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OSCE: Prague Conference Aims To Build Business Climate In Central Asia, Caucasus

  • 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