August 2000

 Inside this Issue...

 Eye on Southeast Europe 2

 Commercial Opportunities 4

 Around the Region 6

 Calendar of Events 7

CEEBIC Celebrates its 10th Anniversary

The Central and Eastern Europe Business Information Center (CEEBIC) celebrated its 10th anniversary the week of July 10 - 14 in Washington.

CEEBIC is the U.S. Government’s central clearinghouse for information on doing business in Central

and Eastern Europe. Over the past 10 years, it has

been at the heart of the Department of Commerce’s

efforts to promote U.S. commercial activity in the

region.

The week began with a workshop that brought

together CEEBIC’s Washington and international

staff members to discuss CEEBIC’s ongoing efforts

to increase and improve the services that it provides

to U.S. companies. CEEBIC’s overseas staff also

held one-on-one consultations with U.S. companies.

The week culminated with two events for the

business community. On July 14th, CEEBIC hosted

the “Southeast Europe: Project and Financing

Opportunities Forum.” Officials from the Department

of Commerce and other U.S. government agencies

briefed over 80 U.S. companies on commercial

opportunities arising from the Stability Pact for

Southeast Europe. CEEBIC serves as a link between the business community and the Stability Pact,

an initiative by the United States and other countries

to strengthen political and economic stability in

Southeast Europe. Later in the day, CEEBIC also

held an open house and reception for more than 150

U.S. companies interested in Central and Eastern

Europe. The event allowed companies to meet with

CEEBIC’s international and Washington staff to

discuss commercial opportunities in the region.

E-Commerce Grows Steadily in the Region

With over 3,000,000 people on-line in Central and

Eastern Europe, e-commerce has grown steadily in

the region and is expected to more than double in the

next decade. Currently, about two-thirds of all ecommerce is business-to-business and it is in this area

that there is the greatest potential for U.S. firms.

Products that are in high demand include operating

system software and data management packages.

Business-to-consumer sales are less frequent. This is

due mainly to a lack of consumer confidence in on-line

shopping, the high-cost of internet services, and the

lack of credit cards. However, there is evidence that

this is changing and business-to-consumer transactions

are likely to grow. A recent survey in Poland found that

52 percent of all Poles were interested in on-line

shopping and entrepreneurs in the region have

developed alternative methods of payment including

billing internet purchases directly to phone bills.

Central and Eastern Europe

Commercial Update

A publication of the U.S. Department of Commerce, International Trade Administration, Central and Eastern

Europe Business Infromation Center in cooperation with the U.S. Agency for Interntional Development
2 Central and Eastern Europe Commercial Update

Eye on Southeast Europe

Stability Pact Produces Opportuniites for U.S. Businesses

by Jonathan Kimball

In the aftermath of the conflict in Kosovo, the international

community pledged to work with the countries of Southeast

Europe (Albania, Bosnia and Herzegovina, Bulgaria, Croatia,

FYR Macedonia, and Romania) to further economic

prosperity, consolidate democracy, and enhance regional

security. To coordinate these objectives, the donor

community, international financial institutions (IFIs), and

regional governments established the Stability Pact for

Southeast Europe.

The Stability Pact is a partnership between the governments

of the region that pledge to undertake concrete reforms that

enable private sector development, support a vibrant civil

society, and allow for regional stability and donor

governments and organizations that agree to fund specific

projects in support of these objectives.

Last March, donor governments and IFIs, including the

World Bank, the European Bank for Reconstruction and

Development (EBRD), and the European Investment Bank

(EIB), pledged more than $2 billion in support of regional

projects. Of particular interest to American companies are

the 35 “Quick-Start Projects” focusing on improving

Southeast Europe’s infrastructure, including roads, rail

systems, water and wastewater utilities, power generators,

etc. The initial administrative work for these projects is

currently under way. All Quick-Start Projects are scheduled

to begin by April 2001.

U.S. companies are encouraged to bid on projects financed

by the World Bank, the EBRD, and the EIB. When projects

are wholly funded by these organizations, U.S. firms can

participate in an open, free, and fair tender process.

