85 Partners from the EU, Turkey and the Eastern Partnership countries:

A European Commission initiative, managed by EUROCHAMBRES, implemented by the East Alliance. This project is funded by the European Union

East Invest Regional Strategic sectors

Regional EaP strategic sectors:

Agribusiness (Agricultural sector and Agrifood) Transport and Logistics ICT Tourism Sustainable construction Alternative energy (Renewable energies and Energy efficiency) Textile

Other interesting sectors (investment maps)

Banking Pharmaceuticals Machinery / Automotive

Environmental technologies Mining

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Agribusiness
Some very different agricultural potentials among the EaP countries (area, soils, etc.) A few regional weaknesses and challenges: low productivity, lack of appropriate standards, lack of trade infrastructure, poor logistics services and lack of marketing Export focus: Proximity to the EU and other high demand world export markets

Objectives: Diversification, new export markets

FDI focus: Need for private and foreign investments and partnerships after long term underinvestment

Objectives: Introduction of modern agricultural technologies (agriculture and food processing)

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Agribusiness
Belarus: good potential, a few stateowned farms remain, excessive price controls, undersized companies. Ukraine: the breadbasket of Europe, but the country only produces 22% of the output it could. Farm land leasing.

Moldova: strong competitive advantages but limited market opportunities. Autonomous Trade Preferences (ATP) with the EU.

ICT

Georgia: good growing conditions. Taxes and costs of doing business are lower than most competitors. Main export markets: CIS, EU (Russian embargo).

Azerbaijan: need for market upscaling and diversification to strengthen positions in the traditional products and to promote new, and export more to the EU.

Armenia: only 17% of the countrys land is suitable for farming. Food processing among the countrys priority sectors .

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Transport and Logistics

EaP countries at the crossroads between EU, Asia and the CIS. Transport infrastructure generally needs to be upgraded. A common challenge: improve Transport and Logistics services and in turn increase export competitiveness in several sectors (agribusiness, etc.) Export focus:

Objectives: development of integrated Transport and Logistics services (Warehousing, Transport and Value added services: Packaging, etc.) Objectives: Attract FDI in the Transport sector and develop Transport and Logistics services.
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FDI focus:

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Transport and Logistics

Belarus: good transport infrastructure but the logistics industry is still little developed. Public incentives under preparation. Ukraine: deteriorating road and railway network. 6-9% growth expected in the Logistics sector.

ICT
Moldova: a strategic border between the EU and Eastern Europe. Development of transport and logistics seen as a key issue but still no national policy in line with the EU.

Georgia: need to upgrade road infrastructure. Attractive legislation on free industrial zone to develop trade-transit activities.

Azerbaijan: need to upgrade roadways and railways and to develop multimodal transport. No integrated trade and transport facilitation strategy.

Armenia: a landlocked country, need to upgrade infrastructure and to develop logistics services. Strategy to foster private sector participation under preparation.

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ICT
Two major subsectors: Telecoms and IT services Telecoms: FDI focus

An emerging to mature market in the EaP countries: Privatisation and liberalisation underway or achieved Objective: Privatisation of remaining state-owned companies Competitive advantages: Skilled workforce, low labour costs, proximity to the EU market Objectives: Development of outsourcing + attraction of foreign companies

IT services (software): Export focus mainly

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ICT
Belarus: FDI in the emerging telecoms markets. Software development and outsourcing developing fast: leading position fort IT export revenue per capita.

Ukraine: 38th top destination for outsourcing activities. No national strategy. IT exports growing better than sales in the domestic market.

Georgia: ICT well developing, some success stories. IT zones created. The country now aims at attracting big names.

Moldova: one of the most dynamically developing sectors of the economy. Growth below potential due to dominant state monopoly.

ICT

Azerbaijan: sector in strong rise but export are still insignificant. National strategy 2003-2012, need for a properly enforced, international standard, legislative framework.

Armenia: a technology oriented economy, aiming at becoming a regional ICT hub. 67% of IT companies are export oriented.

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Tourism
The EaP countries do not stand among the worlds tourism destination despite rich cultural and natural tourism resources Challenges: lack of infrastructure, poor quality of services, lack of marketing, difficulty of access FDI focus:

Greenfield real estate projects

Development of tourism services, especially in added value products and niches market: cultural tourism, agro-tourism, spa and health care tourism, etc.

Export focus:

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Tourism
Belarus: An untapped potential. World Hockey Championship in 2014 in Minsk. A number of measures to be taken in the next 5 years. Ukraine: 21 million tourists in 2010 (ranks 12th in the world). Need to upgrade the tourism infrastructure.

Moldova: Very limited tourist arrivals. Additional incentives are needed to attract investment.

ICT

Georgia: Strong potential. 1.5 M tourists in 2009; 3 million expected in 2011.

Azerbaijan: 2011 designated as the Year of Tourism. Elite tourism as preferred option for economic diversification.

Armenia: A growing number of tourist arrivals, 62% from Armenian diaspora. Tourism among top priority sector but low public investment.

