgrading transport and logistics infrastructure, meet rising demand for commercial and retail space and build

tens of thousands of new homes. In 2008 the sector rose by 25 % and commercial real estate rose by 18 % making it one of the fastest growing parts of the Belarusian economy. The country has improved the bureaucratic and legislative affairs. It has streamlined and sped up the process to obtain construction permits which has made it better than the likes of OECD average, UK and Australia in time taken. The sectors attractiveness has meant many foreign firms entering the market and bidding for the contracts. The baking sector is also ideal. It is the most liberalised sector and not hit by the financial crisis. This is a great time to enter as the main 4 banks are being privatized. The pharmaceutical sector has grown 6 % higher than the manufacturing sector which shows the potential of the industry. Even though some firms are being privatized the industry still consists mainly of state run companies. Investors from India and Europe have shown interest in buying the state owned enterprises. IT and telecommunications is a very interesting sector. It is gradually building a reputation as a rival to India. It is the highly skilled workforce and low labour cost which makes them competitive. Software development is a major part of the IT sector. 80 % of the software is exported primarily to USA and Europe. It has recently created a High technology Park to boost the sector. Belarus universities are turning 16000 engineers with many having a master in computing technology. Some international firms are in the country as Thomson Reuters, IBM and Hewlett Packard. The telecommunication sector has seen substantial foreign investment but there are still plenty of potential. It is a close race between the banking sector and the IT and telecommunication sector. I will in the next section use a swot analyses to determine in which sector to invest.

Swot analysis
I will know analyse the banking and the IT and Telecommunication industry by the swot analyses. I will start with the It and telecommunication sector. Its strengths are that its a fast growing sector. There arent state controlled enterprises and the political regime wants to attract foreign investors. There are other European and American firms who have successfully established themselves whom one can learn of. The sector is new with not many competitors. Belarus has highly educated labour to challenge India in this sector. It has compared to other sectors also exports to the west. Its weaknesses are that one does not know what the future is going to bring. It could be that Belarus arent able to challenge India. The opportunities of the sector are many. If the countrys relationship gets better with the European Union exports could multiply. If India chooses to invest in Belarus it would create a more vibrant industry. The government favours this industry and our investors would benefit from it. Threats could come from the entrance of state owned enterprise in the sector.

The government would definitely favour its state owned enterprises and our firm would then risk losing market shares. I will now analyse the banking sector. Strengths are huge demand for capital due to the countrys growth, the most liberalised sector, privatization of the state owned enterprises making competition fairer, presents of other foreign investors and the banking sector is in its early stages which means huge growth potential and low competition. Weaknesses could be the legal system. What are the chances of getting ones loans back?. Opportunities are that other sectors growth would affect our business positively and as we have seen the country has demonstrated high growth rates with the sectors growing. Threats are if the government cancels the privatization of its state owned enterprises making it difficult for companies to do business. I would recommend the IT and Telecommunication business. It is a more risk free investment with more apparent strengths as the opportunities to grow and its huge export markets.

Conclusion
At the beginning of the paper Belarus appeared as a shadow of the former Soviet Union. What amazed me was the highly educated labour force, good infrastructure, ease of doing business, the political regimes eager to attract foreign direct investment and the stabilized and growing economy of the country. The political situation is still unstable however the overall business climate is pretty healthy and the opportunities to grow domestic and by export are increasing.

Mongolia
Land of immense opportunities and growth

Future breathes now here!

Introduction
Located landlocked between Russia and China, Mongolia represents something different compared to the other two countries. First of all, Mongolia brings to mind the times when the Mongols were feared for their peculiar ability to fight. This is the main reason why they had the largest empire ever known to mankind. Mongolian situation, nowadays, denotes a country of more or less the size of Texas with a peaceful population. Non-including the capital city, Ulaanbaatar, Mongolian population density is extremely low with half a person per square kilometre (less than one person a square mile). In the last century Mongolian population had to face the Communist situation, but when in 1990 Mongolia became a democracy it happened that many people left the town and cooperatives and went herding again. But the situation nowadays represents a nation with people non more nomadic but that live a life like us; and an important factor is the encouraging of the economic growth while the elections of 2004 shows up that democracy is the strength for the country with focus on social welfare and public order priorities, good points in order to modernize the economy. Mongolias situation will be analysed better in the next paragraphs: first of all considering the PEST framework of the country and then the attention will be exposed on the intellectual property rights paragraph that could be important in order to get an overall idea about the possibilities to invest in Mongolia. Furthermore there will be shown an analysis of an industry that is very relevant facing the amount of the investment. In the end, the conclusions with the overall idea that are behind the theoretical and analytical analysis of the industry.

