FORTUNES FROM RED RUBBLE The great new frontier The Russian government is making efforts to turn the ruble into a convertible currency. While a convertible ruble doesn't take care of the bureaucratic maze that awaits a potential investor or entrepreneur, it certainly will make financial transactions and the repatriation of profits a lot easier. The rubble of the Soviet Union holds the key to many great fortunes of the 21st century. Part of that fortune can be yours if you take your future into your own hands. As the economies of the former Soviet empire are teetering on the brink of collapse, incredible opportunities have opened up for fearless entrepreneurs and businesses. Go east, young man That taking advantage of the Soviet fire sale is not only possible to large multinational corporations was proven by modern-day entrepreneur Thomas J. Davis. Mr. Davis is president of Multi Entertainment Holdings Inc. (MEH). At a 1989 film industry trade show in Moscow, Mr. Davis had stumbled upon an archive crammed with full- length, big-production fairy-tale movies produced by Gorky Studios (the Soviet answer to Disney). With a lot of patience and stamina, Mr. Davis and his local associates negotiated a deal with Gorky Studios. They finally obtained the rights to the 24 movies of the Classic Russian Fairy Tale Film Collection back in 1990. This acquisition instantly catapulted MEH to the forefront of the U.S. children's film business. Nearly overnight, the company owned the largest collection of live-action fairy tales in Hollywood. Movies and videos appealing to children ages 3 to 12 translate into a US$3.5 billion market in the United States alone. When renting or purchasing videos, parents and grandparents usually look for wholesome, child-related entertainment. There is certainly nothing more wholesome than the great Slavic folktales. Russian, Czechoslovak, and Polish children's movies also lack the sugar-coated sentimentality that makes their North American counterparts so hard for adults to digest. MEH will market feature-length films to movie theater chains and cable TV, and later the films will appear on videocassettes marketed through supermarkets. The company also is looking at venturing into the animated-cartoon movie market. Connections to a Soviet artist are being established, who even Disney of Hollywood calls the Walt Disney of the Soviet Union. While MEH's North American distribution network seems well-established, we expect the company to target other English-language markets soon. Particularly qualified marketers and distributors in the United Kingdom and Australia/New Zealand should look into cooperation possibilities with MEH. For details, contact Thomas J. Davis Jr., c/o MEH, 14724 Ventura Blvd., Suite 1000, Sherman Oaks, California 91403 USA; tel (818) 783-4223, fax (818) 783-3936. Cherry picking among the ruins The remnants of the Soviet Union abound with similar opportunities for entrepreneurs. The Soviets prided themselves on their range of high-quality youth and children's books. Although many of them carry the ideological ballast of seven decades of Marxism- Leninism, a large section of this market is suited for translation and publication in Western markets. The same goes for art and antique collections. There may be tough restrictions on the export of national treasures. But there are plenty of options for organizers of exhibitions and shows. Treasures could be introduced to the general public that have never been seen before west of the Baltic Sea. Just imagine the possibilities connected with the marketing of unique designs from the former Soviet Union. When our research team visited St. Petersburg, we were struck by that city's wealth of beautiful buildings and statutes. Copies of the best statutes and ornaments could be made and sold as garden and building decorations in the West. The same is true for computer software and academic research. Likewise, CIS schools are desperate for books and magazines in English to meet an increase of English students. This means possibilities for barter deals are available to savvy entrepreneurs. Belarus beauties Belarus, the former republic of Byelorussia, not only boasts the official capital of the CIS, Minsk, but also a computer and micro-electronics industry that played a leading role in the Soviet economy. Minsk was one of the best-established, most important electronics centers of the old U.S.S.R. Apart from electronics, the economy of Belarus relies on agriculture and forestry products. Most companies there are eager to get into contact with Western entrepreneurs and investors. Region of opportunity -- the Baltic With the independence of the Baltic states, Russia no longer has access to important ports and regions of industrial production. With three independent Baltic countries lining up along the Baltic coast, Russia no longer has direct access to the Kaliningrad oblast. Strategically positioned close to Finland and the new economic zone around Leningrad, the Republic of Estonia will benefit both from renewed Western interest in that region and the reform of the Soviet economy. Particularly the Scandinavian countries and Germany have already established a considerable number of working joint ventures with Estonian companies. For Western entrepreneurs with an eye on the European and Soviet market, setting up shop in Estonia combines several advantages. For one, we anticipate that the Baltic