However, it is likely that a large number of projects in

Southeast Europe will be funded at least partially with

bilateral assistance from member states of the European

Union. In the majority of these cases, only companies

registered in European Union member-countries or Southeast Europe can participate. U.S. companies without

overseas offices in these regions will have difficulty winning

tenders funded with European bilateral assistance.

The U.S. Department of Commerce and the U.S. Trade and

Development Agency (TDA) are working to support

American firms interested in participating in this bidding

process. The Commerce Department’s Central and Eastern

Europe Business Information Center (CEEBIC) provides

American firms the most up-to-date information on the

status of projects and their bidding criteria. Commerce

Department officials located within the World Bank and the

EBRD can work directly with American companies bidding

on specific projects funded by these institutions. In

addition, Commerce and TDA officials currently are

exploring how U.S. Government resources can best support

U.S. firms when bidding on EIB-funded projects.

Details of the Quick-Start Projects and U.S. Government

programs supporting American companies in Southeast

Europe will be discussed at the July 14 Southeast Europe:

Project and Financing Opportunities Forum to be held in

the Commerce Department’s auditorium (see page 7 for

further information).

Do you want to know more about commercial and economic conditions and

opportunities in Southeast Europe?

Checkout CEEBIC's weekly e-mail publication

The Southeastern Europe Business Brief

To subscribe, e-mail CEEBIC at ceebic@ita.doc.gov
Central and Eastern Europe Commercial Update 3

Central and Eastern European

Commercial Update

The Central and Eastern European Commercial

Update is produced by the Central and Eastern Europe

Business Information Center (CEEBIC). For more

information or to subscribe contact CEEBIC at: phone

(202) 482-2645, fax (202) 482-3898, or e-mail

ceebic@ita.doc.gov.

Director: Jay Burgess

Editor: Michael Rogers

International Trade

Specialists: Amy Burke, Jennifer

Gothard, Michael Rogers

Webmaster: Gedlom Tesfazion

Contributors: Jonathan Kimball, Laurie

Molnar

Intern: Christine Muchanic

Six Countries in Central and Eastern Europe Rank

in the Top 50 for Internet Usage

Slovenia Czech Republic

Rank: 9

Population: 1,970,570

Internet usage: 460,000

Internet usage as

a percentage of population: 23.3 percent

Number of telephones: 747,000

Phone penetration: 37.9 percent

Number of cellular phones: 166,500

Cellular penetration: 8.6 percent

Rank: 19

Population: 1,408,523

Internet usage: 152,000

Internet usage as

a percentage of population 10.8 percent

Number of telephones: 498,600

Phone penetration: 35.4 percent

Number of cellular phones: 247,000

Cellular penetration: 17.5 percent

Estonia

Slovakia

Rank: 24

Population: 5,396,193

Internet usage: 513,000

Internet usage as

a percentage of population: 9.5 percent

Number of telephones: 1,539,000

Phone penetration: 28.5 percent

Number of cellular phones: 465,400

Cellular penetration: 8.6 percent

Hungary

Rank: 29

Population: 10,186,372

Internet usage: 500,000

Internet usage as

a percentage of population: 4.9 percent

Number of telephones: 3,423,000

Phone penetration: 33.6 percent

Number of cellular phones: 1,070,200

Cellular penetration: 10.5 percent

Rank: 34

Population: 10,280,513

Internet usage: 270,000

Internet usage as

a percentage of population: 2.6 percent

Number of telephones: 3,741,500

Phone penetration: 36.4 percent

Number of cellular phones: 965,000

Cellular penetration: 9.4 percent

Poland

Rank: 36

Population: 38,608,929

Internet usage as

a percentage of population: 700,000

Internet penetratrion: 1.8 percent

Number of telephones: 8,812,300

Phone penetration: 22.8 percent

Number of cellular phones: 1,928,000

Cellular penetration: 5.0 percent
4 Central and Eastern Europe Commercial Update

Central and Eastern Europe Commercial Opportunities

World Bank Calls for Expression of Interest in Education Development Project in Bosnia and Herzegovina

