The U.S.-Russian Trade Office Newsletter

Issue 1, January 1996


Andrei V. Izurov, Program Administrator and Trade Office Manager: a Russian citizen with extensive East European business experience in addition to U.S. investment background. Holds MBA from the University of Massachusetts with major in International Business and Finance. As Pskov/UMass liaison and project translator, has provided clear and effective communication since the partnership's initial development in 1992. His knowledge of the Pskov region and its top administrators has proven invaluable


Inside This Issue:


Pskov Region: Economic Profile

The Pskov Region (oblast) is located in North-Western Russia and is bordered by Estonia, Latvia and Belarus. The region covers approximately 13,700,000 acres (55,500 square km) and supports a population of 841,000, 64 percent of whom live in urbanized areas. The major city of Pskov (207,400 people) is 4 hours from St. Petersburg and Tallinn (Estonia), 12 hours (by train) from Moscow. The city has an international airport, river port, railroad and bus stations. About 10 percent of all Russian export is shipped through Pskov each year.



Getaway to Europe:

As a result of the physical restructuring of the former Soviet Union, Pskov has emerged as a frontier region in North-Western Russia bordering two Baltic nations and Belarus. Its population is expected to increase by 50 percent within the next five years due to increased immigration from neighboring states. Research, studies and other development related projects are currently underway to accommodate such dramatic political, demographic, economic and land use changes.


Export Import
Timber Cereal products
Peat Foodstuffs
Flax General consumer goods
Linen Machinery and equipment
Electric engines and generators Chemicals
Cables and wiring Fertilizers
Clothing and footwear Canned goods and beverages


The area is positioned extremely well for eco-tourism and cultural tourism. The region is environmentally the purest state in Russia. It has the largest lake system in Europe (over 3,700 lakes with overall water area of 2,100 sq. km). Almost one third of its territory (1.8 m hectares) is covered with forests. The city of Pskov was established in 903 AD making it one of the oldest in Russia and is therefore rich in historical and cultural sites. Over the past 1,090 years the city has survived no less than 26 major sieges from external warring factions. There are over a hundred churches, monasteries and cathedrals including the Pechorsky monastery, one of the world's best preserved Orthodox monasteries. Mikhailovskoye, a village-museum of the famous Russian poet Alexander Pushkin, attracts hundreds of tourists each year.

The region is especially anxious to generate new business activity and international trade with the U.S. As of January 1995 more than two thirds of its 163 large and medium businesses had been registered as joint-stock companies producing 87 percent of the total industrial output. The foreign sales for 1994 totaled 29.7 m USD, with Baltic countries accounting for almost 50 percent of it. Almost 200 joint ventures and foreign subsidiaries were operating in the region by January 1995.


Key Investment Areas:


The region is working aggressively on the development of the democratic political system and market economy. The leadership of the region is well known to the principals in this Partnership Program as people of great capacity and deep commitment to the concepts of democratic government and market reforms. There is a high level of readiness on both sides to work on and complete several projects contributing not only to the economic development of the area but also to its political stability.

The Pskov region is rapidly growing. It is in an excellent position to develop a secure and prosperous future and a good standard of living for its people. It has a wealth of agricultural lands that are currently under-utilized, an excellent location for trade and tourism, substantial forestry and water resources, an environment of very high quality, and an educated, healthy and motivated population. The Partnership Program and its U.S.-Russian Trade Office encourage all interested U.S. parties to offer the training, products, capital and expertise that will allow for the effective and rapid development of these resources and potentials.

The U.S.-Russian Partnership Program: Goals and Objectives

The goal of this USAID funded Program is to create within the Pskov Region (and Northwestern Russia) a long term institutional capacity to train students, public officials and business people in free-enterprise and democratic planning methods; and to establish a substantial group of public sector and business leaders who can lead the region toward political stability and economic viability.

As an integral part of the Partnership Program, the U.S.-Russian Office of Trade and Investment is coordinated with all of the Program activities. It can access their different material and intellectual resources in order to achieve its tasks in the most efficient way. Key elements of the Program include:

1) Opening a New Department of Regional Planning and Development at Pskov Polytechnical Institute. Ten Pskov faculty have been selected and begun to attend classes at the Department of LARP and School of Management at UMass/Amherst to develop their areas of concentration (planning and economic development in public and private sectors). Each will complete two semesters of work at UMass, teach two-three courses in this new department and be engaged in research, technical support, consulting and other public service activities. Fifty students will be admitted to the Program each year starting September 1996.

2) Pskov Center for Regional Planning and Development (CRP) functions as the research, technical support and public service arm of the Department. It staffs and maintains a computer teaching lab for instruction in GIS, computer-aided planning systems, and business management and marketing systems. It has within it an outreach capability which allows Pskov and its regional businesses to better compete in the international marketplace.

3) Professional Training Programs.

• Economic Development: Business and Trade Opportunities for the United States and Russia . Sixteen two week courses will be offered to the local businesses with total enrollments of 320 students during the two year period. Eight students will spend two weeks in the U.S. to discuss their business plans with American counterparts.

