PRIVATE ENTERPRISE PARTNERSHIP 39525 Partnership P E R S P E C T I V E THE F A L L 2 0 0 2 The Partnership's Belarus Team Receives The International Finance Corporation IFC's Corporate Award (IFC) is a member of the World Bank Group. IFC works to reduce poverty "The Belarus team represents the excellent work that IFC's Private Enterprise and improve people's lives in emerging Partnership is doing on the ground to build the private sector... The Belarus economies by enabling and promoting team's achievement is particularly remarkable as they are working in very sustainable private sector investment difficult circumstances and in a country given up on by most other development at the frontiers of economic develop- organizations." ment. IFC itself is the world's largest Peter Woicke, IFC Executive Vice President multilateral investor in emerging mar- kets. Located in the heart of Eastern Europe, Belarus is the only country of the former Soviet Union where the economy remains almost completely un- Who We Are der the control of the state. When you walk through the center of Minsk you do not see bustling outdoor cafes, street vendors or private shops as IFC's Private Enterprise Partnership you do in Kiev or Moscow. Private enterprises account for only seven works to develop strong, self-sus- percent of Belarus' economy and face tremendous obstacles to growth. In taining economies in the former an environment where most international organizations find it difficult to Soviet Union that serve all levels of operate, the Partnership's Belarus team has been instrumental in promot- society. Together with our donor ing business-friendly policies and equipping local businesses with the skills partners, we assist private compa- and knowledge they need to succeed. nies and governments to: The Partnership's Belarus team · Attract private direct investment consists of 12 local professionals ­ to all areas of the economies, lawyers, economists, and public · Stimulate the growth of small and education specialists, led by medium-sized enterprises, and an American manager Carl Dagenhart (fifth · Improve the business enabling from left, second row). environment. Countries we serve: Armenia, Azerbaijan, Belarus, Georgia, continued on page 6 Kyrgyz Republic, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. The Partnership's New Leadership We thank our donor partners for making these programs possible. On July 1, 2002, Christian Gross- Christian Grossmann is a German mann began his tenure as the national. During his 20 year profes- Director of the Private Enterprise sional career he worked as a civil In This Issue Partnership. The Partnership's out- engineer in France, Tunisia, and going leader, Richard Ranken, has other parts of Africa. After the com- pg. 2 Interview with Christian moved to head IFC's global General pletion of an MBA degree from Grossmann Manufacturing Department. The INSEAD, Mr. Grossmann worked Partnership thanks Mr. Ranken for in management consulting, invest- pg. 3 Program Update his contribution to the management ment banking, and risk management pg. 5 Legislation Update of IFC's technical assistance in the in France,Germany, the United Focus on SMEs former Soviet Union and his leading Kingdom, and the United States. role in the establishment of the Part- Mr. Grossmann joined IFC in Wash- pg. 7 Impact on the Ground: nership. We wish Mr. Ranken success ington four years ago as financial Belarus in his new position and welcome controller. Christian Grossmann to the team. pg. 8 Space Technologies for continued on page 2 Russian Farms 2 The trol operations for IFC's tech- What are the main challenges do you foresee in your new role? Partnership's nical assistance programs in the former Soviet Union. New We are a large team. We are manag- We had to do this work in ing projects spanning nine time zones Leadership preparation for creating the and across six countries. We are look- Private Enterprise Partner- ing to expand even further to the Interview with Christian ship. Through working on this Caucasus, Kazakhstan, Mongolia, and Grossmann, Director, IFC's project, I got to know IFC's Moldova. One of the challenges is Private Enterprise technical assistance team not making sure the Partnership remains Partnership only in Ukraine but in other a very closely knit team regardless of parts of the former Soviet Union. I the distance separating our offices or was impressed by the achievements of continued from page 1 how remote they might be ­ whether the team and by the people I met, and Mr. Grossmann, prior to joining the it is Magadan in the Russian Far East I was fascinated by the tremendous Partnership, what was your experience or Khujand in Tajikistan. historic change this region was with IFC? experiencing. The second challenge for me person- I joined IFC to head its Controller's ally is to learn Russian. I have already Finally, I agree with the point IFC's and Budgeting Department to direct started and, although it is my fifth leader, Peter Woicke, often