states will benefit from favorable export regulations with the EC. This makes them an attractive toehold for non-European manufacturers who balk at the high cost and the bureaucracy involved with setting up business in the EC member states. Entrepreneurs can also take advantage of the established links to the Russian market without the risks of direct involvement in Soviet upheavals. Labor costs in the Baltic states are also considerably lower than in most Western European and reformed East-bloc countries, even though these countries boast a highly skilled workforce. Baltic real estate is still at bargain basement prices We predict that property prices will increase tenfold within the next five years. A beach-front property that goes for US$15,000 these days could easily be worth more than US$150,000 in a few years. Before World War I, Estonia was one of the principal sources of food supply for the St. Petersburg region. Reval (today Tallinn) was one of Russia's main northern outlets to the sea and a seat of considerable industry -- shipbuilding, metallurgical plants, textile mills (particularly around Narva and Tallinn), etc. Modern Estonia still has major industrial facilities for instrument and tool making, electronics and electrical engineering, such as rectifiers for nuclear power plants or radiation-measuring instruments. The traditions of old Estonian handicrafts have been carefully preserved and cultivated. Traditional crafts include the production of rugs, crockery, clothes, toys, jewelry, and glass products. Wood and wood products, such as furniture, still top the export list. For decades, the Soviet national skiing teams used top-of-the-line skis crafted in Estonia. Considering the amount of gold medals won by Soviet skiers over the years, a solid marketing argument would come free of charge with any import/export business involving Estonian-made winter sports equipment. Another promising opportunity is related to the marketing of Estonian science. We have learned that the Estonian Academy of Science and the Estonian Encyclopedia Publishers are looking for marketers for their English-language reference books, periodicals, and science books. If you are interested in marketing the academic output of some of the oldest and most renowned universities in Eastern Europe, contact Toomas Tiivel, Head of Publishing Department, or Ulo Kaevats, c/o Estonian Academy of Sciences, Estonia Ave. 7, 200 001 Tallinn, Estonia; tel. (7-0142)605152; fax: (7-0142) 445720. At present, the Estonian economy and industrial output still depend heavily on raw materials delivered from Russia, as well on the Russian market. Legislation regarding foreign investment is currently being drafted. Most important, the general legal provisions for foreign investment in Estonia allow foreigners to repatriate their foreign-currency profits, as well as to export their products and services without a license. The property and investments of foreign companies or business partners sharing in a joint venture are protected by the Republic of Estonia. Corrupt comrades Doing business behind the former Iron Curtain involves certain risks as well as great opportunity. Western entrepreneurs wishing to do business with former East bloc companies should keep in mind that most of their partners will be only marginally acquainted with standard business concepts. (Not knowing what anything really costs, for example, is one of the legacies of 70 years of communist rule.) Be aware that former communists often still occupy key functions on the upper management levels. Corruption and nepotism are thriving. One popular practice is for former party officials to set up a company for the purpose of buying up state assets (which they themselves or an ex-comrade control) at bargain-basement prices. These assets are then resold at a handsome profit. We have no reason to believe that any of the enterprises appearing below are anything but completely trustworthy. But sharks and shysters abound in all societies. So remember not to disregard your well-developed business instincts just because you're in a foreign country. A skeptic may miss out on an occasional opportunity. But he is also far less likely to get taken in. Another more technical problem is the terrible telecommunications system, which makes any phone call from a Western country an ordeal of patience. To call any place in the Soviet Union or the Baltic states, you have to use the international operator. And it may take many attempts to get through. For more information on entrepreneurship and joint venture opportunities in Estonia, you should contact the Estonian State Department of Foreign Economic Relations, Komsomoli 1, Tallinn 200 100, Estonia; tel. (7-0142) 683-583 (Mr. Urva), 683-428 (Mr.Veer). One other way to find partners would be to advertise in the Estonian-language business periodical Aripaev, which also runs English-language classifieds and ads. Ad rates run from US$33 for 1/8 column to US$1,500 for a 1/1 bleed page. In Scandinavia, a one- year subscription to Aripaev costs US$80. The paper presently has no subscribers in other foreign countries. For more information, contact Mr. A. Raudberg, Raua 1A, 200 010 Tallinn, Estonia; tel. (7-0142)431201, fax: (7-0142)426700. Advertising to entrepreneurs in Eastern Europe For entrepreneurs without large travel and advertising budgets, it is still difficult to market goods and services in Eastern