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February 10, 1998


GLADWYNE, PENNSYLVANIA. After four busy months in Russia, Mr. Val Kogan, President of the Pennsylvania-Russia Business Council (PRBC), has just returned back to Gladwyne, Pennsylvania. The primary objective of his trip was to develop business cooperation among the Russian regions. While there he met with high level Russian regional administrators from 15 regions across Russia to determine business environments and opportunities for U.S. Mid-Atlantic region companies. The trip successfully established a foundation for future business development with some of these Russian regions. On October 10, 1997, in Podolsk, an agreement was signed with the Moscow Region Chamber of Commerce and Industry to develop and ensure special ties between our regions. One major step in this process will be a major Moscow Region presentation to be held in Philadelphia in Fall 1998. A Khakasia Republic presentation is also expected to be held before the end of 1998. We are in the process of scheduling the presentations of other Russian regions for 1999. While in Russia, Mr. Kogan also discussed opportunities to organize a Mid-Atlantic States presentation in Moscow and Nizhny Novgorod for 1999-2000.

During his trip the PRBC president established relationships with certain industry associations from which several business agreements have been signed. One such example is the "Sojuzupak" Packaging Industry Association which, like many other Russian industry associations, is experiencing steady market growth in relation to increased consumer demand. Agreements such as these are expected to facilitate future relations between Mid-Atlantic companies with Russian counterparts of similar industries.

The second major goal of this trip was to determine opportunities in Russia for U.S. Mid-Atlantic small businesses. In September 1997, Mr. Kogan participated in the second annual meeting for the Small Business Working Group under the Business Development Committee of the Gore-Chernomyrdin Commission and also in the session of the United States-Russia Roundtable of Small Businesses in Moscow. In December 1997, he participated in the 10th Anniversary of Small Business in Russia. The PRBC is currently working out a finalized agreement with the Russian Federation State Committee for the Support and Development of Small Business and is planning a special panel for small businesses to be held during the 3rd Annual Pennsylvania-Russia Business Opportunity Symposium in October 1998.

A third objective of this trip was to promote the U.S. Mid-Atlantic region both in terms of opportunities for Russian companies as well as its attractiveness to Russian travelers. On September 20, 1997, Mr. Kogan organized a press conference in Moscow where he and representatives from major Pennsylvanian companies operating in Russia discussed the attractiveness of the Mid-Atlantic region. He used the opportunity to further promote our region through over twenty other events in Russia in which he took part.

The Russian travel industry is currently experiencing a tremendous boom in business. The number of Russian people traveling abroad increased from 2 million people in 1993 to 11 million in 1997, indicating a steady increase in Russian buying power. Russians currently comprise the greatest number of tourists per year to visit such countries as Turkey, Cypress and Greece. Russian travelers' expenses abroad were ranked third in Western Europe. For future travel destinations, research conducted by Radio France International indicates the United States as ranked second to France in desirability for Russian travelers. Still, few Russians are currently aware of the attractiveness of travel opportunities within Pennsylvania, New Jersey or Delaware. The Pennsylvania-Russia Business Council recently signed agreements with the only Russian University offering a travel/tourism studies program along with a high school which specifically prepares students for undergraduate studies in this field. Such agreements are intended to secure future connections between Russian travel industry professionals and our region. The PRBC is planning to participate in the 5th Moscow International Travel and Tourism Exhibition, the major travel industry event in Russia, scheduled for March 26-29, 1998. The PRBC is also planning to bring Russian tour operators to the Mid-Atlantic region by the beginning of 1999. The Pennsylvania-Russia Business Council is currently working to prepare the first Russian language travel guide for the region.

During Mr. Kogan's trip to Russia he participated in a number of international business events which indicate the opportunities other countries are realizing there. Such countries as Great Britain, Spain, Italy, and a few Germany counties were present to hold trade missions and presentations. Finland's, the largest of these presentations lasting for an entire week and representing more than 350 business executives and regional officials from that country, was personally conducted by the President of Finland. As a means to promote Finland's interest in Russia, a direct mailing announcement was sent to each family in Moscow which equates to roughly 9 million people. The number of United States businesses operating in Russia is rapidly increasing although the total percentage compared to all other foreign businesses in Russia has dropped. Still, most major US companies in Russia have at least doubled their sales during last year.

In September, 1997, Moscow celebrated its 850th Year Anniversary and included many special events designed to celebrate this date. There are presently many visible signs in Moscow of improvement and development. In just one year's time over 800 buildings in Moscow were completely restored or rebuilt. The first Russian underground mall, consisting of three levels, was opened in November just a minute's walk from Red Square. On a small street where Mr. Kogan resided for a 4 month period, he witnessed 6 new shops open up during that time. Cultural life has also returned with numerous concert halls and theaters repeatedly experiencing sold out performances. Still, however, the transition to a market economy is proving to be a painful process for various segments of the Russian population, the elderly community in particular.

All across Russia where he was able to visit, Mr. Kogan noticed various degrees of developmental progress region by region. During the Trade Fair "New Russia" in Nizny Novgorod (the biggest of such events outside of Moscow) some booth vendors mentioned to him that just one year ago most of the attendees appeared preoccupied with the many problems in Russia. Now, however, they all seem ready to talk about a very promising future.

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