makes: by its work on financial reporting and ac- language, I can now say from experi- combining technical assistance and counting policy issues and internal ence that it is not an easy task! investment through such programs as control systems for the Corporation. the Partnership, IFC's developmental Third, it is time to evaluate what we I was also responsible for loss provi- impact can be significantly leveraged. have achieved and what steps we need sions and IFC's budget. I recall, the When the job with the Partnership to take next to continue the Partner- very first budget I had to work on became available, I was thrilled with ship's successful work. The Partner- represented one of the largest increases the opportunity to become part of ship has had very eventful and fast- IFC has ever asked for, and its Board this dynamic team. paced first two years. We have built a requested IFC to come back with a very strong management team thanks second proposal. So you can say that What do you expect to be the most to which we have grown quickly from I had a baptism of fire and had to exciting part of your new job? six projects when we started in 2000 learn very quickly on the job! I joined IFC because I wanted to go to 24 today and 30 more in the When I came, the finance complex back to development work. At the very pipeline. We have expanded into Cen- had just undergone a major reorgani- start of my career I worked in North- tral Asia and opened five new regional zation and the mission of the ern Africa on civil engineering projects offices in Russia and four in Ukraine. Controllers' department had been ­ building irrigation systems and dams. We have strengthened our partner- completely redefined ­ namely to Development was the reason I became ships with donors and the private move from processing to analysis. I a civil engineer in the first place. After sector. Now that the launch period is started by building a team and, I be- my MBA, I then went on to work in over, we need to refine our strategy lieve, I succeeded in establishing a management consulting and then in- and focus our activities even further strong team which is now running vestment banking, but always wanted on those areas where we bring maxi- the department's operations smoothly to do more than that. mum results while drawing on our and independently. When I joined comparative advantages. In doing so, Ever since I joined IFC, I was look- the Private Enterprise Partnership, I we need to work very closely with ing forward to an opportunity to work was happy to pass the leadership of our donors to develop a mutual un- in the field ­ to live among people of my former department to one of its derstanding of our joint priorities in different cultures, to witness positive senior managers, Allen Shapiro. the next few years. changes in their lives, and to take part While with the Controller's and Bud- in these changes. The job with the What's the first thing you would like geting Department, I also started a Partnership gives me all of these to accomplish as the head of the specialized division to manage donor opportunities. Furthermore, as a Partnership? funding for all of IFC's technical as- European, I feel in many ways more My immediate goal is to make sure sistance programs. The work of this at home living in Moscow than in we have what we need to continue division greatly enhanced IFC's focus Washington. our successful work. IFC's funding on accountability and responsibility Have you already settled in? for the Partnership ends in June 2003. to our donors. In order for us to continue our work More or less. My wife and I have How did you become interested in the uninterrupted and demonstrate our moved in an apartment near old Ar- Partnership? commitment to our donors, we are bat street. We both enjoy that part of going to IFC's Board of Directors It so happened that my very first busi- historic Moscow a great deal. Since this fall to request continued IFC ness trip with IFC was to Ukraine in our furniture has not arrived yet, we funding for the next three years. We the winter of 1999. I was invited to also eat out frequently and appreciate are very optimistic and I hope that we help set up centralized financial con- the variety of restaurants in Moscow. will report our good news soon. thePartnershipPerspective Fall 2002 ProgramUpdate 3 R U S S I A Mission Accomplished: and taxation aspects of leasing opera- IFC Saw Russia's Leasing tions in Russia. Sector Grow to $2.3 To ensure the sector's long-term growth we drafted and advocated Billion amendments to the Tax Code and the Law on Leasing, eliminating legisla- Thousands of Russian small businesses tive contradictions. IFC also invested and start-ups gained access to $19 million of its own resources and affordable financing. mobilized an additional $45 million in four Russian leasing companies. In October 2002, the Partnership Today, the leasing market is approach- Business Novice Becomes concluded its Russia Leasing Devel- ing $2.3 billion, six