Pest Analysis
Political situation and Government rule Concerning the political aspects of the country, it was evident the Soviet system footprint, until the 1990s, to the Mongolian Government. The only party to be part of the country was the communist one (Mongolian Peoples Revolutionary Party). The key factors were the collectivization of animal husbandry, the introduction of agriculture and the extension of fixed abodes. However, because of the birth of perestroika in Soviet Union and the constitution of the democracy movement in Eastern Europe, Mongolian political situation changed radically. First of all with the first organized opposition group, the Mongolian Democratic Union and the consequently approval of the constitution with the abolition of the MPRP guiding force in the country, the legalization of opposing parties, the creation of a proper legislative body and the constitution of the role of the

president. Historically, in order to maintain independency, sovereign republic and to guarantee a number of rights and freedoms, the new constitution of 1991 reframed the legislative branch of government with the constitution of the State Great Hural (SGH), a unicameral legislature. This new constitution declared that the president would be elected by popular vote instead of the legislature as before. SGH had a lot of powers: enact and amend laws, determine domestic and foreign policy, ratify International agreements, and declare a state of emergency. The president, furthermore, is the head of state, commander in chief of the armed forces, and head of the National Security Council. A national majority popularly elects him for a 4-year term and limited to two terms. The constitution empowers the president to propose a prime minister, call for the government's dissolution in consultation with the SGH chairman, initiate legislation, veto all or parts of legislation (the SGH can override the veto with a two-thirds majority), and issue decrees, which become effective with the prime minister's signature. In the absence, incapacity, or resignation of the president, the SGH chairman exercises presidential power until inauguration of a newly elected president. The government, headed by the prime minister, has a 4-year term. The prime minister is nominated by the president and confirmed by the SGH. Under constitutional changes made in 2001, the president is required to nominate the prime ministerial candidate proposed by a party or coalition with a majority of members of the SGH. The prime minister chooses a cabinet, subject to SGH approval. Dissolution of the government occurs upon the prime minister's resignation, the simultaneous resignation of half the cabinet, or after an SGH vote for dissolution. Mongolia is a State Party to the entire key UN Human Rights Conventions. In 2001 it was established an independent Human Rights Commission and a substantial support from the UNDP to develop human rights awareness was given to Mongolia. Even if Mongolia has experienced the democratic system with regular and largely free and fair elections, however, as many other transition countries, Mongolia is in front of an increasing governance problems with apparently rising levels of corruption. The corruption perceptions index is of 120 out of 183 (it is slightly high). Belonging among the poorest transition countries and with highly aid dependency, Mongolia has aid contributing 15 to 20 per cent of annual GDP. The two unearned sources of income are privatization and foreign aid, and they appear to be key sources of corruption and related forms of bad governance such as nepotism and favouring insiders. Currently, Mongolias mining sector is set to expand very rapidly and this can turned to be a third major source of corruption. Other elements of the problem are low pay in the public sector (including of the judiciary), a strong politicization of the civil service, and the increasing merger of political and business spheres (rising number of politicians with business interests). Poor governance is widely assumed to contribute to

the problem of high and persistent poverty (since the mid-1990s, around 40 per cent of the population live below the poverty line). A democratic form of government by itself has proven insufficient to counter these emerging governance problems. On the positive side, having a democratic system should give concerned interests parts of Mongolias civil society, parts of the donor community a wider set of opportunities to address the problem of bad governance than would exist under an autocratic or hybrid regime. Economic factors Economic activity in Mongolia has traditionally been based on herding and agriculture, although development of extensive mineral deposits of copper, coal, molybdenum, tin, tungsten, and gold have emerged as a driver of industrial production. Soviet assistance, at its height one-third of GDP, disappeared almost overnight in 1990-91 at the time of the dismantlement of the U.S.S.R., leading to a very deep recession. Economic growth returned due to reform embracing free-market economics and extensive privatization of the formerly state-run economy. Severe winters and summer droughts in 2000-2001 and 2001-2002 resulted in massive livestock die-off and anaemic GDP growth of 1.1% in 2000 and 1% in 2001. This was compounded by falling prices for Mongolia's primary-sector exports and widespread opposition to privatization. Growth improved to 4% in 2002, 5% in 2003, 10.6% in 2004, 6.2% in 2005, and 7.5% in 2006. Because of a boom in the mining sector, Mongolia had high growth rates in 2007 and 2008 (9.9% and 8.9%, respectively). Due to the severe 2009-2010 winter, Mongolia lost 9.7 million animals, or 22% of total livestock. This immediately affected meat prices, which increased twofold; GDP dropped 1.6% in 2009. Growth began anew in 2010, with GDP increasing 25.3% over 2009 as Mongolia emerged from the economic crisis. This is an important point in order to clarify how good Mongolia passed trough the financial crisis of 2008. GDP growth in 2011 was expected to reach 16.4%.

