Portfolio Prepared  on:  Summer  2013  

1 7 0 1   P e n n s y l v a n i a   A v e ,   S u i t e   3 0 0 ,   W a s h i n g t o n ,   D C   2 0 0 0 6  

     

TUYANA CHIMITOVA  Business  and  Global  Trade  

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Table  of  Contents  

CAPSTONE REFLECTION ..................................................................................... 3

INDIVIDUAL DEVELOPMENT PLAN .............................................................. 7

RESUME ........................................................................................................................ 8

CIVIC ENGAGEMENT PROJECT REPORT ................................................... 10

FORMATIONAL INTERVIEW REFLECTION ............................................. 12

WORK SAMPLES FROM THE INTERNSHIP ................................................. 14

JK Award Proposal  ..................................................................................................  15

Energy Reform in Mexico  .........................................................................................  21

WORK SAMPLE FROM THE ACADEMIC COURSE ................................... 36

ACADEMIC COURSE SYLLABUS ...................................................................... 38

PUBLIC POLICY DIALOGUE ON CAPITAL HILL ...................................... 43

                               

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CAPSTONE REFLECTION

DC City Escape was a start to my journey for growth and development in DC this summer 2013. I got better familiar with the city and its cultural heritage. Moreover, it was a scavenger type of a game that allowed getting to know other interns better. It was a teamwork learning too. Next day, I dived into my internship assignments and projects, as well as TWC activities in pursue of my IDP goals. Every Monday’s workshops were very helpful to absorb DC experience productively. 6/10/2013: Goal setting workshop was valuable to develop my IDP. The same day we had the Alan K. Simpson-Norman Y. Mineta Leaders Series @ the Department of Interior. That day I was able to ask the questions in the big auditorium, and just that fact itself already was already an indicator that I was able to put things I hear around and learn together to form my own opinion, and relate that to my profession. Indeed, I asked our speaker, Larry Schweiger, President and CEO of the National Wildlife Federation, [one of America’s most effective conservation organizations with 47 affiliates and more than four million members and supporters. He is also an active community leader, having served on more than 40 governing boards, commissions and committees], about his view on contradictory benefits countries experience from the climate change. It is known that some countries in the North actually benefit due to extended warm seasons that allow growing better and more crops, which improves national agriculture sector. 7/8/2013: I enjoyed Business Investment Strategy Exercise that our team has not won but it was still a great experience to raise capital for your business ideas. It was also a good chance to practice my public speaking skills. 7/17/2013: Public Policy Dialogue at the Capital Hill was a good experience to meet political leader Fred Turner, Chief of Staff, US Helsinki Commission on Security and Cooperation in Europe. There were only two interns, me and Monica from Germany, and Mr. Liska, our TWC coordinator. I was told how diplomatic I am in expressing my opinion on the US-Russia relations, especially on Putin’s politics. I learnt how to speak to politicians. 6/24/2013: The symposium on Civil Society and Social Responsibility was another interesting event that allowed me to estimate my own values and see how they align with the values of the world community. Melinda and Bill Gates Foundation was brought up again. That already speaks a lot in terms of how efficient they are in marketing their work among such targeting audience as TWC interns. 07/15/2013: It was a day for another speaker series event where I was able to shake hands with the Honorable Mike Moore, New Zealand Ambassador to the US. He spoke a lot on international trade issues. I learnt how having a vision and ability to speak eloquently could lead you far in your career. I also felt the gap of generations in form of the different type of knowledge our generation has today that is different from the methods used in his time. Today we are more technologically driven, precise, all based on calculations but his time teaches us to develop our gut feelings to make decisions, be humane and empathetic. 7/22/2013: City Year Compass Leadership Training was a wonderful experience to have hands-on activity such as building a tower and learning how to lead. It truly helped me to re-discover and clarify who I am as a leader, what is my leadership style, and how to work with other leaders in a team considering their strengths and weaknesses.

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7/29/2013: The World Bank discussion was valuable to better understand the WB operations and especially where money comes from.