Overall Project Objectives:

(1) to mobilise the professional capacity of teachers to improve the teaching and learning processes in schools,

and as a result improve the quality of education being offered to primary school children in Bosnia and

Herzegovna (BiH.);

(2) to promote the efficient and effective use of scarce public resources for education in BiH by providing public

policy makers and decision makers with management tools and information necessary to measure inputs, outputs

and outcomes in the education system; and (3) to promote co-operation and co-ordination across the three main

constituent groups in an effort to reduce inefficient resource use and build a professional basis for stakeholder

dialogue in education throughout BiH.

The project will include four principal components:

(1) A Quality Fund (US$ 3.7 million) will provide financing for non-salary incentives to primary schools and primary

school teachers with the aim of stimulating innovation and creativity at the school level. It also provides support for

building capacity and stimulating innovation in teacher training institutions;

(2) A newly established Standards and Assessment Agency (US$ 3.7 million) will provide information to the

education community and the public at-large on student achievement and overall system performance with the aim

of learning about the system’s strengths and weaknesses, promoting accountability in public education and

measuring compatibility between educational standards in BiH and the rest of Europe. The Agency will be a

shared intermediary institution supplying high quality professional services in the field of student assessments;

(3) An Education Management Information System (US$ 2.1 million) will enable improved sector management

and compatibility of information among Bill’s decentralised education systems. It will also rest the viability of a per

student budgeting model designed to promote increased efficiency and equity in education spending; and

(4) A Higher Education Component (US$ 3..5 million) is designed to stimulate professional co-ordination, innovation,

strategic planning and efficient governance at both sector and institutional levels in higher education in Bill. Pending

creation of a Council of Higher Education, a secretariat will be established under the Council with terms of reference

to focus on two objectives.

1) increased strategic planning and institutional consolidation and

2) improved qualification and accreditation systems.

To provide incentives for strategic planning, a Higher Education Fund will be established in the amount of

 $2.5 million.

(5) Living Standards Measurement Survey (US$ 0.6 million) The goal of this component is to provide reliable

data, for the entire country, on the levels and determinants of welfare, the causes of observed social sector

outcomes and the incidence of public expenditures. The specific objectives of the component are to carry out a

Living Standard Measurement Study Survey, create the capacity in the country to carry out such surveys and promote

the use of such data through wide dissemination of the results, the various analyses of poverty, as well as the unitrecord data sets.

The project will also provide financing to support project implementation units in the Federation of BiH and RS.

Contact: Ms. Zorica Lesic, Tel: (387-71) 440-293, Fax: (387-71) 440-108 or Mr. James A. Stevens, Tel: (202) 473-

3011, Fax: (202) 477-1034
Central and Eastern Europe Commercial Update 5

Emergency Transport Reconstruction Project Bosnia and Herzegovina Republic of Srpska

The Project Implementation Directorate of the Republic of Srpska (RSPID) intends using part of the proceeds of a loan from the

European Bank for Reconstruction and Development towards the cost of reconstructing selected roads and bridges within the Republic

of Srpska.

LOT 1. P1 - P 204, total length 3,596.01 m

LOT 2. P204 - 352, total length 2,608.88 m

Republic of Srprska Project Implementation Directorate (RSPID) now invites sealed tenders for two lots from interested

contractors for the following contracts to be funded from part of the proceeds of the loan. Types of the works are the similar for both lots

and are: earth works; repair of landslide; new retaining walls; new asphalt layers; traffic signs and signals.

Tendering for contracts to be financed from the proceeds of a loan from the Bank is open to firms from any country. The proceeds of the

Bank’s loan will not be used for the purpose of any payment to persons or entities, or for any import of goods, if such payment or import

is prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations.Tenders are

invited for one or both lots. Each lot must be priced separately. Tender for more than one lot may offer discount and such discounts will

be considered in the comparison of tenders. To be qualified for the award of the contract, tenderers must satisfy, but not being limited to,

the following minimum criteria: successful experience as a prime contractor in the execution of at least three projects of a similar nature

and complexity within the last five years; suitably qualified personnel with at least ten years experience in similar works and five years

in key management and supervisor/foremen position; access to, or has available, liquid assets, unencumbered real assets, lines of credit

and/or other financial means amounting to at least DEM 3.0 Million jointly for both lots or DEM 2.0 Million for Lot 1 and DEM 1.0 Million for Lot

2; and audited balance sheets or certified annual accounts statements for the previous three years.

