Black Sea Wines – A New Blog

We have started a new blog called Black Sea Wines. You can find the blog at http://blackseawine.kolodkin.com. Black Sea Wines is all about the wines of Eastern Europe, Central Asia and the Black Sea region. The blog will discuss the wines, wineries, winemakers, festivals and events and the wine business and industry. We will have reviews, interviews, news from the Internet, stories and much more. The purpose of the blog is to be informative about wines in this region and to be fun.

Some of the current posts are:

Interviews with Nimrod Kovacs of Kovacs Nimrod Winery in Hungary and Marc Dworkin of Bessa Valley Wines in Bulgaria, makers of Enira wines
– Reviews of Corten Pinot Noir (Moldova), Avia Pinot Grigio (Slovenia) and Ganja Sharab Matrasa (Azerbaijan)
– A calendar of wine related events around Central and Eastern Europe

Expected posts in the near future include an interview with Sebastijan Tomic of Plavac Mali winery in Croatia and reviews of the famous Bulls Blood wine of Hungary, the 2007 Egri Bikaver Dry Red Wine and 2007 Negru de Purcari, the top of the line from Moldova’s Purcari winery.

Our goal is to make this an international blog for anyone with an interest, professional or personal, in wines from this region.

Please check out the blog and sign up to Follow By Email. Feel free to submit content. Also, if you have a website related to wine and want to exchange links, please let us know.

Tell all your friends about us. Even the snooty ones that only drink the fancy French stuff. We want lots of readers.

You can contact us at: blackseawine@kolodkin.com

Investment Promotion – How You Deliver the Message Matters

On Thursday, March 3rd, I attended an Invest in Slovakia session in New York City sponsored by the Slovak Government and KPMG.  The session was held at KPMG’s offices on Park Avenue. I often work with foreign governments to help them attract foreign trade and investment.

The event featured presentations by the Slovak Ambassador to the US, the former US Ambassador to Slovakia, the Slovak Minister of Economy, the CEO of the Slovak Investment Agency (SARIO), the Chief Commercial Officer of Citi in Slovakia, Executive Director of the American Chamber of Commerce in Slovakia and the Head of Transaction Services for KPMG in Central and Eastern Europe. All the presentations were cogent with clear, well-organized slides in business English.  A networking session followed the presentations. There was even a buffet lunch that was well beyond the usual turkey sandwich. All the presentations revolved around a central theme — if you are doing business in Central Europe, Slovakia is your destination because of its stability, location, business environment and ratio of labor productivity to labor cost.

When I compare the Slovakian presentations to other European countries further East, I recall Communist-style speakers, slides with mistakes, endless economic statistics irrelevant to business people, excuses for the political situation, and a depiction of the business environment as, “We have made many reforms. Our business environment is not nearly as bad as you might think.” Comparatively, many of these countries have larger and younger populations, more natural resources and seaports yet you would not think of them as superior investment destinations based on how and what they present. Slovakia is a small, landlocked country with limited natural resources but was presented in the most positive light possible.

The moral of the story is that it matters HOW you say it.

Attending New York City Business Events?

If you are attending any of the following events in New York City,

  • Moldovan Chamber of Commerce meeting on February 23rd.
  • United Nations University entrepreneurship and development seminar on February 24th.
  • Wine Expo on February 25th.

Please contact me.

Excellent Article on Economic Diversification from Booz’s Business Strategy Magazine

This article in Strategy + Business makes the case that the economies which are sufficiently diversified will have a quicker recovery from the economic crisis.

Thoughts on Egypt II: The Revolution Will Be Live

Tremendous hoopla surrounds the use of Twitter, Facebook, social media and technology in the downfall of Mubarak. As someone who began working in the technology industry twenty years ago and has seen its transformative power, I believe the use of social media and technology in Egypt was definitely a facilitator for the Egyptian revolution, maybe an enabler, but certainly not a cause or primary factor. The rapid transfer of political ideas among those who want to rebel predates the mobile phone.