source: the Economist Intelligence Unit

However, inflation continued to erode GDP gains, with an average rate of 12.6% expected in Mongolia at the end of 2011 and higher rates anticipated in 2012 as the government increases transfer and spending programs prior to the June 2012 parliamentary elections. This represents a critical point concerning a possible investment in the country. A part from mining (21.8% of GDP) and agriculture (16% of GDP), dominant industries in the composition of GDP are wholesale and retail trade and service, transportation and storage, and real estate activities. It is evident that Mongolia's economy is keeping to be heavily influenced by its neighbours. For example, Mongolia purchases nearly all of its petroleum products from Russia. China is Mongolia's chief export partner and a main source of the "shadow," or "grey," economy. The grey - largely cash - economy is estimated to be at least one-third the size of the official economy, but actual size is difficult to quantify since the money does not pass through the hands of tax authorities or the banking sector. Remittances from Mongolians working abroad, both legally and illegally, constitute a sizeable portion. Money laundering is growing as an accompanying concern. Mongolia, which joined the World Trade Organization in 1997, is the only member of that organization to not be a participant in a regional trade organization. Mongolia seeks to expand its integration and participation into Asian regional economic and trade regimes. The tourism sector represents also a potential for growth because of Mongolias remoteness and natural beauty. Prior to the onset of the global economic crisis, spiking international commodity prices led to a surge of international interest in investing in Mongolia's minerals sector despite the absence of a policy environment firmly conducive to private investment; the end of the crisis brought a return of the attention of foreign investors. How effectively Mongolia mobilizes private international investment around its comparative advantages (mineral wealth, small population, and proximity to China and its burgeoning markets) will ultimately determine its success in sustaining rapid economic growth. Tax reforms enacted on January 1, 2007 and other mining policies helped government revenues jump 33% in 2007. Meanwhile, major amendments to the minerals law allowed the government to take an equity stake in major new mines. Major development slowed in late 2007 and early 2008 as Mongolia's parliament proved unwilling to move on major deals and declined to reform mining laws that observers said substantially varied from best practices. This frustrated many foreign and domestic investors and others who hoped to see Mongolia's promising mining sector grow rapidly. In 2009, sharp drops in commodity prices and the effects of the global financial crisis began to be felt in Mongolia's economy. The local currency dropped some 40% against the U.S. dollar, and two of the 16 commercial banks were taken into receivership, but a series of quick and effective moves, including a Stand-By Arrangement with the International Monetary Fund (IMF), helped maintain stability and kicked off a broad discussion on fiscal and