Tender documents may be obtained from the offices of the RSPID at the address given below upon payment by certified cheque or

banker’s draft of a non-refundable fee of 500 DEM. Payment must be made in favour of the: Republicka direkcija za puteve, Banja

LukaKristal Banka, Banja Luka, Acc. 70406 - 1813226 under reference: “Tender Contract RS-97/00-02, section Hrastova Kosa -

Bebe. “

Tenders must be delivered to the Office of the Director, Republic Project Implementation Directorate at the address below on or before 13

September, 2000, not later than 13.00 local time, at which time they will be opened in the presence of those tenderers’

representatives who choose to attend. Tenders received after the time and date specified above will not be accepted and will be returned

unopened to the tenderer.

Contact: Dr. Dragan Mihajlovic, RS Project Implementation Directorate for Transport, Vase Pelagica 10, 78000 Banja Luka, Republic of

Srpska, Bosnia and Herzegovina, Tel: (387-51) 309-790, Fax: (387-51) 308-316

Hungary

The Hungarian Ministry of Education is

accepting bids for the supply and installation of computer hardware and software for

a learning center. This is a World Bank

funded project and bidding will be

conducted through the international competitive bidding procedures specified in the

World Bank’s gridlines. Interested bidders

can purchase tender documents tender

documents for a fee $100. The deadline for

bids is September 13, 2000 at 10:00 am

Budapest time.

Contact:

IDEX-INTER-ED Company, Ltd.

Lajos U. 38

H-1036

Budapest, Hungary

Mailing address:

P.O. Box LO8

H-1251

Budapest, Hungary

Tel: (36-1) 368-6803

Fax: (36-1) 388-6104

E-mail: IDEX@IDEX.hu

Latvia

VEF Inzenieru, a private company based in

Riga, Latvia is a manufacturer of indoor and

outdoor electronic displays used in sports

stadiums, and other venues. It is seeking a

U.S. manufacturer of electro-magnetic

displays/staver H-D modules to be used in

the production of these electronic signs.

Contact:

Andris Ozols

VEF Inzenieru

Brivibas gatve 214

Riga, Latvia 1039

Tel: (371-2) 562-229

Fax: (371-2) 276-678

E-mail: vefic@tl.lv

Contributed by Aldis Celms

Slovenia

Lip Bled d.d., a private company established in 1948, is well known manufacturer

of wooden doors with a staff of 875.

Currently, it exports to Austria, Italy

Switzerland, Germany and Croatia. It is

seeking complete logs of maple, cherry, red

oak as well as red oak quarters to be used in

the manufacturer of their product line.

Contact:

Lidija Zupan

Lip Bled d.d.

Ljublijanska c. 27

Bled 4260

Slovenia

Tel: (386-64) 795-200

Fax (386-64) 741-675

Contributed by Marko Mlakar
6 Central and Eastern Europe Commercial Update

Around the Region....

Conference on Energy and Transportation Projects

in Southeastern Europe

Sponsored by the U.S. Trade and Development Agency in

Cooperation with the U.S. Department of Commerce

September 13 - 15, 2000

Loews Philadelphia Hotel

Philadelphia, Pennsylvania

Presenting Over 25 Energy and Transportation Projects in Southest Europe

in the area of:

Electricity, Oil & Gas, Rail, Airports, Environment, Ports & Waterways, Roads & Bridges

For more information, please contact the U.S. Trade and Development Agency c/o

Koeppen, Elliott & Associates, Ltd. Telephone: (202) 429-5245 Fax: (202) 429-9574

E-mail: MAK@KEALTD.com

Bulgaria and Slovenia Report Growth in GDP During First

Quarter 2000

Bulgaria reported a 4.8 percent rise in GDP during the first

quarter. This is mainly attributed to an 18 percent increase in

fixed investment and a 44 percent growth in exports.