• Exchange and Mentoring Program: State and Municipal Officials. Eight public administrators from the Pskov regional and municipal government will spend two weeks as guests of senior government officials with similar duties in the U.S. Several months later, the public officials from Massachusetts will visit Pskov for two weeks.

• Geographic Information Systems and Computer Aided Planning. A total of 48 government staff, business people and professionals will receive two weeks of training in the use of GIS and other computer aided planning technologies.

The U.S.Russian Office of Trade and Investment

What's Done:

• an electronic database of the U.S. companies doing business in Russia established; work is underway to create a similar database in Pskov;

• Andrei Izurov and Robert Hopley each spent a week in Pskov and Velikie Luki meeting with local companies interested in contacts with U.S. businesses;

• Olga Rak is back to Pskov after having spent four months as an international trade specialist at the Trade Office in Amherst;

• Sen. Stan Rosenberg and Mayor Jeffrey Bean of Fitchburg spent two weeks visiting Pskov in December of 1995. An agreement to establish sister city relationship between two cities was signed with the Mayor Alexander Prokofiev of Pskov ;

• market testing conducted: several Pskov craft items were exhibited at the Russian store in Fitchburg, MA, on a trial basis to introduce them to the market and capture data on product demand and pricing.

Work in Progress:

• Fitchburg-based ACHLA Design is planning to subcontract manufacturing of fire place appliances to the Pskov cooperative. L.Bushmelev visited Poland to discuss issues of quality standards, finance and shipping arrangements with ACHLA's Polish agent;

• NPN, a Pskov based company, is considering purchasing pellets for production of plastic foam from a local Massachusetts vendor. The product demand is about 300 tons a month;

• several product samples and business catalogues of some Massachusetts companies have been delivered to Pskov. The local Chamber of Commerce and Industry is in process of identifying Pskov traders who will distribute the products for the U.S. companies in the region;

• a cadmium and lead test is being conducted by the Alfred University College of Ceramics to establish compliance of the Pskov ceramicware with the U.S. standards.

New Business:

• The Pskov Regional Administration and U.S.-Russian Office of Trade and Investment (Pskov) are looking for the U.S. investors to establish an International Business Center in Pskov. IBC will provide office and exhibit space, interpreters, secretarial support, counseling, legal and accounting services to foreign firms.

• The Pskov Chamber of Commerce and Industry is seeking a foreign partner to finish a four-star 167 units hotel in Pskov. When finished, the hotel is expected to receive 35,000 visitors per year.

• The "Rostek-Pskov" company is looking for the U.S. trade partners to establish a retail network. The company provides construction, transportation, custom clearance and warehousing services with annual sales of 11 m USD.

• The trading company "Torgovyi Dom Sirin" is looking for a supplier of foodstuffs. CIF St.-Petersburg. All types of canned goods, beverages, dairy and cereal products considered.

The Pskov Connection

Even before the demise of the Soviet Union in 1991 the University of Massachusetts had begun a working relationship with the Leningrad State Technical University. In particular, there were contacts with the Management Training Center (MTC) located in Pushkin (outside St.-Petersburg) in the former palace of Count Kochubei.

Through the MTC a two-week visit to Massachusetts for a delegation from the Pskov region led by the Governor Vladislaw Tumanov was arranged in October 1992. The delegation included the newly elected Pskov city mayor, Alexander Prokofiev, and three key Pskov public officials. This visit began a connection that has grown ever stronger, leading to the present US-Russian partnership grant.

This last Thanksgiving I was fortunate enough to be able to visit both Pskov city and Velikie Luki, the second city of the region, to teach about forging Western business contacts. Over 300 people attended the classes and lectures and there are at least ten significant companies working on "Western-style" business plans with the help of our Pskov partner, the Center for Regional Planning (CRP). The CRP Director Alexander Zadontsev was one of the October 1992 visitors.

Of particular note to American businesses may be a garment manufacturer, Slavyanka, that is currently expanding and doing a great deal of contract garment manufacturing for German and Canadian importers. Much of Slavyanka's equipment is modern, manufactured in Austria, and like other Russian manufacturere's they are seeking Western partners who can market their goods in the West, taking advantage of their low costs, skilled work-force and high quality standards. They give the lie to the simplistic notion that all Russian goods are poor quality.

Another great prospect is Velikie Luki Mebel, a furniture manufacturer producing bed-frames, tables, desks and other wooden products for IKEA, the Swedish furniture giant, as well as several other European companies. Price, custmer service, reliable delivery, consistent quality, in other words the basics of western commerce, all come naturally to this company.

There are many more companies that the trade office has information about. Opening some of our market, taking advantage of theirs, a little modest investment and the astute western business will see significant growth over the next few years. Remember, Cosmopolitan magazine's third largest monthly production run is in Russia...who is doing all that advertising and why?

Prof. Robert Hopley, Director, Economic Development Program


Read In Our Next Issue: Doing Business in Northwestern Russia


Copyright © 1996 Andrei V. Izurov. Please e-mail your comments and suggestions to: izurov@som.umass.edu