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Sustainable construction
Construction boom in most EaP countries during the latter part of the 2000s, but global housing stock generally deteriorating. Significant potential for energy efficiency in the building sector. Challenges: Liberalisation process is still ongoing in several countries (no codification of PPPs, etc.), little support for energy efficiency (EE) and other environmental services. FDI focus: Need for foreign investment to introduce sustainable construction technologies. Export focus: Sustainable construction materials and services.
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Sustainable construction
Belarus: Rising demand in the real estate sector. No land ownership. Guidelines for foreign investors are available. Ukraine: Severe drop in the real estate market in 20082009. Legislative framework for green building under preparation.

Moldova: Young and growing construction sector. Good potential of export of environmentally friendly building materials.

ICT

Georgia: a strong and competitive industry. Need for innovative technologies for EE in buildings and antiseismic buildings.

Azerbaijan: Construction is an investment opportunity for oil revenues. Real estate laws and acquisition of land are very simple.

Armenia: Construction = 30% of Armenias economy in 2009. An elite market with few products for the median or low budgets. New regulation on EE in buildings under definition.

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Alternative Energy
Very different energy mixes in the EaP countries (natural gas resources, nuclear power plants, etc.). Low energy efficiency (EE) and low development of alternative energies Challenges: renewable energy sources are not always competitive. Need for public incentives and adequate regulatory framework:

Energy sector reform: privatisation, realistic energy pricing policy, open and transparent licensing, etc. National strategy to develop renewables, green tariffs, etc.

FDI focus: need for foreign investment to improve EE and develop renewable energy sources.
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Alternative Energy
Belarus: Good potential wood and other biomass sources, wind power and EE but limited movement toward privatisation . Ukraine: Biomass fired CHP, wind and small hydro power plants are competitive.

Moldova: Good potential for biomass mainly, fair conditions for wind and hydro power.

ICT

Georgia: Immense hydro power potential. Other interesting opportunities: solar and geothermal energies.

Azerbaijan: Alternative energy sources can be funded with oil revenues. Good potential for wind power, solar power, small hydro power plants, thermal energy and biomass.

Armenia: Good potential for small hydro power plants, wind power, biomass.

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Textile
A long tradition of production in several EaP countries Raw materials produced: cotton, wool, silk, leather, synthetic fibres Challenges: lack of national strategies, lack of textile clusters, increasing competition from lower cost regions, lack of marketing and sales techniques, etc. Export focus mainly. Objectives:

Outsourcing and subcontracting Modernisation of the textile and garment industry to develop new export markets Establishment of national brands and retail chains

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Textile
Belarus: Manufacture of wearing apparel among the top 25 most competitive manufacturing sectors (WB). Programme of light industry development under preparation. Ukraine: Growing national demand and steady growth of the textile and apparel sector. Tax reductions and other incentives for the light industry companies. Georgia: Textile sector development is recent, a national plan is under preparation. Apparel & textiles outsourcing among the most promising subsectors.

ICT
Moldova: Autonomous Trade Preferences (ATP). Objectives: develop and upgrade textile services from basic CM to CMT and full package.

Azerbaijan: lack of a national strategy. Wool processing, carpet weaving, leather industry among the most promising subsectors.

Armenia: low exports in comparison with other transition economies. Textiles and clothing, carpet, leather, shoes among the most promising subsectors.

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Armenia: Agribusiness
Challenges Only 17% of the country's land is suitable for farming. / objectives Main products: fruit (especially grapes), vegetables, livestock. Objectives: modernisation, enhancement of quality, increase of private and foreign investment. Challenges: low productivity, lack of appropriate standards, lack of trade infrastructure, lack of marketing. Opportuni- Introduction of modern processing and ties packaging technologies. Food processing industry: soft drinks, mineral water, cigarettes, alcohol (wine and brandy), canned fruits and vegetables, milk and dairy products, meat products, etc. Example of investment opportunity promoted by the Ministry of Economy: Fishery Development Project. FDI: $5 m. JV to develop a caviar production project. Planned production volume: 20 tons/yr. Policies projects / Food processing sector among the priority sectors Establishment of Armenian fruits company ($52 million, March 2011)
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Armenia: Transport and Logistics

Challenges Being a landlocked country, Armenia has an economy that depends on / objectives transport and cross-border access. Objectives: rehabilitation and upgrade of railway and road infrastructure, creation of an efficient intermodal transport system and development of logistics infrastructure and services. Challenges: 2 closed borders, severe climate resulting in expansive maintenance of transport networks. Opportuni- Transport Infrastructure Development ties Programme (Transport Strategy 2009-2019): Upgrade of road and railway networks: North South Road Corridor, railroad with Iran, etc. Construction of 2 International Logistic Centres in Yerevan (Zvartnots airport) and Gyumri Terminal. Policies projects / Mechanisms and strategies for private sector participation under preparation. Legislation to promote the development of freight forwarding is needed.
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Armenia: ICT
Challenges ICT among the fastest growing industries. 63% of the output is / objectives exported to over 20 countries. Focus shifted from major manufacturing operations to the software and services segment. Objectives: establish Armenia as a regional ICT hub. Challenges: lack of reliable ICT data is an obstacle for investors. Opportunities Exports of Products and services: micro scheme design, internet services, network systems & communication, applied internet programs FDI: establishment of branches of foreign companies (Russia, EU, USA, etc.) Examples of foreign companies with programming offices in Armenia: CQG (securities trade programs), EPAM Systems (offshore software development), Luxoft (programming and outsourcing), etc.

