The Baltic Course  

Businessmen of all countries - unite

By Olga Pavuk

In July the International Congress of Industrialists and Entrepreneurs celebrated its tenth anniversary. The Baltic course met with Viktor Glukhikh, president of this public body, uniting businessmen from 22 countries across Europe and Asia. The talk, in particular, was about participation of the Baltic states in this congress

Viktor Glukhikh (on right) and Gintaras Skobas discuss issues of cooperation

Viktor Glukhikh (on right) and Gintaras Skobas discuss issues of cooperation

Viktor Glukhikh was born in 1946. From 1966 to 1990 he worked in the Leningrad Metallurgy Plant, where he passed the way from turner to chief engineer, to the first deputy of the director general. In 1989 he graduated the academy of national economy, in 1990 he was nominated as the first deputy minister of industry for the Russian Federation, in October 1992 - as chairman of the committee on defense of industry sectors. In May 1996 Glukhikh was elected president of the International Congress of Industrialists and Entrepreneurs - an international public organization. Since 1998 he is simultaneously the chairman of the board of directors at Rybinsky Motors (now called RPA Saturn). He is a member of the board of the Russian Union of Industrialists and Entrepreneurs. In 2001 he was elected a member of the council of the Russian Federation's Federal Assembly from the Yaroslavskaya region. He is a permanent representative on the federative council for the government of the Russian Federation. He is a Doctor of technical sciences, an academic of Russian and International engineering academies. The winner of prizes from the Russian government, titled as an Honorary industrial engineer of the Russian Federation. He is married with a son and daughter.

Mr. Glukhikh, what is the main purpose of the organization you head?

The International Congress of Industrialists and Entrepreneurs is an international non-governmental, nonprofit public organization, which was created in the purpose of activity consolidation for industrial and business associations from different countries, to shape stable economic relations, to support bilateral and multilateral programs and projects on the cooperation of commodity producers from the various countries. ICIE was founded in February 1992.

At present, the Congress unites the national unions of manufacturers and businessmen from Azerbaijan, Armenia, Belarus, Bulgaria, the Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Poland, Russia, Romania, Serbia, Slovakia, Tajikistan, Turkmenistan, Uzbekistan, and Ukraine. Since 1993 the Chinese Union of Industrialists and the Chinese society of friendly relationships with foreign countries also take part in the work of the ICIE as observers.

Permanent partners of the congress include over 200 enterprises, organizations, companies, and other managing subjects from various sectors of European and Asian countries.

The International Congress of Industrialists and Entrepreneurs has an official status at the United Nations Industrial Development Organization (UNIDO), at the Interparliamentary Assembly of the Commonwealth of Independent States (IPA CIS), with relations also exercised in permanent cooperation with international centers of scientific and technical information, the International Union of Commodity Producers, many transnational corporations, international, financial and commercial structures from various countries. The cooperation system is formed together with the executive secretariat of the CIS.

The Honorable president of the congress is Arkady Volsky - a well known public and political figure, president of the Russian Union of Industrialists and Entrepreneurs.

ICIE acts on voluntary basis, self-governance and openness of information, in strict correspondence with national legislation and international rights. For the years of its existence, the Congress has conducted a row of forums in the manner of assemblies, the congress councils and economic conferences in Austria, Belarus, Bulgaria, Hungary, Kazakhstan, China, Kyrgyzstan, Lithuania, Poland, Russia, Slovakia, Ukraine. The eminent representatives of business circles in these countries with participation of government officials, scientists and specialists, discussed the vital problems of trade and economy, research and production cooperation. Amongst the last of these were the international conference on Problems of the Industrial Development and Economic Cooperation in Context of Global Changes in Economic and Financial Systems, held in Vienna, spring 1999, informational materials from this conference were sent to governments of all interested countries. In June 2000, in the Lithuanian cities of Vilnius and Klaipeda, the ICIE conducted a forum on The Problems of Transit and Transcontinental Economic Development in the Globalization Process of Economic Relations. In October 2001 the 7th ICIE assembly was held to hear reports and elect new officials, define further ways for the organization's development. In December the same year, the congress organized an international exhibition on Industry and Transport: Cooperation and Collaboration, were the latest industrial, transport developments and investment projects were presented. Within the framework of this exhibition, a scientific and practical conference of the same name took place, during which Russian and foreign scientist and specialists discussed a broad circle of issues on economic cooperation. The extended meeting of the ICIE presidium summed up the results of the work of the International Congress for the ten years of its existence, taking place in Kiev on February 15 this year.