Iranians listened to smuggled cassette tapes of the exiled Ayatollah Khomeini prior to the 1979 revolution. As a teenager in the 1970s, I listened to a speech by a Soviet dissident (Sorry, I can’t remember who.) who spoke of using carbon paper to make and distribute illicit copies of the outlawed Gulag Archipelago by Aleksandr Solzhenitsyn in the Soviet Union. He and his fellow purveyors of Samizdat or underground literature debated whether to use thicker paper which would produce three copies or thin, onionskin paper which would produce five rather perishable copies. They ultimately decided to use the thicker paper to ensure that the words would last and be distributed to as many people as possible.

The message is more important than the medium. Ultimately, what matters is the will of the people. Bastardizing Gil Scott-Heron’s, The Revolution Will Not Be Televised, Egyptian people were “… in the street looking for a brighter day.”

Take the Poll on the Role of State-Owned Banks

You can take the World Bank’s poll on the role of state-owned banks in promoting financial stability.

For info about the poll and the issue, go to the All About Finance blog.

Improving Global Economy Means Optimism for Eastern Europe Investment, Right? Maybe Not This Week … Criminal Image Issues

As optimism prevails for a global economic recovery, one would assume that the prospects for increased investment and commerce in Eastern Europe are on the rise. Prospects are likely on the rise but the recent news stories about trafficking, maltreatment of immigrants and organized crime hardly burnish the image of Eastern Europe as a place to do business.

Yesterday, a bomb exploded in a Sofia, Bulgaria building serving as the home of Galeria magazine. Galeria published a series of wiretaps on alleged nepotism and corruption among high-ranking officials, including the country’s prime minister, Boyko Borisov. The explosion, seen as an act of intimidation, detonated a few hours before the arrival of four EU commissioners in Sofia. A less exciting story on the same day was the news that Romania’s customs chief was being sacked because of corruption.

On Wednesday, we learned from The Economist that Afghan and African “asylum-seekers are subject to abuse, exploitation and torture” in Ukraine. Ukraine is a key transit point for illegal immigration to the European Union. CNN.com published a story on Monday calling Romania, the center of human trafficking in Europe.

That was just this week! Three weeks ago, three Albanians were killed in anti-government protests resulting from a corruption scandal.

This lawlessness, or at least perception of lawlessness, does matter. Romania and Bulgaria’s scheduled March 2011 entry into the Schengen zone, allowing free movement among the EU nations without visas or passports, has been blocked by France and Germany. Corruption, poor border control and illegal movement of goods and people were noted as causes for the delay.

As the economy improves and investment funds become available, in order to compete with markets in Asia and Latin America, Eastern Europe must improve governance and civil society in order to be perceived as a competitive destination. Looking at market size and growth rates, the region’s competitiveness compared to the BRIC or larger Asian countries is limited. One of Eastern Europe’s key competitive advantages should be lower country risk – European integration (NATO and EU), democratic governments, support for human rights, etc.

Recent incidents bring credence to the perception of the region as a risky place. In order to improve their global image as a place to do business, the nations of Eastern Europe have a tremendous amount of work to do at home.

Blogs on Emerging Markets Economics

Here are links to some good blogs related to emerging market economics and business.

  • BeyondBrics is Financial Times’ emerging markets blog.
  • One of the leading economic soothsayers, Nouriel Roubini, has a blog that should not be missed.
  • The International Financial Corporation (IFC), a division of the World Bank Group has an emerging markets blog called Innovations in Emerging Markets.
  • One of the Wall Street Journal blogs is ROI where “personal finance meets current affairs.” This blog has both US and internationally oriented posts.
  • WSJ also offers New Europe about Central and Eastern European economics.
  • Mark Mobius, the major player for Franklin Templeton in emerging markets and a key investor in Romania, has a blog.

Personal Feelings About Egypt and Hopes for Democracy

Egypt is a place that I think of fondly. My international career really started in Egypt in 1991 and I have returned a dozen times or so. Many foreigners see Cairo as a dirty, loud, chaotic place. I see it as a Middle Eastern New York City — big, crowded, fast-paced, river running through the middle, open all night, good food, music on street corners, etc. — bright lights, big city if you will.

What struck me most about the Egyptian people was their love of family, talking and a surprising lack of fundamentalism and xenophobia. Sitting around a table filled with Egyptian culinary delights such molokheya, kushari and mahshi while talking about politics and world issues is a true delight.