All these aforementioned workshops helped to implement my IDP goals. Civic Engagament

I explained in a separate report so I cover academic, professional and leadership IDP implementation. In terms of ability to set and meet goals, IDP was very helpful reminder how it is important to update my goals. Constant update of IDP is another bi-monthly routine for me to stay on track and in a professionally good shape. Both academically and professionally I was able to achieve my goals to learn community and regional development tools such as private equity partnerships with indigenous people. At first time I heard it, I could not believe somebody (investors) will buy this concept/idea. It seemed to me too unrealistic, superficial and too ideal to be true. I learnt indigenous communities role in the private equity investments and business chains. They have been given many considerations in terms of partnering with them and having them on board as equal stakeholders of our projects. I was even able to speak to project manager from Mexico who was representing indigenous community. This was a striking moment to read their business plans and proposals that show their clear understanding and desire to work together with foreign investors. Here you think this is exactly what drives the economy and makes the world a better place when there are people who chase not only after profits but also social impact. Thus, I accomplished all items I set at the beginning but I still can work more on professional development because it is a constant learning process. I had no need to revise or abandon my goals except for setting new self-development goals such as learning Python and other programming languages and refreshing my memories on computational finance and cash flow analysis.

As a young professional in DC, I confirmed how it is important to concentrate on aligning

all your experiences into one comprehensive picture. The example of this connection is when I used concepts covered in Dr. Laney class such as mercantilist and liberalist views to prepare reports on international investments policy recommendations. I was trying to look at all the political agenda implications on policy-making processes so to consider rationale of all stakeholders and how they loose and benefit from political reforms. Normally I would do technical work as making spreadsheets but the class allowed to see bigger picture and see the vision behind smaller tasks. It added a lot of theory, concepts and intellectual thinking chains and models. It was good public speaking practice when you no need to worry you will say wrong because you are in a class so discuss and sharpen your tongue as much as you wish. It is not the critical as at workplace where you really need to think before you speak. Another activity on supply chain of parts for Ferrari car at classroom was helpful in strategizing our agenda on certain projects at the internship, such as creating different scenarios and adapting to them, and building predictive analysis. TWC workshops and activities, CE and policy dialogue all were amazingly supportive side complements perfectly adding flavor to internship and overall life in DC, and knowing what it takes to work and live in DC, in such highly political place in the world.

Reflecting back on my leadership skills, I highlighted 10 skills I developed this summer and

identified the percentage change I expect to happen in next 5 years.

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Examples: 1 – I was a leader of the project at my internship assigned by our supervisor. 2 - I strategized the planning of our projects completion. It implies me preparing the project management time schedule for all interns as HR resources and all projects dispersed among interns including myself. 3 - Unexpected situations as someone was getting more workload, I tried to relocate the tasks quickly so to submit the project on due date. 4 - Finding right resources was one of key components for our projects. I noticed this skill in most of my colleagues. It demonstrated a great teamwork when each of us was able to find something valuable for the common goal. 5 – Being a call. That was one of the most frustrating parts of the internship but each of us realized that it is what it is to get it done. We often get calls from supervisor late at night to finish, for example, memo in next 2-3 hours, or early in the morning around 5 am be ready with questions and comments for a conference call (plus each of us needs to take notes to upload on share drive and one person writes minutes) because it is an international call. Basically having no office space and working in such international settings really exposed all of us to feel the time constraints and to develop sense of emergency. There was some work done under stress and pressure because besides our assigned long-term projects we work on during the day we had other immediate ones on nights and weekends. 6 – Inspiring commitments example is when we all were working hard on July 4 long weekends. I remember I even missed fireworks. I remember discussing with other interns that how our life is miserable working on holidays through group Skype call. One of us was really frustrated to that fact but could not avoid his commitment due to group project when all of us far from each other and some of us have different commitments besides the internship. Thus, finding time to discuss group work was challenging, and, hence, getting their parts done on time so overall projects is complete was hard. In that situation I remember I tried to say nice words to cheer up and add some positive note to group discussions though there were some arguments of no need to work hard since it is unpaid internship. I guess that time I got my Empathy/South leader to emerge (City Year Compass) trying to glue falling apart pieces. 7 – Example of it is getting into details of business fast so to be an equal participant at the conference calls, fro example. There is tons of information out there on share drive to go over but picking the most relevant info was fast learner skill used.