Policies projects

/ 2001: ICT Development Concept Paper and Action Plan and establishment of the ICT Development Support Council (ITDSC) Information Technology among the DCFTA Priority Sectors (DCFTA is under discussion)
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Armenia: Tourism
Challenges A strong potential. Growing number of tourist arrivals (575,000 in 2009, / objectives i.e. 15-20% of the countrys population). 62% from Armenian diaspora. Objectives: improvement of infrastructure and of quality of services. Challenges: lack of marketing, difficulty of access (expensive flights, visa and departure tax). Opportuni- Hotel sector: construction of new hotels ties Spa resorts, agro tourism, organic hotels, MICE tourism (Meetings, Incentives, Conferencing, Exhibitions) Example of Investment project (Min. of Economy) Jermuk Spa and Ski Resort Master Plan developed by the Swiss company TigerDev Swiss. Greenfield real estate development.

Policies projects

/ Tourism among the top priority sectors but low level of public investment Pro-active support must be given to potential investors

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Armenia: Sustainable construction

Challenges Construction: leading sector of the economy in 2001-2008, now / objectives outpassed by industry. An elite market with few products for the median or low budgets. The country's global housing stock is deteriorating. Objectives: Improve housing conditions and introduce sustainable construction technologies. Challenges: Weak institutional, legal and regulatory framework. Insufficient public support to introduce modern energy-saving. Opportuni- Energy saving technologies: 40% of national energy saving ties potential is in building sector. For instance: Thermal insulation: consumption can be decreased by 30% Municipal Heating and Hot Water Supply (condominiums) Efficient lighting, Modern, efficient windows, etc.

Policies projects

/ UNDP/GEF 2010-2015 project on energy efficiency (EE) in buildings aims at developing a new regulation, providing trainings capacity building and stimulating manufacturing of new EE materials and equipments.
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Armenia : Alternative Energy

Challenges Heavy dependence on imported energy resources, low EE. Electricity / objectives generated by nuclear, hydro-electric and thermal plants. Objectives: development of domestic energy resources including alternative energies (500 MW of grid connected capacity by 2025 targeted for Wind Power), implementation of energy efficiency throughout the economy. Challenges: artificially low electricity rates, lack of financing capital. Opportuni- Small Hydropower: 23% of the annual generation ties still unrealized. Possible combination with CDM projects (EBRD-EIB Multilateral Carbon Credit Fund) Wind Power Biomass Example of project under preparation: Biogas from Chicken Manure and Thermal (Electrical) Energy Generation in Araks Poultry Factory Policies projects / Law on Renewable Energy and Energy Efficiency passed in 2004. Several donors are involved: EU, UN, GIZ, WB/IFC, EBRD, etc.
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Armenia: Textile
Challenges A rich textile tradition. Low exports of textiles, apparel and footwear in / objectives comparison with other transition economies. The CIS countries remain the main export market. Objectives: technological up-grading, increase in productivity, improved marketing and sales techniques, new market entry. Challenges: Overall value added productivity is still very low. Opportuni- Textiles and clothing (fabrics, knitwear, socks): sub-contracting + ties design and production of Armenian products and brands. Carpet: exports to the US and Western European markets. Leather Shoes Policies projects / No tariff or quotas for the large CIS, no quota to US. Privatization of textile companies is still in the process, though more than 75% of the companies have completed this process.

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Azerbaijan: Agribusiness
Challenges Main products: wide variety of fruit and vegetables, meat processing, / objectives dairy products, processing and canning of fruits and vegetables Objectives: increased productivity, market upscaling, diversification, new export markets, increase of private and foreign investment. Challenges: lack of appropriate standards, lack of marketing infrastructure, low productivity.

Opportuni- Agriculture: Meat, cereals, fruit and vegetables, ties medicinal herbs, apiculture, saffron, horticulture, aquaculture, etc. Cultivation of specialised, often rare, crops (PwC 2011). Food processing industry: Tomato paste, fruit juices, packaging and labelling, bakery, meat and dairy products, sunflower oil, olives, mineral and natural water, potatoes, etc.
Policies projects / Export of goods with privileged terms to markets covering 70% of the world import (Generalized System of Preference programmes) Implementation of essentially higher standards of food safety is required to develop exports to EU.
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Azerbaijan: Transport and Logistics

Challenges Azerbaijan well positioned to be a Euro-Asian logistics centre. Modern / objectives air and sea transport infrastructure but underdeveloped roadways and railways. Objectives: Encourage the private sector participation in various segments of the transport sector, Develop multimodal transport and Reduce time spent on export-import and transit operations. Challenges: Liberalisation process still ongoing, no codification of PPPs. Opportuni- Transport Infrastructure: $1.5 billion rail ties restructuring program; highway improvement project , etc. Logistics centres: 7 potential sites identified. Transport and Logistics services. Example of project: new Baku port in Alyat is under preparation with the support of EU funded TRACECA project. Policies projects / Azerbaijan's economic strategy for 2011-2025: priority to the development of air transport, port infrastructure, road and railways. No integrated national trade and transport facilitation strategy
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Azerbaijan: ICT
Challenges ICT sector in strong rise but export are still insignificant. / objectives Telecoms is the 2nd largest recipient of FDI after the oil industry. Objectives: upgrade telecommunications infrastructure, increase exports and partnerships of ICT products and services. Challenges: low penetration of internet services, competition prevented by strong state control. Opportunities Establishment of regional innovation zone (RIZ) Telecommunications sector: Privatisation of state owned enterprises, among which Aztelecom Internationalisation of Azerbaijan IT companies