times its size at opment Group project. This project, Leasing Expert, Helps the time of the 1998 financial crisis, with funding from Canada (CIDA) and still growing. The benefits reach Small Businesses Grow and the United Kingdom (BKHF), far beyond the leasing sector itself. In December 2000, when Sergei Kudryashov par- played a key role in developing a com- Leasing is vital to new and small com- petitive leasing market in Russia. ticipated in the Partnership's training on panies, as it provides access to "The leasing market in Russia would equipment for a relatively small up- structuring leasing operations, there were no have certainly developed on its own front investment and does not require leasing companies in his native town of Kirov, eventually. IFC brought its global collateral. And with banking services 1,000 kilometers northeast of Moscow. IFC's leasing expertise and accelerated this concentrated in capital cities, leasing seminars and additional consultations provided process by years," said Edward Nas- fills significant gaps in available fi- the know-how Kudryashov needed to set up his sim, Director of IFC's Central and nancing for small business in the own leasing company. And by fall 2001, his Eastern Europe Department. regions, where existing banks are still company ­ the Leasing Center ­ received a li- When we started in 1997 the market reluctant to lend to any but the sound- cense to operate and, by the end of the year, had was in an early stage of development est and most established borrowers. already concluded 12 contracts and was manag- and very few Russians knew what IFC played an important role in get- ing a portfolio of about $300,000. "Without the leasing was. We began with public ting Russia's leasing sector off the support and expertise I got from IFC staff, getting ground. Now we are a leasing company off the ground would have working to match Russ- been much more difficult and would have taken ian leasing companies much longer. Today, IFC continues to be a great with investors in St. resource for professional advice on the intrica- Petersburg and in Eka- cies of the leasing business," said Sergei terinburg with funding Kudryashov. from Finland and the Sergei Kudryashov was among some 150 local United Kingdom. specialists who benefited from the Partnership's The expertise gained by leasing training program. As of summer 2002, the Russia Leasing De- five leasing companies with a combined portfolio velopment Group gave of $1.3 million were operating in the region ­ all a quick start to the Part- trained by the Partnership's Russia Leasing De- nership's Central Asia velopment Group. The companies' clients Leasing Development include small and medium-sized enterprises of Project. Launched only the Kirov region such as bakeries, printing shops, a year ago with funding retail stores, and transportation companies. education campaigns explaining what from Switzerland (seco), the project leasing was and its benefits to na- has already contributed to leasing One business in Kirov which benefited from the tional and regional governments, laws passed in the Kyrgyz Republic increase in the availability of leasing was the entrepreneurs, bankers, and mass me- and Uzbekistan, trained over 1,000 Kirov PrintWorks, a 200 year-old print shop with dia across Russia. To build local people, and raised over $7 million in 30 year-old equipment. Using leasing to upgrade technical expertise on leasing, we financing for local leasing companies. its equipment, PrintWorks expanded production trained thousands of people across 35 The Russia Leasing Development by 40 percent and increased labor productivity by of the 89 regions of Russia. In addi- Group also supported IFC's offices in 50 percent. Shortly thereafter, PrintWorks began tion, we provided more than 1,400 Armenia and Georgia in drafting leas- working with customers in 40 regions in Russia consultations to Russian and foreign ing legislation which was recently and even some clients in Europe. companies on the legal, accounting, passed. ProgramUpdate 4 U K R A I N E Reducing Red Tape This year's survey reveals that despite dealing with various inspecting au- in Ukraine the progress achieved thus far, SMEs thorities. Over 40 percent of the continue to face a number of adminis- surveyed companies admitted making The Partnership's annual surveys of the trative difficulties. Surveyed companies unofficial payments to government business environment in Ukraine have cited a complex and inefficient taxa- inspection agencies. been instrumental in changing policy. tion system and frequently changing Drawing on the findings of the sur- regulations of business activities as the vey, the Partnership will submit policy In October 2002, the Partnership most serious barriers to enterprise de- recommendations to the Government completed its sixth annual survey of velopment in Ukraine. Ukrainian of Ukraine for consideration. These the business environment in Ukraine. entrepreneurs spend on average one proposals