Europe. However, we have discovered a group of enterprising Americans who are out to fill just this niche. Thomas F. Bates and William B. Guthrie of Bayview, Idaho, are the publishers of Profit International, a magazine entirely devoted to doing business in the former East bloc. Bates, a former teacher of philosophy and English at the University of Colorado, had once been an editor for Soldier of Fortune magazine. While doing graduate work at the Universitat Regensburg, Germany, he ran an underground railroad to smuggle Czechoslovakians into the West via a secret mountain pass. William Guthrie, also a former professor of English at U.C., holds a doctorate in comparative literature, and had extensive experience as a researcher and writer for financial consulting firms. The trial edition of Profit International magazine sold rapidly. According to reports from our Eastern European sources, business circles in Prague were buzzing with excitement for days over the first issue, which was printed in English and Czech. The magazine's commercial launch will aim at six major language groups, including Russian, Hungarian, Rumanian, Czech, Lithuanian, and Polish. All will be printed bilingually, including English-language text. To avoid costly and complicated currency transactions and taxation issues, the publishers "loaned" the computer disk with the magazine copy to East European printers/distributors subject to single- country exclusive contracts. The printer would retain any profits from the sale of the magazine, while the U.S. publishers derived their revenue from U.S. dollar-denominated advertisement fees. Profit International focuses on how to set up and run small private businesses in Eastern Europe. The magazine specifically targets small entrepreneurs in the formerly communist countries. If you wish to advertise goods or services to a wide readership of Eastern European entrepreneurs, Profit International is an excellent vehicle to market to a select group of reform-minded Eastern European businesses. For more information on publication dates and advertising conditions and rates, we suggest you contact Thomas Bates or William Guthrie, c/o Profit Business Publishing Inc., P. O. Box 490, Bayview, Idaho 83803 U.S.A.; tel. (208) 683-3193; fax (208) 683-3236 Don't miss Saigon With the former Soviet Union staggering toward a free market economy, South Africa forswearing apartheid, and capitalism booming in China's Pearl River delta, there are only a few countries left for the intrepid entrepreneur to conquer. One is Vietnam. (As a U.S. citizen, a U.S. corporation, a permanent resident of the United States, or the foreign subsidiary of a U.S. firm, you are still not allowed to establish business relations with either of these countries. If you do, you may be liable for up to US$500,000 in fines, or even imprisonment.) Assuming you are not a U.S. citizen or resident, you can start now. If you are American, you can start preparing, as it appears quite likely that the restrictions will be removed early in the Clinton administration. But the collapse of communism has also undermined the last strongholds of Marxist ideology from Havana to Hanoi. While Cubans are subsisting on frugal diets to prop up Castro's Socialist pipe dream, smart investors are setting their sights on Cuba after Castro. Remember how the American hostages in Iran were released right after Ronald Reagan had been elected president in 1980? Before the end of the year, Western investigation teams will probably put an end to rumors relating to American servicemen reportedly held by the Vietnamese for nearly two decades. Already the Clinton administration has been given unprecedented access to records in Vietnam. The most likely scenario will be a bargain under which free access to Vietcong archives and the remains of those dead will be exchanged for a revocation of the trade embargo, thus opening Vietnam to North American investment. Another reason is Japan's expansion into Southeast Asia. Nearly unnoticed by the general public, Japan has quietly invested in its Asian neighbors and is currently holding the lion's share of foreign investment from Korea to Cambodia. To counteract Tokyo's growing clout on the Far Eastern markets, Washington will have to drop self- imposed trade restrictions to capture lost market shares. Moreover, the continued downturn in the Japanese stock market may lead a number of Japanese companies to divest themselves of their foreign assets. This will spark increased overseas bargain shopping by corporate North American investors who then will heavily lobby Congress to open untapped markets like Vietnam. There are also reasons within Vietnam that lead us to expect a change in the general political climate. The country's old rival, China, is successfully experimenting with capitalism. And traditionally, there is one thing Vietnamese fear more than a militarily strong China: a rich China. While Vietnam has successfully beaten back Chinese incursions over the past two decades, chances are that Chinese with open checkbooks are not as likely to be shown the door, considering Vietnam's crippled economy. This means that Hanoi needs a powerful ally against China. And with all its friends in COMECON and the Warsaw Pact gone, chances are that the only partner powerful enough to counterbalance China's growing influence will be the United States. Indeed, a political restructuring inside Vietnam is already