Memorandum submitted by the Confederation
of British Industry
The Confederation of British Industry (CBI)
has a large number of members with interests in Central Asia and
the Transcaucasus. These interests range from multi-million pound
investments to longstanding and substantial trading relationships.
We believe that there are clear opportunities to grow these business
links still further. The views outlined in this submission represent
the opinions of the major investors in the region and the experience
of companies doing business in these markets. It does not seek
to provide trade or investment data that is available from other
2. THE CONTEXT
OF FCO WORK
It is important to note that the political dynamics
of the region have a key impact on the way that business is conducted.
In particular due consideration should be given to the following
the significant commercial impact
of the political and economic insights given by FCO officials.
This is recognised and appreciated by business. In addition, diplomatic
assistance provided by the FCO has been central to investment
decisions in the region.
government contact is very important
in these countries. It is vital to maintain and strengthen the
network of contacts to assist in growing existing commercial positions,
to facilitate the search for solutions to business-related problems
and to best take advantage of emerging opportunities.
3. THE RATIONALE
Business feels that there are strong arguments
for an enhanced level of resources in the region. It believes
in spite of the recognition given
to the overall limitations on FCO resources, increased FCO representation
in the region is required. The Caspian Enhancement Programme will
go some way towards redressing the imbalance when compared to
the levels of representation of our major competitors. The CBI
would urge that this situation is kept under review. There is
also scope for other innovative ways of resourcing including co-location
and some hub-and-spoke networking.
high levels of experience and expertise
in FCO staff are particularly important in the region. All of
these markets often operate in a complex manner and exhibit less
than transparent characteristics. Business recognises the role
that Ambassadors play in trade matters. This is valued. There
is, however, a need for more sector specialisation in commercial
staff, particularly in the energy sector. This has already been
recognised by our competitors. For example, the US Embassy has
now appointed a full time Energy Officer.
the potential offered by the FCO
short-term secondment scheme could be utilised. The CBI played
a major role in getting this private sector attachment scheme
launched and it believes its demonstrable success could be extended.
Six-month project-based secondments to Posts in the region would
provide real mutual benefits in key commercial sectors.
the current arrangements for consular
and visa services are in need of review. This is important because
many of the major investors in the region are employers of considerable
numbers of local staff, some of whom travel frequently to the
UK. Any visa system must not only look to protect British interests,
but must also be flexible enough not to impact negatively on legitimate
commercial and political interchange.
4. THE MECHANICS
There are a number of general recommendations
that the CBI would make that relate to the way in which British
business interests could be assisted still further. These include:
the need for Cabinet-level support
and an increased programme of ministerial visits in both directions.
This would not only serve broad foreign policy aims, but would
also raise and support British business interests in the region.
This is particularly the case where strategic industries are concerned.
developing greater synergies with
British investors who remain concerned at the general investment
environment. These concerns include elements such as the treatment
of foreign investors; tax issues involving regimes, treatment
and administration; customs regulations; the legal system; and
the guaranteed protection of patents. The FCO, working with business,
has a part to play in ensuring that unnecessary impediments and
burdensome bureaucracy are not acting as deterrents or inhibitors
to commercial operations.
examining whether greater efforts
can be made in institution-building in the region. British expertise
is recognised as world-class and there are both generic and specific
advantages of assisting the proper growth of a sound institutional
providing advice on finance. Although
not the lead responsibility of government, all the markets are
classified by ECGD as "under constant review". It is
imperative, therefore, that there is timely, relevant and accurate
information that enables business opportunities to be pursued.
In addition, there is a clear need to provide details of funding
that is available from other sources such as the EU and the multilateral
institutions. This is particularly the case for major project
increasing the use of Information
Technology which would benefit more firms seeking access to information,
especially where FCO research facilities on the ground are limited.
Equally, organisations such as the CBI could share data-bases
of commercial interest with the Posts in a more meaningful manner.
full and faithful implementation
of all the recommendations contained in Sir Richard Wilson's Review
of Export Promotion will create a truly effective public-private
sector partnership in export and investment promotion. The CBI
strongly supports Sir Richard's Review and urges the Committee
to take its recommendations into account as the inquiry proceeds.