In its practical work the congress renders all possible assistance in building regional and direct economic relationships, shaping the transnational economic associations, financial-industrial groups, financial-credit institutions, and joint-ventures. The ICIE constantly analyses the position of agreements in this sphere, reveals the barriers towards the free movement of goods, services, capital and labor, working out suggestions for their removal. Besides this, the congress draws up efficient mechanisms for the regulation of economic legislation, improvement of the legal basis for cooperation and conducts reforms in economy and protects the interest of business circles. As an authoritative public organization the ICIE participates in development, expert operation and realization of business projects and initiatives, in information and research exchange, publishing in specialized, sector and the general mass media.

In the list of ICIE activity directions includes the organization of meetings, consultations, negotiations on cooperation between members of the congress, business partner selection, undertaking of presentations, exhibitions, contests, and demonstrations of products made by members of the ICIE.

The congress renders assistance in the attraction of investments for development production and the private sector, searching for alternative sources in financing, organizing cooperation with national and international banks, financial funds and other financial or credit institutions, preparing suggestions for problems of industrial and business structures in their activities with intergovernmental and legislative organs, authoritative institutions of different levels. Specialists of the ICIE possess significant experience in undertaking scientific, legal and juridical consultations, in organizations of insurance coverage, in preparation of specialized business tourism trips, activities for increasing business and professional qualification levels for industrialists and entrepreneurs and leaders of different levels.

Most recently an agreement was signed under the assistance of the ICIE on long-term cooperation between the Volgograd steel cable plant, the largest in Europe, and a similar Bulgarian enterprise from the town of Roman. The agreement was on product output to third countries. At present the ICIE is conducting negotiations with a number of enterprises and organizations in Hungary on the development of large programs for energy saving technologies. The project on the creation of a united information-marketing system for national unions of states, developed by the congress, could become very promising. It will help to realize the fast and full exchange of commercial requests and offers, searching for partners etc. The creation of a general system of electronic trade, an international internet-trade network is planned. Besides this, the ICIE is working on the realization of seven programs with the UNIDO, aimed at training the personnel and the introduction of modern advanced technologies.

For increasing the volume of attracted investments in real sectors of the economy, the ICIE and the National Union of Industrialists and Entrepreneurs are working on the development of an investment-leasing company, as well as an International fund for the support of development programs. This fund together with UNIDO will support the projects and programs directed at extending the economic potential of the country-members of the ICIE.

How long have Estonia, Latvia and Lithuania cooperated with the ICIE and through what organizations?

It must be said that business circles from the Baltic states were the first after the disintegration of the Soviet Union to have come forward with the initiative for creating such an organization, concerning the economic integration of the post-Soviet regions. Since the moment the International Congress was founded in early 1992, Baltic state colleagues actively took part in its work. Present ICIE members from the Baltic states include the Latvian Central Union of Cooperative Societies Turiba from Latvia (chairman Ivars Strautins), the Confederation of Western Lithuanian Industrialists (president Bronislovas Lubis) and the Union of Young Businessmen of Lithuania (Gintaras Skobas) fron Lithuania, as well as the Union of Economic Associations of Estonia (president Yuri Kraft) and the Association of Large Businessmen of Estonia (Urmas Syyrumaa).

Do the participants of the ICIE that deal with oil transit consider the possibility of participating in the privatization of large Baltic state enterprises?