under way. Traditionally, Vietnam's political leadership was recruited from the Communist North. This region is desperately poor and produced the country's chief ideologists, among them Ho Chi Minh. (In fact, the old Saigon government in the South used to make much of this fact, arguing that the 1954 partition of the country was simply an acknowledgment of a fact of nature.) After four decades of communism, nearly all of North Vietnam's industry is state-owned and making losses. In the South, however, particularly Ho Chi Minh City (the former and future Saigon), capitalism is continuously building up steam. This is why the Hanoi government is doing its best to strengthen ties between the sober North and the Westernized South. Not only is there the ever-present fear of being swallowed up by China, but the North also needs tax revenues from the South to maintain its disintegrating infrastructure. The ideological turn from Communist severity toward a market economy is reflected in the present Vietnamese government. While Do Muoi, the head of the ruling Communist Party, is a Northerner from head to toe, prime minister Vo Van Kiet and his deputy Phan Van Khai are Southerners, who are desperately trying to speed up economic reforms by attempting to transfer the South's market economy to the North. As a result, Vietnam adopted a constitution in mid-April 1992, under which the right to private property is guaranteed. Foreign investors have been granted nearly 400 licenses to invest about US$3 billion in Vietnam. Three-quarters of this money will be invested in Saigon and its immediate environment. With a GNP per capita of only US$180, Vietnam ranks among the poorest countries in the world. Agriculture (with rice as the main crop) currently employs about 70% of Vietnam's work force. The country also possesses large deposits of coal, iron ore, bauxite, manganese, and titanium, as well as some of the world's greatest reserves of phosphates. Although Japanese companies in particular have started to develop Vietnam, most of the country's natural resources remain widely untapped. Vietnam's heavy industry, severely damaged during the war and since then mismanaged by incompetent bureaucrats, thus far has not been able to exploit its natural wealth. About 10% of Vietnam's work force is engaged in industry, half of which is small-scale. Food processing and textile manufacturing are the main industries. Westerners who want to set up shop in Vietnam still have to hire their work force through the respective government agencies and pay salaries at the official government rates (95% of which will go into the coffers of the Vietnamese treasury as permanent commission fees.) Potential investors also have to go through a veritable bureaucratic maze to obtain the required forms and permits. Small businesses will also have to compete against the nepotism that protects the inefficient domestic industry against competitors. We have received reports about a young expatriate Vietnamese who returned to Vietnam and set up a small computer software business in Saigon. At first, his business took off nicely. But one by one, his clients were threatened into returning to the state-run services by industry bureaucrats with links to the Communist government. In spite of its poverty and bungling bureaucrats, however, Vietnam has all the signs of a growth market in the making. In fact, we expect its industry to grow at double-digit rates once trade restrictions have been lifted. The Vietnamese are highly motivated to work for foreign companies. Many still speak English and French fluently, particularly in the South. Brand-name awareness is extraordinarily high, and this manifests itself in illegal imports of Western products, a well- developed smuggling network, and a breathtaking range of homemade imitations and fakes. Considering the poor shape of Vietnamese industry and the legal restrictions that apply to foreign investment, the most profitable form of doing business in Vietnam is by entering into a joint venture agreement. This has several advantages. Your foreign joint venture partner will supply the required property and take care of the work force. You will provide the technology and know-how. (For a backward economy such as Vietnam's, outdated hand-me-down technology will fit the economic realities much better than technology's latest advances.) This means that your foreign venture partner bears all the risks involved with owning property. In case of a Communist crackdown or renationalization, all you would lose is a bunch of outdated equipment. Vietnam is one of the few countries that offer nearly unlimited growth prospects. Shrewd investors focus on targets like this long before the general public becomes aware of the opportunities. Now is the time to research a potential venture in Vietnam. For more information, contact Vietcochamber, 171 Vo Thi Sau St., Third District, Ho Chi Minh City, SR Vietnam; tel. (84-8)30339; fax (84-8)94472. Vietcochamber also has representative offices in Sydney; tel. (61-2)923-1188; Toronto; tel. (416)882-4437; Paris; tel. (33-1) 43872612; Tokyo; tel. (81-3)3668-4788; Singapore; tel. (65)337-3476; London; tel. (44-71) 439-4452; and Washington, D.C.; tel. (202)659-4557. The Kola Peninsula -- Opportunities in Russia The mineral-rich Kola Peninsula region located in northwest Russia has a population of 1.15 million (92% urban). Eighty percent of the population