financial reforms. That program concluded successfully in late 2010, but both the IMF and World Bank later criticized Mongolia for returning to potentially dangerous pro-cyclical policies in 2011, with fiscal spending likely to rise prior to the 2012 elections. Social factors PEOPLE Life in thinly populated Mongolia has recently become more urbanized. Nearly half of the people live in urban centres, including the capital city, Ulaanbaatar. Semi-nomadic life is still predominating in the countryside, but developed agricultural communities are becoming more common. Mongolia's birth rate is estimated at 25.1 births per 1,000 people (2009 est.). About 58% of the total population is under age 30, 47.8% of whom are under 14 - a very young population Ethnic Mongols account for about 94.43% of Mongolia's population and consist of Khalkha and other groups, all distinguished primarily by dialects of the Mongol language. Mongol is an Altaic language--from the Altaic Mountains of Central Asia, a language family comprising the Turkic, Tungusic, and Mongolic subfamilies--and is related to Turkic (Uzbek, Turkish, and Kazakh), Korean, and, possibly, Japanese. Among ethnic Mongols, the Khalkha comprise about 90% and the remaining 10% include Dorvod, Tuvan, and Buriat Mongols in the north and Dariganga Mongols in the east. Turkic speakers (Kazakhs, Turvins, and Khotans) constitute about 4% of Mongolia's population, and the rest are Tungusic-speakers. Most Russians left the country following the withdrawal of economic aid and collapse of the Soviet Union in 1991. Traditionally, Buddhist Lamaism was the predominant religion. However, it was suppressed under the communist regime until 1990, with only one showcase monastery allowed to remain. Since 1990, as liberalization began, Buddhism has enjoyed a resurgence. About 4 million ethnic Mongols live outside Mongolia; about 3.4 million live in China, mainly in the Inner Mongolia Autonomous Region, and some 500,000 live in Russia, primarily in Buryatia and Kalmykia. HUMAN DEVELOPMENT The main aspect of development of Mongolia is the human development of its people. For stability and prosperity to continue after the first shocks of wealth have happened, the people have to be ready to take on the role of developing beyond mineral wealth (this is concerning the analysis of the industry that will be shown later). Vast increases in technical, engineering, business, and other education programs in the country are, therefore, really important. It would include having training for Mongolians of all backgrounds in how to start and run businesses. Even more important would be for Mongolians to get enough education and training to develop their own technologies and inventions and their own technology and invention systems. Mongolia with all of its wealth should become an ideas creator in the long run, not just an idea borrower. Invention networks will

be the key to very long-term prosperity, not just counting the money and buying machines and ideas from others. Technological factors Concerning the technological factors, of course, it is evident that Mongolia has critical aspects about infrastructure. As mentioned in the CIA World FactBook 49,249 km of roadways (81st position comparison to the world) and just 1,908 km of railways, 46 airports in 2010. International financial institutions have supported Mongolia, the World Bank, the ADB (Asian Development Bank) and others have been actively engaged in providing financing in developing transport infrastructure in the country. However, transport projects cannot be financed by IFIs alone. Financial sustainability of transport projects requires fiscally constrained planning, prioritization, as well as utilization of different financing resources. The key question is how the financial injections into transport projects will be paid back. Capacity of local authorities have to be expanded in terms of financial planning and project execution, there are a number of investment projects in the transport sector proposed by various government agencies. There is a need for prioritizing investments in order to reduce investment plan to adequate levels and utilize other sources of finance. Lack of required legislation for PPP so far has deterred private sector from participation in transport projects. No particular law is in place to stimulate PPP projects in Mongolia, although draft of the law is being prepared for parliament. In order to raise interest from private sector, government has to ease control over ownership of transport infrastructure. This is particularly relevant to railways - mining companies will be the main investors and clients of rail services. Intellectual property rights A famous law firm based in Ulaanbaatar is A&A Global. It introduces legal services for Mining related Foreign and Mongolian companies. It provides, first of all, the organization of Mongolian business entities in order to conduct minerals and petroleum exploration, mine development and mining operations. Furthermore, purchase, sale and transfer of minerals and petroleum companies shares and mining licenses are other factor concerning this law firm. Other aspects are the structure of financial arrangements for mine development and operations, for possible joint ventures and earn-in agreements and a public and private domestic security offerings and stock exchange listings. It is necessary now to provide an idea about this law firm structure. First of all, partners of A&A Global law firm organized as Young Lawyers Senator group in 1997 and have been working together for provide legal consultant and services, support lawyers education and training since 1997. Partners and Advocates of the firm have at least 10 years experience of the Business Law; the

