          
          
          
          
                         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.
          
          
          
          