live in a handful of cities along the Murmansk corridor, of which the most important are Murmansk (432,000), Monchegorsk (69,000), Severomorsk (64,000), Kandalaksha (54,000), Kirovsk (50,000) and Apatity (45,000). The climate of the Kola Peninsula is moderated by the Gulf Stream. The average January temperature ranges from -8 to -13 degrees celsius, with snow covering the ground from mid-October to mid-May. For most of its history, the Kola Peninsula was sparsely populated and underdeveloped. But, with Stalin's industrialization drive in the 1930s, the Kola Peninsula became a prime source of mineral supplies to refineries and mineral processing plants all over Russia. Rapid growth and development from the 1930s to the 1960s, however, gave way to stagnation in the 1970s and 1980s as the Soviet command-style economic system collapsed. Forty percent of the Kola Peninsula's gross domestic product comes from mining and mineral processing, 35 percent from food processing, 10 percent from fishing, 10 percent from lumber, and 5 percent from agriculture. Kola Peninsula officials are actively looking for foreign investment as a vehicle for enhancing the area's technological and managerial expertise as well as its hard currency earnings capacity. Many factories in the region are currently operating with outdated technology. Ample investment opportunities exist for companies interested in the available resources and willing to provide credit lines and capital to these factories. The Kola Peninsula's businesses and government are also looking for new foreign trade links. The Russian Government recently designated the Kola Peninsula as a free trade zone, a status held by only a dozen or so regions in the NIS. The free trade zone status enables the Kola government to offer attractive investment terms, tax breaks, and import/export controls to foreign investors. There are approximately 120 industrial firms operating in Kola. About 15 large enterprises, most of which are in the field of minerals and metallurgy, dominate Kola's economy and have the most potential for foreign investors. The Kola Peninsula's excellent transportation links make it attractive to foreign exporters and investors. Several of Russia's largest companies operate out of the city of Murmansk, which houses one of the largest and most modern ports. Murmansk's modern facilities stem from its long-time role as Russia's primary Atlantic naval facility, its largest submarine base, and the headquarters of its Northern Fleet. The declining role of the Russian military, however, has sharply reduced activity and congestion at the port of Murmansk, making it possible for increased business shipments. Another great asset of the Kola Peninsula is the presence of the Apatity branch of the Academy of Sciences. Built to attract specially privileged scientists and technicians, Apatity is one of the few true "science cities" of the former Soviet Union. Apatity will therefore serve as a rich source of scientific and engineering talent for any joint venture operating in the area. For more information on business opportunities in the Kola Peninsula, contact A. A. Selin of the Kola Association for Business Cooperation with Foreign Countries, Lenin Prospect 43, 183709 Murmansk, Russia. Telephone 011-7-3039, fax: 011-7-2795. Kazakhstan -- opportunity at the crossroads of Central Asia One of the largest of the Soviet successor states, Kazakhstan is located right in the center of the Eurasian land mass, between China and the Caspian Sea. Its population of 17 million includes over 100 nationalities (in addition to Kazakhs and Russians) -- even a sizable number of ethnic Germans and Koreans. The capital, Almaty (formerly Alma-Ata), has a population of over 1 million. Some of Kazakhstan's key exports are oil,coal, precious metals, iron, copper, wheat, and sheep. Despite its ethnic mosaic, Kazakhstan remains one of the few parts of the former USSR which has not seen any ethnic tensions. On the one hand, this is because it is a decidedly secular state -- the Kazakhs never did embrace Islam all that strongly. Another important factor in the country's stability has been the strong leadership of President Nursultan Nazarbaev, who is keenly aware of the importance of stability for development. Nazarbaev even has relatively good relations with Parliament -- something Boris Yeltsin can only dream of in Russia. Remember the periodic chart of the elements from your basic chemistry course? Kazakhstan claims that you can find virtually every element in the periodic chart under its soil. That's no idle boast. the country produces enough of a number of nonferrous and precious metals to be able to affect prices on world markets. Kazakhstan copper is of such purity that it is used as a benchmark on London's metals exchange. Some of the world's largest coal-mining operations are in Ekibastuz and Karaganda, and the country recently signed a landmark agreement with Chevron for the development of the vast Tengiz oil fields. The raw and the cooked Kazakhstan is primarily a raw materials producer, and manufactures few finished consumer goods. What facilities do exist tend to use horribly outdated and inefficient Soviet technology. One obvious entrepreneurial opportunity would involve simply importing the technology to produce added-value exports such as copper wire or tubing. Right now, local copper producers have no alternative but to export raw material