Policies projects

/ National Strategy on Information and Communication Technologies for Development of the Republic of Azerbaijan (2003-2012) 2009-2012 State programme Electronic Azerbaidjan to develop egovernment services Need for a properly enforced, international standard, legislative framework

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Azerbaijan: Tourism
Challenges A strong potential. 2011 designated as the Year of Tourism. / objectives Objectives: establish a tourism infrastructure within high international requirements; attract domestic and foreign investments; increase the country's tourism competitiveness. Challenges: luxury tourism is hardly compatible with the development of domestic tourism . Opportuni- Hotel sector: construction of new hotels ties Business and cultural tourism, entertainment tourism, rural tourism, spa and health care tourism Success story: Opening of five new five-star hotels in 2011 Policies projects / Tourism as preferred option for economic diversification Azerbaijani Travel Agencies Association created in 2009 Elite tourist destination as top priority: "State Program on the development of tourism in Azerbaijan in the years of 2010-2014" Adoption of a State Program on the Development of Resorts in Azerbaijan (2009-2012)
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Azerbaijan: Sustainable construction

Challenges Boom in the construction sector. Investment opportunity for oil revenues. / objectives Objectives: meet rising demand for residential real estate. 2010 was the Year of environment in Azerbaijan. Challenges: liberalization process still ongoing. Opportunities

Construction services: state-of-the-art construction technology and engineering services, high quality building materials

Example of proposed investment (AzPromo): Baku White City (50,000 residents). JV with ADEC Azerbaijan Development Company

Policies projects

/ Azerbaijan real estate laws and acquisition of land are very simple. Law On the Basics of City Construction: foreigners may engage in construction works only in JV with Azerbaijani legal entities. The planned Zira Zero Island development: A self-contained eco-city, which will rely on wind, solar and wave energy, and be entirely independent of external resources.
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Azerbaijan: Alternative Energy

Challenges State Agency for Alternative and Renewable Energy Resources and / objectives referential conditions for alternative energy are under preparation. Objectives: increase of the use of alternative energies. Challenges: strong dependency on energy development. Opportuni- Good potential for wind power, solar power, small ties hydro power plants, thermal energy and biomass. Examples of investment opportunities (AzPromo): Proposed joint ventures with Azeri companies for several projects: Industrial line of solar modules and collectors, Baku Production of photovoltaic systems, Baku Landfill Gas Recovery and Utilization, Sumgait Policies projects / Industry and Energy Ministry is preparing a program for the development of alternative energies in Azerbaijan until 2020. A special zone will be created for alternative energy projects

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Azerbaijan: Textile
Challenges A long tradition of production, spinning and weaving of cotton and silk. / objectives Raw materials produced: cotton, wool, silk, leather and synthetic fiber. Objectives: develop new export markets, upgrade the textile value chain, attract investments. Challenges: modernization of textile and garment industry (technological innovations, quality management, marketing, etc.)
Opportuni- Production of protective clothing ties Wool processing, Carpet weaving Production of spring beds Leather industry, shoe production

Example of success story: signature of a MoU of economic co-operation for textile industry between Italy and Azerbaijan (April 2010)
Policies projects / Textile and Ready-Made Clothes Association (TRMCA) created in 2009 with the support of the GIZ Lack of a national textile strategy
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Belarus: Agribusiness
Challenges Agriculture: 7.8% of GDP, 10.8% of exports. Main products: potatoes, / objectives cereals, livestock, dairy products, vegetable, fruits. Objectives: attract FDI, increase exports ($7bn by 2015). Challenges: excessive price controls (milk), undersized companies Opportuni- Privatization of existing state-owned companies, establishment of JV. ties Rape or colza seeds, yeast, margarine, vegetables, Tropical agriculture (chocolate, sugar confectionery), drink industry, etc. Tanned, dressed fur skins. Wood processing. Example of success stories in the Drink industry: Olvi group, Heineken, Coca-Cola Hellenic. Policies projects / Government support to agriculture in Belarus is expected to total 16% in 2011 and will be reduced to 10% by 2016. State Integrated Programme of Potato, Vegetable and Fruit Growing Development for 2011-2015 is under preparation.