International Law; the Civil Law and Civil Procedure; the Administrative Law and Administrative Procedure; and Criminal Law and Criminal Procedure. A&A Global law firm has opened its branch in Korea and Dr. Lee Dong Kwon, who is one of high ranking lawyers in Korea and a partner of Lee Dong Kwon law firm has been appointed as a Chairman of the Branch. Also A&A Global law firm has signed the Cooperative Agreements with Clifford Chance law firms London office, Allen & Overy law firms Hong Kong office (Clifford Chance and Allen & Overy are ones of the World largest law firms), King & Wood law firm of China, (one of Chinese Largest law firm) USAs Mitchell & Gilleon Lawyers law firm, UKs Berryman law firm and UKs Harrild & Dyer law firm. They have about 20 Partners and provide legal and advisory services in seven key areas: Business services; Property; Private client; Foreign citizen; Civil litigation; Criminal litigation; and, Administrative litigation. Their clients tell them they choose to work with them because they are reassured A&A Global is technically skilled and can provide them with a team of great legal brains. But the clients also tell them that their decisions to use A&A Global for their legal work are as much about how the law firm works with them. How they take time to get to know their objectives, timeframes, issues and ambitions. How they assemble the best team of people to help them achieve their goals. And how they welcome their feedback throughout to ensure we can keep improving our service. Analysis of industry General investments in Mongolia are increasing faster with a FDI growing from 682 in 2008 to 709 in 2009. Natural resources represent the key-field for the country with the mining sector as the most attractive one. Industry suggested: investment in Mongolian gold mines. As explained before in the Economic situation (PEST analysis) the mining sector represents an important point concerning GDP percentage. This is the main reason to suggest this kind of industry for the Kokko investment. It is evident that in the gold mining industry an investment of only 20 million USD is not sufficient. It could be necessary, in fact, an amount of 120-150 million USD. In any case, with this sum it is possible to buy some shares of international firms that are active in Mongolia in this moment. For example in summer 2009 the Mongolian government negotiated an Investment Agreement with Rio Tinto and Ivanhoe Mines to develop the Oyu Tolgoi copper and gold deposit. On August 25, 2009, parliament approved four laws--one repealing the windfall profits tax, one adjusting corporate tax structures to accommodate large-scale projects, and two involving infrastructure--necessary to allow the signing of the deal.

Shown like the largest undeveloped porphyry-copper-gold resource in the world, after more than nine years of negotiations, changes in the law, accusations and demonstrations, the agreement allowing exploitation was finally signed on October 6, 2009. It seems that the whole country, as well as outsiders interested in Mongolia, were waiting for this with the kind of excited anticipation that usually precedes a general election. Oyu Tolgoi has an estimated mine life of 40 years. It is also the largest development project and foreign investment in the history of the country. The capital estimate for the project between now and first ore is $4.6 billion, to be spent over the next three years. To date we have invested around $1 billion, largely on drilling, said Keith Marshall, CEO, Oyu Tolgoi, which is owned 66% by Ivanhoe Mines and 34% by the Mongolian government. Rio Tinto in turn has a considerable stake in Ivanhoe Mines. Ivanhoe and Rio Tinto are supplying the cash and expertise. There can be no doubt that Oyu Tolgoi has brought a lot of positive development to Mongolia: new technology, new skills for the workforce, training and jobs for the local community, new infrastructure and even a completely new method of mining, block caving. Block caving is complex form of underground mining that requires a huge up-front investment to excavate grids of tunnels into the ore body. Given the block mining method to be employed, there are only a few companies in the world which could conduct an operation of this scale in this location, Marshall said. In addition, we have already mined a 1.3-km deep exploration shaft with the help of Redpath of Canada as our chief contractors. Everybody is looking forward to the projects beginning, said Odd Reknes, country manager, Atlas Copco. It is the key to the economic growth of Mongolia. If Ivanhoe, Rio Tinto and the Mongolian government get it right, the Oyu Tolgoi could greatly help the development of both the mining sector and the Mongolian economy in general. Atlas Copco and Rio Tinto have formed an alliance to develop autonomous drilling solutions for surface mining as well as tunneling concepts for underground block cave projects, and for Oyu Tolgoi specifically. Tulguldar Tsogtsaikhan, manager, Micromine in Mongolia, an Australian company providing exploration and mining consulting services for clients around the globe, believes Oyu Tolgoi could benefit the country. It could be a great development for the country providing things are done correctly, Tsogtsaikhan said. What will make it interesting is Oyu Tolgoi wants the best; the best suppliers, the best technology and the best partners. Tsogtsaikhan said this could be difficult for some Mongolian companies as they were brought up under a communist environment when coal was mined to produce energy, not to make a profit.

