Radio Free Europe, Czech Republic
May 28 2004

OSCE: Prague Conference Aims To Build Business Climate In Central
Asia, Caucasus
By Breffni O’Rourke

The Organization for Security and Cooperation in Europe (OSCE) is
holding a key conference in Prague (31 May-4 June) which aims to help
its Eastern member states develop an economic climate where business
and private enterprise flourish. The five-day OSCE Economic Forum
is the culmination of a series preparatory meetings held mostly in
Central Asia and the South Caucasus.

Prague, 28 May 2004 (RFE/RL) — Building a house is a complicated
task. You need the raw materials like timber, clay, and stone. You
need skilled workmen to turn the raw material into usable components
like bricks and window frames.

You need more workmen to build the structure. And then you need someone
who can visualize the size and layout of the building so that it fits
its purpose.

And under all that, you need a solid foundation so that the whole thing
will not fall down.The OSCE calls for clear laws and regulations on
property rights, including land ownership, as well as on taxation,
curbing corruption, and improving companies’ access to financing.

One could say that building a house has many similarities to
constructing a successful business environment. At least in that
a properly functioning structure in both cases depends on the
interlocking of many different components.

Just as a house without a roof is useless, so is a business opportunity
without entrepreneurs to exploit it.

With this in mind, the OSCE is holding its annual Economic Forum in
the Czech capital Prague to help bring together the many ingredients of
a successful business climate. The Central Asian states and the South
Caucasus republics will be represented, as will the Balkan countries.

OSCE Economic Adviser Gabriel Leonte says high-level government
officials will be there, but others besides.

“This is not only a meeting for government officials,” he said. “We
have invited also regional organizations, and international
organizations. Also the business sector and the civil society is
invited to participate, as well as the academic community — because
the OSCE believes strongly that this issue can best be addressed if
all the stakeholders cooperate and work together.”

The 55-nation OSCE acts as a partner with the local business
communities. At the Prague forum it is particularly emphasizing the
need to build what it calls the “institutional and human capacity
for economic development.” In other words, framing laws which help
business, as well as training people — especially young people —
to think in business terms.

In its introductory paper to the forum, the OSCE says it “can promote
economic empowerment of men, women and youth” by providing information
and training. It urges the authorities in member states to improve the
working environment for small and medium-size businesses — enterprises
which are considered the backbone of the business environment.

The OSCE calls for clear laws and regulations on property rights,
including land ownership, as well as on taxation, curbing corruption,
and improving companies’ access to financing.

At present, local business people can find the path to profits a
difficult one. And as for Central Asia, some countries there have come
in for severe criticism from Westerners who have invested heavily, but
found their enterprises beset by difficulties, including disagreements
over taxation.

The OSCE’s Leonte agrees there are shortcomings.

“All the statistics indicate that these countries [in Central Asia]
still have to do a lot of things in order to perform better, and to
develop the business environment, in order to attract investment and
develop grass-roots initiative.”

The OSCE says a good financial infrastructure is a key element in
encouraging economic activity across the board. Access to financing
is often vital for business people with bright ideas, but no start-up
capital. The problem is the regular banking system is often reluctant
to get involved in offering microloans, because of the small returns
they generate and the risk factor.

With this in mind, the OSCE says it can offer to others its experience
in Kazakhstan, where with local partners it made a national assessment
of the “microcredit” industry, meaning the availability of small
loans for small businesses.

The OSCE will also offer at the forum the expertise gained by its
office in Yerevan, Armenia, on developing the Armenian Chamber of
Commerce and Industry. Chambers of commerce provide companies with
a useful source of information and contacts at home and abroad. The
project in Yerevan was carried out last year with the help of the
International Chamber of Commerce and strengthened the ability of
the local chamber to provide effective services to its members.

As to engaging young people, the OSCE has a program called YES —
Young Entrepreneurship Seminars — which it says is an idea which
could well be extended further. Under that program, summer camps for
young people on economic themes have been held in Tajikistan.

The Prague Economic Forum will also be discussing regional integration,
in the light of the European Union’s success in raising living
standards.

OSCE adviser Leonte notes the link between economic well-being and
security.

“The OSCE is not a development agency. We are a security organization
and we recognize that the lack of economic development might pose
some threats to security in the broader sense. And therefore we try to
work with governments and civil society and with other international
organizations involved in these countries to assist them to do better.”

The Economic Forum is being held at the Czech Foreign Ministry and
runs until 4 June. More information about the forum can be found at