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Belarus: Transport and Logistics

Challenges Belarus has an advantageous geographical position. The transport / objectives infrastructure is good but the logistics industry is still under-developed. Objectives: develop the logistics ind. and in turn the agribusiness sector. Challenges: reform of the logistics industry is underway. Opportuni- Transport and logistics firms in the privatisation programme: ties railways, road-building and maintenance companies, shipping lines. Transports: Redevelop the inland water network, Build up a commercial shipping fleet, Upgrade the railway and road networks. Logistics construction projects: 50 areas identified by the logistics state program (including 11 for Beltamozhservice, the largest logistics operator in the country). Example of opportunity: Construction of a new logistics centre for Belgospishcheprom, a cluster of 50 companies aimed at providing state management of the food processing industry. Policies projects / Belarus logistics system development program through 2015. The authorities in Belarus have planned to grant land permits for logistics centres at nominal prices in order to boost the sector.
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Belarus: ICT
Challenges Highly skilled workforce, low labour costs and close proximity to the EU / objectives and USA. Several substantial FDI projects in the Telecoms market, leading position in the world for IT export revenue per capita. Objectives: attract FDI in the emerging telecoms market, increase exports and partnerships for Software development and outsourcing. Challenges: incomplete liberalisation and privatisation process. Opportunities Software development and outsourcing - success stories such as: Epam Systems Hewlett Packard Telecommunications sector: Broadband internet Cable television Mobile phone services

ICT service exports 1993-2009

Policies projects

/ No ownership restrictions on IT firms, good legislative support in the IT sector. Creation of a High Technology Park, HTP Belarus, with special business environment for IT business.
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Belarus: Tourism
Challenges An untapped potential: 120 000 organised tourists in 2010. / objectives Objectives: export of tourist services to be increased by 3.5 times by 2015 (government plan). World Hockey Championship in 2014 in Minsk. Challenges: lack of a well-developed tourist infrastructure and wellcoordinated system of interaction between tourist organisations, lack of information, expensive airlines tickets, visa regime. Opportuni- Hotel sector: construction of new hotels ties + state-owned hotels due to be privatised Agritourism (4 national parks, 97 natural reserves); Walking, cycling, horse riding and water sports; Cultural tourism. Policies projects / Hotel business: new hotels are exempt from profit tax for the first 3 years of operation + a presidential decree under preparation. Agritourism: new national standards have been adopted. A number of measures to be taken within the next five years.

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Belarus: Sustainable Construction

Challenges Boom in the construction sector. Belarus at the cross roads of Russia, / objectives EU, the Baltic and the Black Sea. Objectives: meet rising demand for commercial and retail space and for residential sector, develop green building technologies. Challenges: liberalization process still ongoing, no land ownership, no codification of PPPs. Not many large Belarusian construction companies. Opportuni- Commercial real estate: construction of modern ties retail sites. Residential sector: FDI expected for gvt plans. Example of green technology: straw bale houses Policies projects / Recent reforms: creation of a one-stop shop for property registration, simplified procedure to get construction permits. Guidelines for foreign investors developed by the Ministry of Architecture and Construction.

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Belarus: Alternative Energy

Challenges Strong growth of investment in Alternative energy: +75% annually / objectives during 2004-2009. Good potential for wood and other biomass sources. Objectives: 25% of electricity & heat energy to generated by local fuels and alternative energy sources by 2012. Challenges: artificially low electricity rates, lack of financing capital. Opportuni- Wind Power: several projects are under planning / construction. ties Biomass: Biofuels from Wood and Crop waste; Biogas from animal husbandry wastes. Energy efficiency: conversion of boiler houses into cogeneration plants, applications in the metallurgy sector, etc. Example of success story: development of 100 MW wind park by the German company Enertrag. Policies projects / New law on renewable energy (December 2010): establishment of renewable energy power tariffs. Governmental plan of action for 2011-2015: Energy saving programs, reduction of GDP energy intensity by 2016, support for alternative energy.
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Belarus: Textile
Challenges Belarus ranks 19th in the top exporters of textiles to the EU, and 38th / objectives for clothing (2010). Objectives: boost of exports through the increase of competitiveness and introduction of new technological processes, establishment of JV. Challenges: increased competition at global level, lack of information and marketing. Opportuni- Apparel & textiles outsourcing, fast fashion ties Synthetic fibbers Yarn and knitted products Leather goods Example of success story: The leading global sportswear brand Adidas signed a contract with Belarus based clothing firm Slavyanka in 2010. Policies projects / Abolition of quotas on Belarusian textile exports to the EU in 2009. Program of light industry development for 2011-2015 and until 2020 under preparation: support to the modernisation of the Belarusian textile companies, mainly in the Bellegprom Concern (80% of the sectoral output).
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Georgia: Agribusiness
Challenges Main products: Wine, Mineral waters, Nuts, Diary products, Fruits, Fruit / objectives and Vegetable Juices, Sugar, Grains, Fish, Flour. Objectives: introduce modern technologies & international standards, attract FDI. Challenges: high segmentation of the lands, underdeveloped processing industry.

Opportuni- Hazelnuts: 70% of all Georgian exports to the EU ties in 2009 Food processing industry Organic farming
Example of success stories: Adjara Investment Zone Major investments since 2004: green house farming (40 ha), fisheries, fruit processing and dairy product factories opened with foreign capital. Policies projects / Property tax on small plots of land (less than 5 ha) has been abolished. Agricultural firms pay no VAT, no profit tax and no import duties on equipment.
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Georgia: Transport and Logistics

Challenges Georgia is the transportation hub for the South Caucasus region and / objectives Central Asia. 2 ports on the Black Sea with rail ferry links : Poti and Batumi. Underdeveloped road infrastructure. Objectives: attraction technologically advanced, export oriented, efficiency-seeking foreign direct investment. Challenges: Dependence on other countries for system efficiency, competition to be a logistical hub (Bulgaria, Romania, Turkey, Azerbaijan) Opportuni- Transport infrastructure: port, airport, railway, road. ties Logistics infrastructure: Warehousing and storage facilities. Logistics services, Management expertise for instance in port structure, implementation, and monitoring systems. Policies projects / Free Industrial Zone legislation adopted in 2007 to encourage FDI, to stimulate exports and to develop Georgias international trade-transit activities. Legislation is currently being harmonised with that of the EU.