Some companies have arrived in Mongolia just for this project, such as Major Drilling, whose current operation is focused on Oyu Tolgoi. On the Oyu Tolgoi site, we have been operating nonstop since 2002 even through the cold winter months, said John Ross Davies, country manager, Major Drilling. Despite the harsh winters and language barriers, he hopes to work more with the national companies of Mongolia in the future and continue local training as well as learning from Mongolians. Christian Blunck, country manager, Sandvik, also hopes to become a service provider for Oyu Tolgoi. It is currently the main project in Mongolia and a great drive for us in the long run, but there is a lot of alternative business activity in the service mining sector also. Blunck hopes to firmly establish his company in Mongolia and work with other projects alongside Oyu Tolgoi. Naturally, Oyu Tolgoi faces a lot of criticism and pressure from various social groups in Mongolia. Some do not trust Ivanhoe Mines to operate the biggest project in the history of the country; some are unhappy they are not getting an adequate piece of the pie. Unfortunately, many people in Mongolia believe the foreigners are simply digging money, Mongolian money, from the ground and taking it out of the country. With the help of its shareholders, most critics hope that Oyu Tolgoi will be an example of a well-organized mining operation meeting international standards in Mongolia which will give the local people an opportunity to learn everything they need for future large-scale projects. Conclusions In this last part there will be shown the general strengths and weaknesses of the country with a specific focus on the mining industry. As considered before, Mongolias situation and especially the one analysed in the copper-gold mining industry is very powerful. As explained before the amount of the investment is limited but it could present a good opportunity for a good investment in an emerging market that denotes good remarkable analytical results - the one represented in the Globaledge website such as the Ease of Doing Business Rankings of 58 out of 181; the Index of Economic Freedom 81 out of 179; the Inward FDI Potential Index 71 out of 141; and the astonishing Management Index (considering the Political leadership towards democracy and a market economy) of 34 out of 128. All these positive indices are good results and strengths for the decision of making this investment in Mongolia. Furthermore, other strengths of the country in general are, as it has been evident before, the abundant raw material resources and production startup of colossal mineral resources; also the GDP growth underpinned by demand from China that absorbs 40% of exports; a limited foreign debt and the influx of direct investment are other important factors. Above, it is presented the expected GDP until 2013.

source: Economist Intelligence Unit

Another important factor is the country risk ratings compared to C. This means that the risk is nonhigh compared with other emerging Asiatic countries situations. Of course, Mongolia presents also some weaknesses such as an economic lacking diversification and extremely vulnerable to downturns of raw material prices; manufacturing sector lacking competitiveness; the high poverty compared to 36% and unemployment rates and even the domestic political dissention. Nowadays, in the end, Mongolia is the best choice for mining companies. Mongolia mineral properties are great opportunity to grow our business, and becoming a great medium to earn huge amount of money in small time. That is why its world-class mineral deposits have attracted considerable investment in recent years more than 600 million $ in foreign direct investment in 2010. Coal export values, furthermore, seem on track too more than double from 880 million $ in 2010 to 1.8 billion $ in 2011. This trend will continue, as more mining projects go into production. These companies are also offering consultant services to the mining companies who are investing in Mongolian properties. Gold, copper, iron and tin mines are the number one choice for mining companies. This sector provides great benefit to their customers. Minerals mining companies in Mongolia can grow their business to a large extent and earn huge amount of money. So, if we are interested or we want to invest in Mongolia gold mines, then this is the right time for us. Prices of these properties are increasing day by day, due to its increasing growth. So, this is the right time to invest in gold mines.

Concluding remarks Remarking on the investment in different emerging countries naturally is tedious, cumbersome and to some extent challenging. Four different countries in 2 different continents along with lots of macro and socioeconomic factors allows us to see things in a micro scoping way since its the investment proposal of $20 million, and all that an investor needs protection on the investment and healthy return on it periodically. Putting all the nations in one dice is again a hard task but possible, we know. Well, we the agile team members put all our mental faculties to find out plausible solutions for investment. Will it be Belarus or Mongolia? And/or going to the extreme- can it be Myanmar since it has just opened its windows for merchants or should it be Ukraine, the easiest choice-among the countries. Questions with logic behind investment in all different countries are there in table, but we chose to combine all the inherent strengths and weaknesses of the countries into one definite comparison table. We took a different ride for sure but we knew that doing it might actually create a way for us to introduce a toolkit to investment in any of the countries - as a universal solution. Comparison is a must but we made it universal Comparing on attributes of countries individually is one thing but making comparison as a whole is altogether a different notation. We took that ride and made it universal keeping all the following issues alive in the investment climate; we divided the countries into 7 major different organs and then assess them with 40 indicators. Since we are to make decisions on investing, we
Parameters A. Macroeconomic issues B. Socio economic Issues C. Financials and banking sectors D. Legal aspects E. Market size and firms F. Doing Business Concerns G. Sectors competitiveness Overall Wieghtage 25% 20% 10% 15% 10% 10% 10% 100%

made our choice based on the 7-40 comparators. We have given different weight for different indicators form 0-1 and then assess the nation and its attractiveness to investment and risks. All the data that we used here are reliable. They all are taken from renowned sources like World Bank database, CIA fact book, Doing business index of IFC etc. One thing here should therefore be mentioned that we have had severe concerns on getting data of Myanmar since its not at all available for some parameters.