Without entering into the area of concrete commercial interests held by ICIE partners, I shall say that the economy of the countries that are members of the International Congress, including the Baltic states, are traditionally bound between them. The objective processes of globalization will promote the expansion of these relationships. So, considering modern economic trends in the world, the commercial interests of Russian management subjects can assume material form in the manner of actions of some Baltic companies. If we speak about transit, then for Russian participants of this business, the seaports of the Baltic states are very interesting for them. And I would not exclude that, giving their own economic interest, anyone of them may want to become a co-owner in one or other port. I can say only one: this would be advantageous for both sides.

What questions are raised by the International Congress for itself in the light of the Baltic states becoming members of the European Union?

Well, the negotiations for entering the European Union have really already been completed or close to termination in the majority of countries from Central and Eastern Europe and the Baltics. And this is certainly a positive fact for these states. However, it carries with itself some problems towards which we can not close our eyes. Most of these, in my opinion, are the possible complications of trade relations between these countries and Russia and the CIS. As I have already said, the economic systems of our countries are bound together and exist in a common economic area. One of the particularities of this space is that a main foreign vendor of energy systems and the main sales market for the Baltic states was and remains Russia. And in the visible prospect for the reorientation of economic interests of the Baltic states towards other directions will be problematic. The joining of any country to the European Union as a full member expects the tough introduction of "over protectionism" duties on goods and service imported from states that are not members of the EU or not associated with it. An estimation of the European Commission and Deutche-Bank, the level of import duties in candidate countries of the EU will increase after their entering the union by at least one third, but duties on exports by 20-40 percent (in trade with non-EU members). In the meantime, exports of these countries have long ago been aimed at the market of Russia and other CIS countries. Although August 1998 and the Russian economic crisis has brought a reduction of exports to the former Soviet Union, since spring-summer 1999, a trend of gradual growth of East European and Baltic state deliveries to Russia and the CIS as a whole is noted. This connected with protectionism requirements of the European Union, is targeted in essence, on the unilateral advantage of European producers-exporters in Eastern Europe and the Baltics.

According to estimates, by 2003-2005 Russian losses from the introduction of such "Euroduties" in the mentioned countries or new members of the EU can result to 700-800 million US dollars annually, including a reduction of exports for Russian oils and gas on around 400-500 million US dollars. However, their counter losses are valued in 500-650 million dollars, including Estonia, Latvia, Poland, Hungary and Cyprus from the reduction of Russian foreign trade transit (because of increasing transit tariffs), worth around 250-300 million US dollars a year. We should mark that over 75 percent of the demand for energy resources is provided by supplies from Russia (which is also 15-25% cheaper than EU resources). What's more is that on average 25 percent of revenues for the treasuries of the Baltic states are made up from the transit of Russian exports and imports.

The Baltics today can not ignore the role of the Russian market for their economies. And this is the point which the governments of the Baltic States must think of first of all.

How could you value the activity of Lithuanian ICIE members?

The Lithuanian Association of Businessmen, these being the Confederation of Western Lithuanian Industrialists and the Lithuanian Union of Young Businessmen, are the most active and dynamic members of the International Congress. Our Lithuanian partners were the initiators of the International Economic Conference, which the ICIE conducted in June 2000 in Vilnius. Its subject was the development of transit and transcontinental economic development in the globalization process of economic relations. First of all, This looked upon problems of gradual liberalization for the transport market of all countries, harmonization of national legislation with international standards, EU legislation and rules of the EC and UN, improvement of border crossing procedures and customs procedures. The meeting in Lithuania saw a declaration passed along with a recommendation for entering the new century, this being enterprise as a criteria for civilization. It included suggestions for the barriers stalling enterprise development, the need for creating conditions of free competition was declared, as well as the security of business on part of the state. During the conference the inauguration of the ICIE branch in Lithuania took place, which is headed by the president of the Lithuanian Union of Young Businessmen, Gintaras Skobas.

I would like to note the great work conducted by our Lithuanian colleagues within the framework of the ICIE. The cooperation projects presented by them in the fields of energy, transport, and trade promotion work towards real integration and serve for the mutual benefit of all participants of economic cooperation in the post-Soviet regions.