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Georgia: ICT
Challenges Telecommunications among the fastest developing industries, but the / objectives ICT industry is still under-developed. Objectives: Increased internet usage by stimulating technology-related investments, attraction of big names (HP, Microsoft, Cisco, etc.) Challenges: lack of a formulated policy and not just VAT exemptions, competition with Armenia. Opportuni- Exports: IT services ties FDI: Telecommunications and establishment of branches of foreign companies Example of success Story: 852FREE The Israeli company established a JV with Georgian Defensive Shield Holdings in 2009 to provide telecommunication technologies. Policies projects / Electronic Communications legislation: Licensing requirements have been liberalized Law On Information and Communication Areas: exemption of tax export and after-tax profit from IT companies oversees activities Creation of new IT zones
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Georgia: Tourism
Challenges Strong potential: The New York Times ranked Georgia 6th among 41 / objectives best countries for the tourism destination. More than 1.5 M people visited Georgia in 2009, 2.2 million in 2010. Objectives: 3 million tourist arrivals expected in 2011. Improvement of tourism infrastructure and services. Challenges: Impact of the conflict with Russia (2008), lack of marketing. Opportuni- Real estate: resort and hotel construction ties Health and Spa tourism, Mountain Winter Resorts, Wine & Vineyard Tours, Cultural Tourism, Eco-Tourism, Adventure Tourism, Historical Tours Example of success stories: Marriott, Sheraton, Radisson already present; Intercontinental, Kempinski, Hilton investing. Policies projects / National Tourism Development and Investment Strategy for Georgia (America-Georgia Business Council) Launch of 2 Free Tourism Zones (Kobuleti and Anaklia): preferential terms on licenses for casinos, plot land provided for free as well as multiple utilities (gas, electricity, water).
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Georgia: Sustainable construction

Challenges 40% of annual energy consumption is for residential energy / objectives consumption. A strong and competitive construction industry, vast reserves of natural resources used for the production of construction materials. Objectives: enhance energy efficiency . Challenges: since 2008, the real estate market boom has moderated. Opportuni- Thermal insulation: potential to reduce ties construction costs by 10-15% and residents energy related building expenditures by 45% Innovative technologies and lighter materials such as sandwich panels, which also reduce the impact of earthquakes on a building (Georgia is in a seismically active region)

Policies projects

/ Creation of the Energy Efficiency Centre - EEC (1998) and the Energy Efficiency and Cleaner Production Centre - EECP (2003) The green building sector is supported by the Georgian authorities and several donors: EU, USAID, etc.

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Georgia: Alternative Energy

Challenges Dependency on imported oil and gas. / objectives Objectives: Replacement of Thermal generation and utilization of Hydro and other Renewable resources. Challenges: climate change adaptation (impact on rivers).
Opportunities High Hydro-Power (HP) potential: tenders for BOO projects (+ possible CDM projects). One of the richest countries in solar energy (250-280 sunny days yearly). Geothermal energy. Wind farms. Example of success story: Energo-Pro Georgia, established by its Czech parent company in 2007, now owns 10 HP plants and employs 5,200 employees.

maximum

Policies projects

/ Recent legislation has deregulated and liberalised energy services State Programme Renewable Energies 2008: BOO for HP plants.
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Georgia: Textile
Challenges Textile sector development is recent (2004). Growing number of / objectives countries outsourcing their apparel production to Georgia, especially the EU and Turkey. Objectives: Develop higher value products and increase the amount of Turkish production transferred to Georgian production. Challenges: limited number of Georgian SMEs producing inputs, lack of marketing skills. Opportuni- Establishment of JVs to modernise the Georgian textile sector. ties Development of Georgian brands for domestic and export markets. Production of inputs such as buttons, thread and fabric Example of brands outsourcing their production in Georgia: Marks and Spencer, Puma, Zara, etc. Example of success story: A Georgian-owned factory is getting started in Lilo, emphasising branded apparel for the EU market. Policies projects / Ministry of Economy & Sustainable Development is working on the Textile sector development plan with the support of USAID.
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Moldova: Agribusiness
Challenges 30% of GDP. Strong competitive advantages (black soil and climate). / objectives Main products: vegetables, fruits, sugar beets, sunflower seed, tobacco; beef, milk, wine. Objectives: increase competitiveness and level of investment. Challenges: limited market opportunities, instability of regulations. Opportuni- Farm land leasing, greenfield investments (orchards, ties vineyards, walnuts, vegetable, livestock, etc.) Food processing industry: equipment and technology Organic farming

Example of success story: Sudzucker AG Business Strategies Transform Moldovas Sugar Industry
Policies projects / Moldova benefits from the Autonomous Trade Preferences (ATP), granted by the Member States of the European Union. Need for stable pro-market and pro-trade policies and a national marketing strategy (wine, etc.).