Comparing on Macro and socio economic issues: From GDP growth to Debt to GDP (%) and employment rate to MDG performance- all these have been taken here as indicators and we put all the data for each of the countries and we find that: According to this parameter, what we have seen is both Belarus and Mongolia has fair chance to be

the investment zone for investors. Record says for them as well, both the countries have enjoyed 6% and above GDP growth even in the turmoil time. While on the other hand Ukraine result is quite shocking here, a major economy in the CIS zone, which was the export led country, has become an import driven countries in these years. Service sectors have risen fairly in Belarus and Ukraine, while Mongolia catches the glimpse with huge FDI growth in the energy sectors. And talking about the risk it is always risky when one investing in Myanmar since they have had a history of closed economy and dictatorial policy. But as the number rightly says both Mongolia and Belarus have been favored with political stability and existence of pro investment policies.

And if we look at the unemployment rate we find both Belarus and Ukraine are at the optimum level. Taking MDG into consideration we may find that Mongolia and Belarus has been doing fine to meet 8 MDG goals in between 2015 where as both Myanmar and Ukraine lacks much. When we

consider the macroeconomic risk on investing in countries like Ukraine and Myanmar we have to be very much concern on the political stability and thus are risky enough; while in the same pitch Mongolia may be slightly better than Belarus. Now if we look into the indicators above we find interesting and thoughtful facts. From the very beginning we have seen there has been a close call between the choice of either Mongolia or Belarus. This is even interesting when we look into the facts of chosen industry facts. We have chosen mining industry for Mongolia and reason for choosing is low cost of labor and abundance of mining opportunities. While we chose IT service outsourcing from Belarus and reason behind is efficient and low cost labor. Although Ukraine case can be interesting in processed agro foods meeting the rising demand of foods in Europe; still investment there is a bleak choice because of the heated corruptions and political instability. Choice of the day Considering all the 40 indicators in 7 different parameters we have the assessment in hand and it says that: Mongolia just slightly better than Belarus in term of overall investment climate and risk. Hence the other two rest aside.

Mongolia has proved to be the choice for today and tomorrow since they are in the perfect geo political position, with enormous natural resources and above all this country is quite

open to the foreign investors. Comparing the corporate tax rate (16% vs. 26% in Belarus) we find a massive indication. Ukraine Belarus

Myanmar

Mongolia

Mongolia has just been able to attract FDIs to their land since it was kind of unchartered for investors. One might easily pins the point that Mongolia is currently at 30-70 usage rate of its economy whereas the flip side is Belarus economy resides at 80-20 usage rate. It reveals great profit potentials for the investors in Mongolia. Quite contrary to the world of fact that Mongolia has offered better support to the investors than Belarus in terms of access to infrastructure- an ever concerning and burning issue for all green field investments.

All the above said facts made us convinced that we would put our coins in Mongolia and hence would advise Kokko to invest and achieve growth.

References introduction
Cuvusgil, Knight, e Riesenberger. International Business . Pearson. http://www.bunews.com.ua/index.php?option=com_content&view=article&id=707:overview- swedish-business-in-ukraine&catid=10:economy&Itemid=4 . http://geert-hofstede.com/sweden.html . http://www.sverigeturism.se/smorgasbord/smorgasbord/industry/business/culture.html