Slovenia’s GDP grew by 6.3 percent during the first quarter

of this year as a result of growth in exports and industrial

output.

Albania and Croatia One-Step Closer to WTO Membership

On July 17, the accession protocols for Albania and Croatia

were formally adopted by the World Trade Organization

(WTO) bringing both countries one-step closer to WTO

membership. Each country must now ratify the protocols. 30

days after notifying the WTO that the ratification is complete

the countries will become WTO members.

Polish Parliament Passes Bill to Reform State Railways

On July 25, the Polish parliament approved a bill to reform

the State Railways (PKP) in preparation for its eventual

privatization. The legislation calls for dividing the PKP into

smaller companies, restructuring its $1.4 billion debt, and

reducing its workforce from 185,000 to 145,000 by 2002.

(Source: RFE/RL)

Possible merger of Latvian and Estonian Energy Utilities

The Latvian and Estonian economics ministers recently

signed a protocol of intent on closer cooperation between

the energy utilities of the two countries, Latvenergo and

Eesti Energia. The protocol of intent launches an

investigation of pros and cons of a merger of the two stateowned companies. Both Latvian and Estonian officials

stated that the potential merger would not adversely impact

privatization plans for the two companies.
Central and Eastern Europe Commercial Update 7

Calendar of Events

September

9/13 - 9/15 Conference on Energy and Transportation

Projects in Southestern Europe, Philadelphia, PA

Contact: U.S. Trade and Development Agency c/o

Koeppen, Elliott & Associates, Ltd. (202) 429-5245

9/20 - 9/22 5th International Exhibiton for the Oil and

Gas Industry, Warsaw, Poland

Contact: Biuro Reklamy (48-22) 849-6081

(Application deadline 7/28)

October

10/17 - 10/19 2nd International e-Commerce

Conference, Kempinski Hotel, Sofia, Bulgaria

Contact: Maya Kristeva, Via-Expo (359-32) 650-011

November

11/2 - 11/4 Seventh Annual CIS Eastern Europe Business Forum, University of Arizona, Tucson, AZ

Contact: Roza Simkhovich, Fax: (520) 298-6599

This notice is provided solely as an informational resource and

does not constitute U.S. Department of Commerce

endoresement of these events. All information published in the

Commercial Update regarding trade events is subject change

without notice by the organizers of those events.

For a more complete list of events, go to

CEEBICnet, www.mac.doc.gov/eebic/ceebic.html

Information Technology Agreement Eliminates Tariffs on Many

High-tech Goods

Negotiated in 1997, the Information Technology

Agreement (ITA) is a trade agreement that requires

signatory countries to have eliminated their tariffs on

specific information technology goods by January

2000. ITA participants must eliminate their tariffs on

a most-favored-nation (MFN) basis, meaning that

they must extend duty-free treatment to imports from

all WTO members even if the member benefitting

from duty-free treatment is not an ITA signatory.

Products covered under the ITA include computer

hardware, peripheral devices, telecommunications

equipment, computer software, semiconductor

manufacturing equipment, analytical instruments, and

semiconductors. For a complete list of products

covered under the ITA go to www.wto.org/ew/

inftech.htm. The signatory members of the ITA in

Central and Eastern Europe are Albania, Croatia,

Czech Republic, Estonia, Latvia, Lithuania, Poland,

Romania, Slovakia, and Slovenia.

New Regulation for the Export of

Encryption Software

On January 14, 2000, the Bureau of Export

Administration (BXA) published a regulation

implementing the White House’s announcement of a

new framework for export controls on encryption

items. The policy is in response to the changing global

market, advances in technology and the need to give

U.S. industry better access to these markets, while

continuing to provide essential protections for

national security. The regulation enlarges the use of

license exceptions, implements the changes agreed to

at the Wassenaar Arrangement in December 1998

and eliminates the deemed export rule for encryption

technology. In addition, new license exception

provisions are created for certain types of encryption,

such as source code and toolkits. To learn more about

the new regulation, visit the Bureau of Export

Administration website at www.bxa.doc.gov.