for processing. With a flood of cheap consumer goods pouring in from China and Turkey, the local consumer industry is unable to compete effectively. So the government has a special program to encourage foreign investment in the development of the local consumer goods and food products manufacturing sectors. Kazakhstan is one of the few ex-Soviet republics to be a net exporter of oil, gas, and coal. Coal from Karaganda has a very low ash content, and has always been in high demand in Europe. The country boasts a highly trained work force, especially in the extractive and processing industries and metallurgy. There are many experienced specialists in the defense sector, which is undergoing a painful conversion to consumer production. Defense conversion in Kazakhstan is complicated by the fact that Kazakhstan often did not produce finished goods, but only components of items, which would then undergo final assembly in Russia or another republic. As is true of every former Soviet republic, Kazakhstan has a poorly developed infrastructure and service sector. But it is busy improving them with foreign assistance, especially from Germany and Turkey. On the positive side, the country has direct trunk-line rail links with Russia and China, two of the world's largest markets. Lufthansa serves Almaty twice a week from Frankfurt, while Turkish Airlines does the same from Istanbul. Several other European airlines are slated to begin service shortly. Travelers can even rent a car from Hertz at the airport. Principal highways are paved, and now even boast road signs in Latin letters as well as Cyrillic, but offer few en-route services. There is already an international telecommunications satellite link being offered by an Australian company out of Almaty, and the Japanese government currently assesses a multimillion- dollar telecommunications project for the entire country, which it intends to finance. Privatization party Kazakhstan is actively privatizing state enterprises. In the first stage, most retail goods and service enterprises have been privatized through employee buyout. In the interests of injecting new foreign capital in the country, large industrial enterprises are being privatized in the second stage on a competitive-tender basis, while smaller ones are being auctioned off. The government is looking for offers which will provide for both the social development of the country and the production development of the enterprise. Foreigners are free to participate in the tenders, which are being organized by the various ministries, such as Ministry of Energy, Ministry of Industry, Ministry of Communications, and so on. One potentially very profitable area for foreign investment is small-scale secondary extraction. Many oil fields and ore deposits have been abandoned because Soviet technology is unable to extract any more of these resources from the particular site. However, they are far from depleted. More efficient, modern methods can be used at these sites to profitably maximize their yield. Parliament has adopted a number of laws designed to protect foreign investors, including a Law on Foreign Investments. A Law on Foreign Currency Regulation allows foreign companies to transfer profits earned in Kazakhstan to foreign banks without any restriction. There have also been positive developments in the banking sector. Several Kazakhstan commercial banks have established direct relations with foreign banks, including in the United States, Germany, and Japan,and often with several banks in each of those countries. Foreign banks are now allowed to operate in Kazakhstan, and several have just opened up shop. At present, Kazakhstan is still in the rouble zone, but it is probably only a matter of time before it introduces a national currency. Kazakhstan is offering a number of incentives for foreign investment. Enterprises with more than 50% foreign participation get a 100% tax holiday for five years after they become profitable. After that, they get a 50% tax reduction for the next five years. Kazakhstan's customs duties are lower than those of Russian, and have been restructured in order to encourage joint production. For example, semi-finished goods brought in from abroad for final assembly by Kazakhstan enterprises are not subject to import duty. Kazakhstan and the United States already have a treaty to eliminate double taxation, and have now signed an inter-governmental agreement guaranteeing investments in each other's countries. Top of the heap Kazakhstan presently offers one of the best opportunities for foreign investors among the former Soviet Republics. It's one of the most politically and socially stable. Its multi-national population includes many highly trained specialists, especially in the extractive industries and defense-related sectors. The country possesses a wealth of natural resources, especially minerals and energy products, while available consumer goods and services are of low quality and insufficient quantity and variety to meet demand. Finally, a favorable taxation regime and a solid legal framework guaranteeing foreign investments send the clear message that Kazakhstan has the potential to become one of the most economically successful countries of the region. For more information, contact: National Foreign Investment Agency, Ministry of Economics, ul. Zhikdoksan 115, 480091, Almaty, Kazakhstan; tel. (7- 3272) 63-79-92; fax (7-3272) 63-69-85.