References Myanmar
http://www.indexmundi.com/g/g.aspx?v=118&c=bm&l=en . http://edition.cnn.com/2009/WORLD/asiapcf/07/02/myanmar.sanctions/ . http://globaledge.msu.edu/Countries/Burma/. http://indonesiadefenseanalysis.blogspot.com/2011/03/asean-role-in-myanmar.html. http://news.xinhuanet.com/english/2009-03/18/content_11032577.htm . http://topics.nytimes.com/top/news/international/countriesandterritories/myanmar/index.ht ml . http://travel.state.gov/travel/cis_pa_tw/cis/cis_1077.html . http://www.bloomberg.com/news/2012-04-02/myanmar-s-exchange-rates-mean-more-than- election-results.html . http://www.bloomberg.com/news/2012-04-02/myanmar-s-exchange-rates-mean-more-than- election-results.html. http://www.businessweek.com/news/2012-03-04/myanmar-nearing-currency-float-in-policy- shift . http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1199904/1/.html . http://www.economywatch.com/world_economy/myanmar/export-import.html . http://www.nationsencyclopedia.com/Asia-and-Oceania/Myanmar-INDUSTRY.html#b. http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Burma-Myanmar- INDUSTRY.html . http://www.networkmyanmar.org/economy. http://www.reuters.com/article/2010/02/10/us-myanmar-currency- idUSTRE6191K820100210 . http://www.reuters.com/article/2012/01/25/us-myanmar-economy- idUSTRE80O03720120125 . http://www.reuters.com/article/2012/03/20/us-myanmar-investment-fact- idUSBRE82J0AA20120320 . http://www.scribd.com/doc/37422862/Myanmar-Burma . http://www.searca.org/ajad/archives/v-01/02/ajad_v1_n2_soe.pdf . http://www.thisislondon.co.uk/business/business-news/new-economic-reform-for-burma- 7607737.html . https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html .

References Ukraine
Global competitiveness report 2012, World economic Forum. Global risk report 2012, World economic forum. Country Profile : Ukraine , World Bank 2010. MDG report: Ukraine, 2011. UNDP report: Ukraine 2010. UNCTAD WIR 2011. OECDs Sector competitiveness report on Ukraine 2010. Doing Business: Ukraine report 2012. Ukraine Agriculture Competitiveness report, world bank 2008, report no:44843-UA World economic outlook April 2012. http://databank.worldbank.org/ddp/home.do http://www.ukraine-arabia.ae/investment/competition/ http://www.kmu.gov.ua/control/en http://globaledge.msu.edu/countries/Ukraine

References Belarus
http://country.eiu.com.esc-web.lib.cbs.dk/FileHandler.ashx?issue_id=788768263&mode=pdf http://www.kpmg.com/BY/en/IssuesAndInsights/ArticlesPublications/Press- Releases/Documents/Investment%20in%20Belarus%20WEB.pdf http://globaledge.msu.edu/Countries/Belarus/ http://databank.worldbank.org/ddp/home.do http://www.economywatch.com/world_economy/belarus/ http://www.belarus.by/en/invest/key-sectors-for-investment

References Mongolia
http://www.state.gov/r/pa/ei/bgn/2779.htm#econ http://en.wikipedia.org/wiki/Mongolia http://www.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/country- profile/asia-oceania/mongolia/ http://www.economywatch.com/world_economy/mongolia/structure-of-economy.html https://www.cia.gov/library/publications/the-world-factbook/geos/mg.html http://www.ft.com/intl/cms/s/0/ae613cde-6069-11e1-af75- 00144feabdc0.html#axzz1v2Ekiy6a http://blogs.worldbank.org/eastasiapacific/mongolia-what-are-the-risks-for-an-economy- thats-growing-at-20-percent http://www.standardandpoors.com/ratings/articles/en/us/?articleType=HTML&assetID=1245 330806699 http://www.mongoliaeconomy.com/?cat=7 http://globaledge.msu.edu/Countries/Mongolia/risk

http://www.sed.manchester.ac.uk/research/events/conferences/documents/Redesigning%20T he%20State%20Papers/Fritz.pdf http://www.usaid.gov/mn/library/documents/MongoliaCorruptionAssessmentFinalReport.pdf http://www.associm.com/newsletters/pdf/INFRASTRUCTURE_final.pdf http://blogs.worldbank.org/eastasiapacific/financial-crisis-could-provide-mongolia- opportunity-for-reform http://www.mongolianmineralproperties.com/properties/gold http://ezinearticles.com/?Investment-in-Mongolian-Gold-Mines&id=6899534 http://ezinearticles.com/?Mongolian-Coal-Mining-Companies&id=6985957 http://are.berkeley.edu/~dwrh/Docs/WP_Mongolia_Resources100920.pdf http://www.bakermckenzie.com/files/Publication/6c2c6e96-263f-4ff1-82d8- 329718c366a7/Presentation/PublicationAttachment/24c777ae-04a0-4880-9caf- d391b0ae7995/pn_tokyouraniummining_mongolia_feb10.pdf