Project memorandum : New Independent States -- private sector initiatives (110-0005)

investment in and trade with the NIS and fostering privatization. The project will focus primarily on reorienting NIS economies from defense to civilian needs. TA, business support services, and training will be provided. Four activities will be funded to promote U.S. investment. (1) Long- and short-term advisors will assist in the conversion of defense industry centers in Russia (2 sites), Ukraine, and a Central Asian Republic. The advisors will work with local political and business leaders to recommend legal and regulatory reforms, and they will also channel information on business opportunities to U.S. companies. (2) A Trade and Investment Service (TIS) will be established in key locations (Moscow, St. Petersburg, and a far eastern city in Russia; Kiev, Ukraine; and Alma Ata, Kazakhstan) to help NIS governments create a legal and regulatory framework for bilateral trade and investment, privatization, and defense conversion. The TIS will also facilitate U.S. investment by identifying specific opportunities and seeking high potential U.S. investors to pursue them. (3) The Overseas Private Investment Corporation (OPIC) will conduct U.S. investment missions to the NIS. (4) Short-term training in business and economics will be provided, mostly the NIS, to public and private sector personnel through the Eurasia Foundation (soon to be created under project 1100010). Trade promotion activities will be implemented by the U.S. Department of Commerce and the Trade Development Program (TDP). The Commerce Department will establish a NIS Business Information Center (NISBIC) in Washington, D.C., and will also help up to nine consortia of U.S. trade associations to set up offices in the NIS. TDP will provide grants to NIS governments hire U.S. firms to do feasibility studies on infrastructure projects that could potentially use U.S. inputs. Finally, the project will promote privatization. For example, the International Finance Corporation is considering submitting a proposal for a grant to auction off former State-controlled shops. Small and micro businesses that will emerge from such efforts will be the incubator of a NIS private sector. Amendment of 1/93 increases funding from $50 million to $177 million and extends the PACD to 9/97. (Abstract based on PD-ABG-371). Amendment of 6/28/93 increases funding to $425 million, greatly expanding the privatization and small enterprise components. Privatization TA will be expanded in the areas of post-privatization assistance, voucher auctions, public relations, land privatization, regulatory assistance, and capital markets development. Under the small enterprise component, new business development programs, such as the one underway in Russia, will be extended to Ukraine, Armenia, Georgia, and Central Asia; the programs aim to strengthen institutional systems for business support and improve the policy environment. The amendment also decreases support for TIS and adds a consolidated project management and support unit. (PD-ABG-371) Amendment of 2/2/94 increases funding to $875 million, $300 million of which will be used for additional TA for the privatization component, which is achieving remarkable success. Most of the remaining new funds will be used for small enterprise development. (PD-ABH-868)