Useful Department of Commerce Resources

for the Export of IT Products

CEEBICnet

www.ita.doc.gov/eebic/ceebic.html

Bureau of Export Administration

www.bxa.doc.gov

Office of Information Technologies

www.ExportIT.ita.doc.gov

Office of E-Commerce

www.ita.doc.gov/td/ecom
PRESORTED

FIRST-CLASS MAIL

POSTAGE & FEES PAID

ITA/DOC

PERMIT No. G-54

Sender CEEBIC

U.S.A. Trade Center

U.S. DEPARTMENT OF COMMERCE

Stop R-CEEBIC

Washington, D.C. 20230

OFFICIAL BUSINESS

Penalty for Private Use, $300

CEEBIC and the Commercial Service are Available to Assist U.S. Companies

Czech Republic

U.S. Embassy Prague

Trziste 15

118 01 Prague 1

Tel: (420-2) 5753-1162

Fax: (420-2) 5753-1165

Estonia

Reene Sepp, Trade Specialist

U.S. Embassy Tallinn

Kentmanni 20, Tallinn

Tel: (372-6) 312-021

Fax: (372-6) 312-025

FYR Macedonia

Arben Gega, Trade Specialist

U.s. Embassy Skopje

Bu. Ilinden bb 9100, Skopje

Tel: (389-91) 116-180

Fax: (389-91) 117-103

Hungary

U.S. Embassy Budapest

Szabadsag ter 12, 1054 Budapest

Tel: (36-1) 475-4282

Fax (36-1) 475-4676

Latvia

Aldis Celms, Trade Specialist

U.S. Embassy Riga

Raina Blvd. 7, Riga

Tel: (371) 782-0046

Fax: (371) 782-0047

Albania

Omer Dashi, Trade Specialist

U.S. Embassy Tirana

Riugahabinot 103, Tirana

Tel: (355-42) 47-285 or 286

Fax: (355-42) 32-222

Bosnia and Herzegovina

Edin Fetahovic, Trade Specialist

U.S. Embassy Sarajevo

43 Ul. Dure Dakovica

Sarajevo, Bosnia and Herzegovina

Tel: (387-71) 665-851

Fax: (387-71) 665-836

Bulgaria

Georgi Peev, Trade Specialist

U.S. Embassy Sofia

NDK Administrative Building 5th Floor

1 Bulgaria Square

1414 Sofia, Bulgaria

Tel: (359-2) 963-4062

Fas: (359-2) 980-6850

Croatia

Damir Novinic, Trade Specialist

U.S. Embassy Zagreb

Andrije Hebranga 2, Zagreb

Tel: (385-1) 461-0777

Fax: (385-1) 455-3126

Lithuania

Jonas Vasilevicius, Trade Specialist

America Center

Pranciskonu str. 3/6, 2001 Vilnius

Tel: (370-2) 223-31 ext. 149

Fas: (370-2) 222-779

Poland

U.S. Embassy Warsaw

Al. Jerozolimskie 56/C, 00-803 Warsaw

Tel: (48-22) 625-4374

Fax: (48-22) 621-6327

Romania

Clement Dan, Trade Specialist

U.S. Embassy Bucharest

Strada Tudor Arghezi 7-9, Bucharest

Tel: (40-1) 210-4042

Fax (40-1) 210-0690

Slovakia

Pavol Matusek, Trade Specialist

U.S. Embassy Bratislava

Grosslingova 35, 811 09 Bratislava

Tel: (421-7) 5296-1079

Fax: (421-7) 5296-1085

Slovenia

Marko Mlakar, Trade Specialist

U.S. Embassy Ljubjana

Presernova 31, 1000 Ljubljana, Slovenia

Tel: (386-61) 200-5500

Fax: (386-61) 200-5555