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Moldova: Transport and Logistics

Challenges A strategic border between the EU and Eastern Europe. Deteriorating / objectives transport infrastructure (roads, trucks, railways) imposes additional costs on exporters and importers, especially for agricultural products. Objectives: development of a modern wholesale distribution system, increase of the private sector and foreign involvement. Challenges: slow reform of the transport sector management and financing, poor procurement practices, etc.

Opportuni- Development of transportation services, sorting, storing, packaging ties and marketing to the service level. Construction of modern warehouses. Improvement of transport infrastructure.
Example of success story: Giurgiulesti International Free Port, regional logistics hub (access to road, rail, river, sea), developed by the Moldovan company Danube Logistics, a JV of the Dutch EASEUR and the EBRD. Policies projects / Development of the transport and logistics sector seen as a key issue by the Moldovan government & donors (EU, WB, EBRD, EIB, etc.). Lack of a national transport policy in line with the EU transport policy.
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Moldova: ICT
Challenges ICT among the most dynamically developing subsectors. / objectives Objectives: widen use of ICT services and upgrade of telecom infrastructures through greater involvement of the private sector. Challenges: inefficient telecommunications market, lack of an efficient and transparent government procurement system, unfavorable administrative and fiscal environment. Opportuni- Software development: biggest export oriented potential in the ICT ties sector ICT consulting and outsourcing Microelectronics for the defence industry Example of success story: S&T Mold, a System Integrator in the Moldavian IT market founded in 1995 by S&T System Integration & Technology Distribution AG Austria. Policies projects / ICT Policy White Book drafted by the ICT association (USAID) Lack of a strong and consistent country positioning as an offshoring location for IT services

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Moldova: Tourism
Challenges A rich cultural heritage but very limited tourist arrivals. Moldova ranks / objectives 99 out of 139 in the WEF Travel & Tourism Competitiveness Index 2011. Objectives: increase tourism revenues. Challenges: low quality of the infrastructure and services, higher prices than competitor countries.
Opportuni- Construction of new hotels ties Rural Tourism Wine Tourism Cultural Tourism Health and Beauty Tourism Policies projects / Governmental support and alleviation of tax burden for hotel developers Other incentives for the development of a more favourable business environment are needed

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Moldova: Sustainable construction

Challenges Young and growing real estate development in the country; Rapid / objectives expansion of the construction materials subsector. Most existing real estate is old and depreciated and needs capital renovation. Objectives: develop real estate, introduce new green building technologies. Challenges: poor procurement practices, large informal economy. Opportuni- Environmentally friendly building materials: high demand in Europe ties and future demand potential in the CIS. Energy efficiency in the real estate sector. Example of success story: German construction firm Knauf established an affiliate, SMS Knauf, now a leading Moldovan building materials producer.

Policies projects

/ Legislation on energy efficiency in building is being developed by Moldovan authorities with the support of EBRD.

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Moldova: Alternative Energy

Challenges Moldova is dependent on energy imports for 90% of its consumption, / objectives and energy intensity is around 3 times higher than in the EU. Objectives: Until 2020, increase the share of alternative energies up to 20% of the total energy consumption. Challenges: Legislative and institutional barriers, monopolistic structure of power markets. Opportuni- Wind Power: 1,000 MW estimated potential. ties Hydro power: small hydro construction (Dneister, Prut and Danube) Biomass sources: forestry, agricultural and food industry residues. Solar energy: solar thermal technologies and solar cogeneration. Low-grade thermal energy. Energy efficiency in power and energy, industry, agriculture, municipal and environmental infrastructure, property, etc. Policies projects / Law of renewable energy (2007) sustainable energy action plan launched by EBRD in 2011 in order to improve the environment for sustainable energy investments in various sectors of the Moldovan economy.
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Moldova: Textile
Challenges Garment production among the most dynamic sectors of the economy, / objectives great growth potential. Objectives: develop new export markets, upgrade the textile and apparel value chain to remain competitive in the CM industry (cutting and manufacturing services only). Challenges: increasing competition from lower cost regions, lack of an industry of accessories (buttons, rivets, labels, fusibles, etc.), need for a stronger Moldovan Textile Association.
Opportuni- Establish Moldovan brands and retail chains. ties Develop and upgrade textile services from the basic CM to CMT (manufacturer buys some of the accessories) and Full-Package (manufacturer buys all materials). Example of success story: Moldovan-Italian JV established in 1998, employs more than 250 persons. Policies projects STEAUA-REDS,

/ Easy access to markets under Autonomous Trade Preferences (ATP) Import of material for processing (CM) is exempt of duty and VAT
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Ukraine: Agribusiness
Challenges The breadbasket of Europe. Main products: cereals, sunflower, / objectives vegetables, beef, milk, etc. Objectives: increase of food output (modernisation of agricultural processing, development of logistics and distribution, etc.) Challenges: unfavorable institutional & policy setup, lack of infrastructure. Opportuni- Farm land leasing, greenfield investments ties (meat, cereals, oil, etc.) Food processing industry Organic farming Example of success story: AgroGeneration. French SME founded in 2007. Objective: 100,000 ha cultivated by 2012. The strategy is to put back into cultivation fallow lands and to restructure installations of the former kolkhozes. Policies projects / Land reform under preparation to allow foreigners to buy agricultural land in Ukraine in 2012. Need for a more adequate regulatory framework, compliance with EU regulations .
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Ukraine: Transport and Logistics