include the adoption of a The survey was funded by Norway full day a week dealing with govern- new Law on Business Registration, a through IFC's Technical Assistance ment regulatory matters. Law on Inspection Procedures, the Trust Funds Program. These annual Regulatory procedures connected to Presidential Decree on Improving surveys monitor progress of and gauge launching and operating a business in Procedures for Issuing Permits, and the trends in the de- Ukraine remain com- the National Business Program. In velopment of the SME plex, lengthy, opaque, addition, the Government of Ukraine sector by identifying and, therefore, open to intends to use the Partnership's rec- the main barriers to lo- abuse. It takes about 40 ommendations to draft its yearly cal business growth. Economic Develop- IFC draws on the find- ment Program. The ings of the survey to More than 2,400 Ukrainian companies Minister of the Econ- work with the Govern- from 25 urban centers took part in the omy has already used ment of Ukraine to 2002 survey Ukraine: An Assessment preliminary results of improve business poli- of the Business Enabling Environment. the survey to highlight cies and remove legal current difficulties in and administrative regulatory policies at constraints to private working days to regis- the annual All-Ukrainian Meeting on sector development. To ter a firm. During this Small Business. date, IFC has con- process, an entrepre- tributed to amending The Partnership is concluding a simi- neur has to deal with 26 pieces of legislation, lowering the lar survey in Uzbekistan with support eight different agencies and pay up to number of government inspections of from Switzerland (seco). The Part- three times the official fee to obtain a SMEs, reducing the number of busi- nership will present the findings of registration certificate. Once opera- ness activities requiring licensing, and the survey and concrete policy rec- tional, a company faces an average of simplifying business registration pro- ommendations to the Government of 12 government inspections per year, cedures. Uzbekistan in November. devoting 23 working days annually to R U S S I A B-Schools Come to Russia Partnership undertook a study of the dominate the business school mar- higher education sector in Russia. ket, but are constrained by a Private sector education, including The study, funded by Sweden (Sida) shortage of capital and strategic business schools, are relatively new in through IFC's Technical Assistance planning. Russia but could play an important Trust Funds Program, was launched Because of demographic changes, role in its future. The demand for in April 2002 in coordination with the total number of students enter- Russian managers with solid business IFC's Health and Education Depart- ing higher education institutions is skills will only increase as Russia's pri- ment, and was completed in October expected to drop by as much as 50 vate sector develops. Technical 2002. The study provides an overview percent. assistance and investments which of private education in Russia, identi- strengthen private educational institu- fies areas where technical assistance Regulations on taxes and govern- tions, particularly those with business could be effective, and ranks private ment funding for education will programs, could have a long-term im- institutions which could be consid- have a strong influence on the de- pact on Russia's economy by bringing ered for an IFC investment. velopment of the private education modern business practices to current sector. Several interesting trends are already and future Russian managers. apparent from the preliminary find- The consulting firm which carried out IFC is exploring ways to participate ings of the study. For example: the study, Swedish Development Ad- in this process. As a first step, the visors (SweDevelop), will complete its Private educational institutions report in November 2002. thePartnershipPerspective Fall 2002 LegislationUpdate 5 U Z B E K I S T A N Uzbek Leasing Gets a Boost with New Decree "The decree will support the development of Supported by IFC a critical financial tool for the country's eco- nomic development. We expect substantial growth in leasing from commercial banks, the On August 28, 2002, the President of existing six leasing companies, as well as the Uzbekistan, Islam Karimov, signed a emergence of new leasing companies." decree on Financial Leasing. The Part- nership's Central Asia Leasing Rustam Azimov, Deputy Prime Minister Development Program, funded by of Uzbekistan Switzerland (seco), played a key role in developing the decree which re- for leasing, it is now a much more at- moves significant tax barriers to leasing nancing from significant tax advan- tractive and affordable financial in Uzbekistan. Before this decree, tages given to banks for loans. By mechanism for small and medium- Uzbek tax policy excluded lease fi- making these tax advantages available sized enterprises. T A J I K I S T A N Promoting Microfinance