Memorandum submitted by Mr Donald Maclauchlan,
Export Director, General Electric Company plc
I have been instructed by Lord Simpson, my Managing
Director, to respond to your letter FAC/98-99/099 dated 20 January
This company currently has interests in three
of the above mentioned countries, viz Azerbaijan, Uzbekistan and
Turkmenistan. However a certain amount of reconnaissance has been
carried out into some of the others, notably Kazakhstan.
Where we do have business, the small Embassies
in place have been extremely helpful and supportive. It goes without
saying that, from the point of view of the businessman, there
are no good Embassies or bad Embassies, there are only good Ambassadors
(who are interested in commerce) and bad Ambassadors (who are
not). In a small organisation such as an Embassy, the personal
interest of the Ambassador is fundamental; Commercial staff (and
on occasion Attaches) may labour hard and long, but without the
Ambassadors' backing they will achieve little.
Our companies have commented particularly favourably
on two specific aspects of Embassy support. They have found the
locally employed Commercial staff to be, in general, highly enthusiastic
and extremely knowledgeable. Also, they have found solicited Market
Reports to be well researched and very good value for money. The
£70 fee when set against the £3000 a visit may cost
is a significant saving particularly when the report indicates
that, for whatever reason, there is unlikely to be any business.
In these small countries Britain's main interests
must be commerce of one sort or another. The political impact
of most of them is small; their trading potential enormous. However
that potential has not yet developed. In most cases their most
obvious assets are oil and gas which are hugely expensive to develop
and scarcely attractive to cash strapped majors at this time of
overproduction and rock-bottom prices.
At root these countries all remain tribal, and
their Governments work under tribal pressures no longer common
in the West. This can lead to puzzling anomalies which the businessman
finds hard to understand and the diplomat hard to talk about (or
indeed find out about).
Marconi Communications' two ventures, in Azerbaijan
and Uzbekistan, have both in their own ways fallen foul of such
pressures. It is very hard to obtain adequate hard currency exchange
authority in Uzbekistan, yet it is fairly common knowledge that
the privileged in the country have little problem in so doing.
Furthermore, in Azerbaijan, the delay in issuing the licence that
would allow the operation of MarconiCommunications' latest contract
for telephone switching equipment is almost certainly caused by
political tensions at the highest (around the President) level.
In both cases the Ambassadors have done their
best to further our interests but their leverage is limited, reflecting
the perceived status of our country.
Where, however the Foreign Affairs Committee
could help us in commerce is by understanding that our main European
competitors work under a very different set of financial ground
rules to ourselves as regards taking business. The business they
take may very well not be profitable but they do get market-share
in a way which we envy.
But to give a direct response to the matter
the committee is looking into: we do find the FCO in general,
and the Ambassadors in particular, helpful and supportive, at
times vital, in that part of the world. We would much prefer to
see the large staffs at certain other Posts curtailed than lose
people, or, worse, lose an Embassy from any of the far flung outposts.