Challenges Unique geographical position of Ukraine but insufficient and / objectives deteriorating transport infrastructure (road and railway networks). 6-9% growth of the Logistics sector expected in the coming years, very rapid growth of the 3PL-logistics market (third party logistics provider). Objectives: attract FDI in the transport sector, develop the Logistics sector to improve export competitiveness in several sectors. Challenges: lack of a proper privatization process in the transport sector. Opportuni- Development of Transportation infrastructure: rail, road, ties airport/ground support equipment Development of outsourced logistics: growing demand for integrated services (warehousing, transport and value added services) and increase of the requirements to the service level. Example of success story: DHL opened a new logistics centre near Kiew in April 2011 Policies projects / Need for a need for a proper privatisation process (PPP, etc.) Need for better strategic planning across transport modes.

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Ukraine: ICT
Challenges IT industry: 3% of GDP. The government still plays a dominant role. / objectives Objectives: improve ICT sector competitiveness, attract FDI, increase exports (nearshore / offshore outsourcing) Challenges: lack of a long-term plan and of effective strategy for developing ICT, regulatory situation remains rather uncertain Opportuni- Telecommunications (fixed lines, call for expressions of interest for ties 3G licenses by the end of 2011) Computer software & services: Ukraine ranks 38 in the best destinations for providing outsourcing activities, including IT services and support, contact centers and back-office support (AT Kearney 2011) Example of success story: Austrian private equity firm EPIC acquired a 92.8% stake in state-owned telecoms network Ukrtelecom for US$1.3 billion in March 2011. Policies projects / Need to establish an international standard legal/regulatory framework including a timetable for full liberalisation of the telecoms sector, tariff rebalancing, and a fully functioning independent regulator
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Ukraine: Tourism
Challenges 21 million tourists in 2010, ranks 12th country in the world by the / objectives number of tourists visiting (WTO 2009). European football championship 2012 . Objectives: upgrade the countrys tourism capacity, increase tourism revenues. Challenges: lack of infrastructure, poor marketing Opportuni- Construction of new hotels ties Cultural tourism, green tourism, leisure tourism including winter resorts

Example of success story: Wyndham Hotel (USA) to launch 15 new Ramada Encore hotels by 2018 in Kiev and cities of more than 200.000 inhabitants in team with Ukrainian company DeVision. FDI: $150 million
Policies projects / Governmental support and alleviation of tax burden for hotel developers

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Ukraine: Sustainable Construction

Challenges Dramatic drop in the real estate market in 2008-2009, but the / objectives construction industry could be a regional outperformer in 2011-2012. European football championship 2012 to be hosted by Ukraine and Poland. Objectives: introduction of modern technologies in the construction sector, construction of eco-friendly, energy efficient and comfortable buildings. Challenges: lack of reforms. Opportuni- Introduction of energy-saving technologies into ties municipal housing and utilities (condominiums) Use of sustainable construction materials Example of success story: pilot construction of 5 sandbag homes in Ukraine in 2010. Policies projects / Legislative framework for the development of the country's green building under preparation. Ukrainian construction code includes the norms of thermal insulation.

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Ukraine: Alternative Energy

Challenges Ukraine is among the most energy-intensive economies in the world, / objectives but significant sources of savings are available. Objectives: achieve energy self-sufficiency through energy efficiency and development of alternative energies: +5% by 2015, +10% by 2010. Challenges: energy sector reform is not finished (need for a realistic energy pricing policy, open and transparent licensing, etc.). Opportuni- Most competitive energy technologies: clean coal and gas-turbine ties technologies, energy efficiency (metallurgic industry, etc.) Renewable energy with comparable cost indicators: biomass-fired CHP, wind and small hydro power plants Biomass & solar energy: interesting feed-in tariff Example of success story: preliminary deal signed in February 2011 with an Austrian company to build two wind farm plants in the Ukrainian Carpathians. Policies projects / Energy Strategy of Ukraine until 2030 adopted in 2006, State Environmental Policy Strategy Through 2020 adopted in 2010. Green tariff legislation since 2008, cancellation of customs duties and value added tax for equipment import in 2009.
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Ukraine: Textile
Challenges 2,000 Ukrainian textile SMEs. Ukraine ranks 30th in the top exporters of / objectives textiles to the EU, and 21st for clothing (2010). Growing national demand and steady growth of the textile and apparel sector. Objectives: increase competitiveness, develop products with higher value added than in the cut-and-make scheme. Challenges: lack of marketing and ineffective positioning of Ukrainian companies. Opportuni- Apparel & textiles outsourcing, fast fashion ties Knitwear industry Footwear industry Production of cotton, wool and linen sub-units. Establishment of Ukrainian brands for the local market Policies projects / Business development policies include substantial tax reductions (according to newly-adopted tax code of Ukraine, the light industry enterprises are totally exempt of corporate profit tax, which is 25%) and other incentives.

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