terprises ­ often the only source of The growth of these micro lenders is in Central Asia employment in Tajikistan. constrained by existing legislation Currently there are no independent that does not allow them to operate The Partnership works to develop commercial microfinance institutions independently from these interna- the legislative framework to spur in Tajikistan. The only micro credit tional groups and still provide credit commercially viable microfinance lenders are non-governmental organ- to local entrepreneurs. The new leg- lending in Tajikistan. izations established with seed money islation will enable them to do that from and operating under the um- and will allow them acquire the status of commercial microfinance institu- In October 2002, IFC's Partnership brella of international aid agencies. tions. The project will launched the Microfinance Legisla- also train the National tion Development Project in Bank of Tajikistan on suit- Tajikistan in cooperation with the able supervision and United States Agency for Interna- regulation of the microfi- tional Development (USAID). The nance sector. project will work with the National Bank of Tajikistan and the Tajik Gov- The project builds on the ernment to develop a new legal successful IFC-USAID framework for microfinance. The partnership to create mi- development of a sustainable microfi- crofinance legislation in nance market is critical to the the Kyrgyz Republic in development of small and micro en- July 2002. PrograminFocus Improving Support Services and Business Environment for SMEs The Partnership works both to build support services and improve regulatory conditions to spur the growth of small businesses. Small and medium-sized enterprises a lack of financing, management skills, ship develops local business support (SMEs) in the countries of the former business and commercial information, services and works directly with na- Soviet Union have emerged as the and by excessive government regula- tional governments to improve fastest growing segment of the econ- tion and interference. policies and legislation affecting the omy and one of the largest sources of To build an environment conducive SME sector. employment. Yet the potential growth to the growth of SMEs, the Partner- of the sector has been constrained by continued on page 6 PrograminFocus 6 continued from page 5 vocacy techniques to promote Work with the World Bank to reform of the regulatory environ- develop business policy recom- Building SME Business Support Services ment. mendations that governments The Partnership works with business should address as a precondition Improving the Regulatory Environment associations and consulting compa- to receiving loans. for SMEs nies to introduce better business Currently we work with business as- practices and develop local business To improve the business-enabling sociations and consulting centers in skills. To help them grow into viable environment for SMEs, we: Belarus and Uzbekistan and conduct professional organizations, we: Survey the SME sector to identify SME surveys in Ukraine and Uzbek- Train them to provide modern the main trends in its development istan. These programs are funded by information and business support and to identify the main adminis- Norway, Sweden, Switzerland, and services to SMEs, including bus- trative and regulatory obstacles to the United States. iness planning, management prac- SME growth. In addition we support SMEs through tices, market research and market- Draw on the findings of our sur- our other programs. For example, we ing, partner search, and the use of veys and company-level work to increase access to financing for SMEs new information technologies. develop recommendations to im- by developing and working with fi- Advise them on how to manage prove national business policies nancial intermediaries, such as leasing their own businesses and develop and legislation. companies and medium-sized banks. strategies to attract new clients and Advocate policy and legislative re- We also work directly with SMEs to members. form through public education link them into the supply and distri- bution chains of large companies (see Build them into strong advocates campaigns and through dialogue Winter 2002 issue). for SMEs by developing their legal between small businesses, govern- skills and training them to use ad- ment officials, lawmakers, and mass media. continued from page 1 another month and cost $120. Belarus SME Development Even then, it may not be over, as authorities might arbitrar- Project - IFC Corporate Award ily call for "re-registration" ­ Winning Project something like asking mar- ried couples to re-marry each "The project has reached every fifth other. You will also have to entrepreneur in Belarus, providing them pay up to 30 different taxes with business skills or representing and fees and face about 10 their interests. But more importantly, the government inspections per project has built a network of local organizations to make this assistance