Many Egyptians with whom I spoke held cosmopolitan points of view. They remarked that any differences with Israel were political and not religious or ethnic. I remember speaking with the Army’s Chief of Staff, number three or four in the Egyptian military, after a protest by members of the Muslim Brotherhood. He was not a fan of the Brotherhood’s viewpoint. The General remarked that when he was a boy, he lived in a Jewish neighborhood in Cairo. His apartment building had seven units with three Jewish, two Muslim and two Coptic Christian families living in them, and everyone got along famously. That was his Cairo.

Thus, my hope is the outcome of the demonstrations for Egypt is a pluralist democracy. However, there is little history of pluralistic democracy in this part of the world. The fear of the West is that the fundamentalist religious groups being better organized, funded and intensely committed would be able to exploit any power vacuum and the putative Mohammed ElBaradei would be another Dr. Shapour Bakhtiar of Iran.

Pessimists believe that a ‘wrong’ turn of events in Egypt and Tunisia could quickly radicalize the Middle East. Those who believe there is potential for democracy in Egypt see the current situation as an opportunity to achieve a democratic foothold that could spread throughout the region far better than the Iraqi ‘democracy’ did.

A key to a peaceful outcome is if prolonged unrest will cause further economic despair. Economic despair rather than religion or political ideology tends to be the root cause of upheaval. (Please see Afghanistan blog posts.) When the protests started, their focus was failed economic policies and corruption.

A huge segment of Egypt’s population is under thirty years of age, many of whom are out of work. Young, unemployed males who are discontent with the society and their economic status are targets for radicals. If protracted unrest causes further economic disruption and more young men are out on the street, it’s bad news for folks wanting cooler heads to prevail.

For the most part, the US and the West are spectators to what is happening in Egypt with little capability to influence events. What should the US and its allies do? Here’s some suggestions.

1.) Keep America at a distance from any individual. The US must be seen as backing the Egyptian people and not a particular leader. America is viewed as a backer of President Mubarak and he is the dictator being repudiated. While there is still respect for the US in many sectors of Egyptian society, anything viewed as imperialism or helping Israel will not help the pro-democracy forces. America should play a behind-the-scenes role and support the right people and processes but not be seen as an advocate of a particular person; i.e. Mubarak, The Shah, Saddam Hussein, Ahmed Chalabi, etc.

2.) Keep cool on the Muslim Brotherhood. Related to “keeping distance from any individual”, the US and its allies needs to be careful on its rhetoric and activity regarding the Muslim Brotherhood. While pro-democracy supporters in the West fear a radical takeover in Egypt, criticizing the Muslim Brotherhood, whom also have been a target of Mubarak’s political oppression, will engender distrust. The US needs to be seen as supporting the Egyptian people not waging its war on fundamentalist Islam.

3.) Food assistance if necessary. The US and other Western countries already provide a tremendous amount of foreign aid to Egypt. Increasing foreign aid likely will have little immediate impact on the peaceful transition to democracy. However, food shortages have been reported. Riots and unrest due to food shortages can bring lawlessness quickly and a rationale for more aggressive action by the authorities. Thus, food assistance should be available if necessary.

4.) Prepare the contingency plan. Previous Middle East rulers, Saddam and even America’s friend, King Hussein, have demonstrated a willingness to suppress their countrymen violently. If ‘it goes bad’ in Egypt, a plan must be ready to decapitate military action against the people. The Armed Forces thus far have been hesitant to use force and generally supportive of the people. So, a contingency plan for military action hopefully will never be implemented. However, Mubarak certainly has allies in the Armed Forces and is a former Air Force officer himself. Thus, the West should prepare itself to prevent widespread bloodshed and kindling for a larger Middle East war.

After years of observing the Middle East, I have to admit I am pessimistic about things turning out well. But I do remember arriving in Cairo right after the first Gulf War, I entered a taxi and asked the cabbie to take me to the Semiramis hotel. He replied, “UK or US?” I said, “US.” The cabbie smiled and said, “George Bush #1.” I understand the history, situation and players are different now but I can still hope. A hopeful pessimist if you will.

Local Fire – Family Needs Computer

In our community, a neighbor had a house fire. Fortunately, everyone survived but most of their possessions were lost. The family needs a computer for their daughter, a high school student. If you have an extra computer that you are not using, please contact me.