to year. No wonder the number local businesses sustainable and of SMEs in Belarus remains effective." low at 2.5 per 1,000 people. The Partnership's SME Busi- Carl Dagenhart, Project Manager, ness Development Project has Belarus SME Development Project. been working to address these problems. The project pro- What does it mean to be an entre- motes policy reform, educates preneur or a small business in entrepreneurs on their legal Belarus? To register your business rights, and develops local busi- you have to go through six different ness support services. To state agencies ­ a process that takes ensure long-term sustainabil- an average of two months, and pay ity, we work with 18 Belarusian business Improving the Business Enabling $200 in various fees (equivalent to associations and centers to build their Environment two average monthly salaries). organizational capacity and develop To improve the business environment Chances are high that you will be re- their advocacy and consulting skills. for SMEs, the project provides input quired to get a license ­ after all, over The project, which was funded by the to the World Bank's Country Assis- 165 of business activities require li- United States (USAID) until October tance Strategy that outlines policy censing in Belarus, such as selling 2002, will continue with funding from issues the government needs to ad- hand-knitted socks. That might take Sweden (Sida). dress to receive World Bank assistance. thePartnershipPerspective Fall 2002 ImpactOnTheGround 7 The project also conducts public edu- The project has successfully advo- Developing Professional Support Services cation campaigns to explain the cated for over 40 legislative changes. The project trained business associa- importance of SMEs, raise public For example, government authorities tions on modern business support awareness of the main constraints to no longer have the right to confis- services from developing business business development, and advocate cate business property outside the plans to using public relations tech- for policy reform. In all six regions of court system, business registration, niques. Now the project assists the the country the project set up business operations, and taxation procedures associations in organizing their own press clubs where representatives of have become much simpler. training programs for entrepreneurs. the government, the private sector, In addition, the project guided the and the media meet regularly to dis- Educating Entrepreneurs about associations in introducing a fee for cuss business development issues. This Their Rights these services. Since its inception in generates about 85 print articles, radio June 2000, the project has conducted and television broadcasts per month on To help SMEs make sense of com- over 250 seminars and training topics relevant to SME development. plex and frequently changing business legislation, the project works with courses for more than 9,500 people. The project also helps business asso- business associations to analyze exist- Building Local Capacity ciations address specific legal and ing business legislation, clarify legal, administrative issues, thus, building accounting, and taxation issues. Since the Partnership began working their advocacy and legal skills. Many with Belarusian business associations, of the successful advocacy campaigns The project also helped establish a their membership base has increased at the local level led to regional and hotline to provide on-the-spot legal by 60 percent and their client base national legislative amendments. advice to entrepreneurs. About 600 has doubled. Increasing membership Each victory helps business associa- entrepreneurs call the hot line each and service fees ensure the associa- tions attract new members. month. tions' sustainable growth. `What's in a Name?' ate strong local advocates for SMEs. The Club was estab- Belarusian entrepreneurs find out. lished in 2000 starting with 11 members. The leadership In the city of Grodno in Western Be- of the Club had enthusiasm larus, local government authorities but lacked the essential skills allowed 86 individual entrepreneurs to represent their members to set up trading booths along one of effectively and grow. By 2001, the city's streets. For aesthetic rea- the Club was stagnant and sons, the authorities required all of ineffective. the entrepreneurs to purchase a par- ticular type of booth priced at $1,500 IFC, with funding from each, or about 15 times the monthly the United States (USAID), revenue of a small trader. Once the worked with the Club to de- entrepreneurs began operating, the draw public attention to this issue, velop and implement a growth local authorities decided to call these the Club of Entrepreneurs also or- strategy. This strategy included ex- booths "kiosks." What difference does ganized a media campaign in the local panding the Club's services beyond a name change make? It means an ad- press. As a result, the city administra- small businesses to include individual ditional $300 in fees for purchasing a tion agreed to define the row of entrepreneurs, adding business sup- new trading license, getting clearance booths as a "mini market." What dif- port services, conducting direct from the fire and health departments, ference did this name change make? marketing and media campaigns, and signing a security contract with local It allowed the entrepreneurs to re- establishing working relations with police ­ or about a month and a half sume their trade and reduced their government authorities at all levels. of additional time going door to door taxes by 11 percent. Additionally, all IFC also worked closely with the Club to various government inspection au- of the 86 entrepreneurs joined the on a number of advocacy campaigns thorities. Grodno Club of Entrepreneurs where to provide hands-on training and IFC's partner, the Grodno Club of they will be better positioned to pro- build the Club's legal expertise. To- Entrepreneurs, contested this deci- tect their interests in the future. day, the Grodno Club of Entre- sion with the city administration and The Grodno Club of Entrepreneurs preneurs has 252 members and 14 petitioned to define the 86 trading is one of the 18 business associations district representatives. booths as a single "mini market." To IFC works with across Belarus to cre- ProgramLaunch 8 R U S S I A From Outer Space to the project will also train farmers in Russian Farms growing better feed for cows and im- proving the quality and yield of milk The Partnership brings hydroponic production. technology developed for space to DokaGene has been active in Russia Russian potato farmers. since 1996, and specializes in the production of seed and table pota- toes using unique hydroponic Something isn't quite right with the technology. This technology, devel- potato industry in Russia. Even oped in part by Russian scientists in though Russia is the world's second the space industry, allows for the largest producer of potatoes ­ pro- production of high-quality seed po- ducing over 30 million tons per year, tatoes more quickly and at a it has not managed to develop a po- significantly lower cost than with tato processing industry. Few Russian traditional technologies. potatoes have the size, shape and quality required for processing into The project will focus on transfer- French fries or potato chips. Even ring Canadian technology and MacDonald's, with its vast local sup- methods to local Russian farmers. plier network built during a decade Using seeds of a superior potato va- of operations in Russia, still imports riety, provided by DokaGene, through IFC's Technical Assistance potatoes from Poland. farmers will be trained in field prepa- Trust Funds Program. The Partner- ration, seeding, better use of To help Russian farmers capitalize on ship will work closely with a pesticides and fertilizers, and in the growing demand from the potato Canadian-Russian joint venture, use of modern agricultural equip- processing industry, the Partnership DokaGene Technologies, to assist lo- ment. The project will also take on launched the Dmitrov Potato and cal farmers in growing high-quality the notorious Colorado Beetle, which Dairy Production Project in July 2002 potatoes suitable for processing. To destroys up to one-third of Russia's with funding from Canada (CIDA) satisfy crop rotation requirements, potato crop per year. In addition, the project will help farmers develop supply relationships with DokaGene, which will in turn supply processors with large quanti- ties of high-quality potatoes suitable for processing. Western processors establishing operations in Russia are the most likely customers, and if all goes well, MacDonald's customers may one day be munching on pota- toes grown locally. When bringing cargo to space, every pound counts. Hydroponic technology to grow vegetables in The Project may also result in Cana- space was developed to address this issue. Instead of using soil, vegetables are grown in a light dian equipment sales to the farms spongy material using mostly water and some nutrients. The benefit to the rest of us on Earth ­ the through the recently established ability to grow superior quality virus-free vegetables. DokaGene grows potatoes using this technol- Agro-industrial Finance Company, ogy for four crop seasons to produce a large volume of seed potatoes to supply to Russian farmers. another of the Partnership's programs (see Spring/Summer 2002 issue). The Partnership Perspective is Editor: Irina Likhachova 7/5 Bolshaya Dmitrovka Street 2121 Pennsylvania Avenue, NW a publication of the IFC's Private Building 2 Washington, DC 20433, USA Contributors: Nezhdana Bukova Enterprise Partnership. Moscow, 103009, Russia Tel.: + 1 (202) 458-0917 David Lawrence Tel.: + 7 (095) 755-8818 Fax.: + 1 (202) 974-4312 Geoffrey Mercer Fax: + 7 (095) 755-8299 www.ifc.org/pep Currency is given in U.S. dollars throughout unless otherwise specified. e-mail: ifcpep@ifc.org thePartnershipPerspective Fall 2002