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8 – Deciding on something and coming to compromise was important for one of largest projects because both of understood we need to decide the tentative structure of our tasks to accomplish an abstract assignment given to us. If we won’t decide fast on either structure, it will take forever to finish the core part. Plus, there were many avenues we could tackle the task but we made the decision and went with it, without lengthy debates on preparation stage. 9 – The example relates to example 6 “Inspiration” because at that most moment we made professional relationships as how to work in a team virtually who never saw each other in person. I gave only 57 % because we were not working in office and never met each other in person, so 57 % to our virtual interaction, mending on LinkedIn, Facebook, Skype, Google Drive and SkyDrive, and Twitter, and tons of emails. 10 – Staying sane would be an example. Besides jokes, time management such as tracking my calendar on my phone, laptop, on the wall, in notebook, using alarms, working out and meeting friends so as to balance social and professional lives, all were integral to composure I gave 57 %. Only half is because I really felt burnt out some days as no more me for running or catching up with friends. My strengths is getting higher in communications skills but my weaknesses prevail from communications training inflow meaning I am forgetting the basics such as math formulas, feeling lack of technical expertise, forgetting Excel functions, not growing technologically as doing budgeting and heavy math and analytics and data analysis. While I use all of it for work but intense psychological and social aspects cloud my mind. I am a strong believer that math is the only remedy to stay insane as it clears your mind and let you think better and more creatively. Sometimes I wonder why I even went this path of studying public administration instead of chemistry, physics or computer science. Thus, I try to self-learn and develop myself as data scientist so I can use heave math algorithms to predict future. I find speaking programming languages is much better than speaking 5 foreign languages. They are not exclusive and having both skills is ideal. My value is not clouding people’s minds through extensive talks but act and have sound facts to support your arguments. My interest is big data analysis and constant coding self-learning. Utilizing huge government data and making sense out of is an emerging trend that has a great potential to tackle on and to lead to open data and open world.

 

 

 

 

 

 

 

 

 

 

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INDIVIDUAL DEVELOPMENT PLAN June 28, 2013 Tuyana Chimitova Academic and Professional Goal: Learn at least 3 community development tools especially in regards to the indigenous groups, and how to apply/relate those tools to private equity investments. Action Step: Research indigenous communities Action Step: Research the community development tools Action Step: Discover how they affect each other Leadership Goal: Facilitate and lead the at least 2 projects during the following 5 weeks Action Step: Discover the leadership roles Action Step: Volunteer for leadership opportunities Action Step: Evaluate what I learnt and how to improve Civic Engagement Goal: Complete 5 weeks (1 hours weekly) of volunteering as a Young Leader with Girl Scouts of the Nation’s Capital at the public schools in DC Action Step: Get in touch with nonprofit, register, and complete paperwork, fingerprints Action Step: Attend seminars and briefings on Capital Hill on young women empowerment and fostering their interest in STEM education Action Step: Establish bonding relations with girls and be an exemplary leader for them to inspire them to get where they want and help with ways how    

 

                               

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Tuyana Chimitova, MPA Tuyana.chimitova@gmail.com Washington, DC (703) 626-8387

http://www.linkedin.com/in/chimitova KEY QUALIFICATIONS: • Developed and Implemented the Public Policy research and Quantitative/Qualitative Statistical

Data Analysis • Experienced in leading international projects, developing business plans and budgets, financial

forecasting • Certified programmer in SAS, SPSS, and STATA. Expert user of MS Excel, Word, Power Point

EDUCATION: THE WASHINGTON CENTER (TWC), Washington, DC, USA May 2013 – August 2013 Specialization: Business and Global Trade Coursework: International Business Case Studies (Professor Eugene Laney) Florida State Federal Relations Scholarship Recipient FLORIDA INTERNATIONAL UNIVERSITY, Miami, FL, USA September 2012 – August 2013 PhD Student, Public Administration GPA: 3.3/4.0 UNIVERSITY OF MISSOURI-COLUMBIA, HARRY S TRUMAN SCHOOL OF PUBLIC AFFAIRS Masters of Public Administration GPA: 3.5/4.0 May 2011 Coursework: Economics, Statistics, Project Management, Public Budgeting& Taxation, and Quantitative Analysis Recipient of a Two-Year Graduate Assistantship MONGOLIA INTERNATIONAL UNIVERSITY, Ulaanbaatar, Mongolia BA in International Business Management GPA: 3.4/4.0 May 2008 Coursework: Accounting I, Management Information Systems (MIS), Supply Chain Management, Global Trade, E-commerce Recipient of the Scholarship for Academic Excellence PAI CHAI UNIVERSITY, Taejeon, South Korea Spring 2007 International Management Exchange Program “Future Leaders” PROFESSIONAL EXPERIENCE: INTRUST GLOBAL INVESTMENTS LLC, Washington, DC May 2013- August 2013 The TWC Intern • Developed the proposal for IDB award nomination; analyzed renewable energy infrastructure projects;

analyzed Pemex energy reform FLORIDA INTERNATIONAL UNIVVERSITY, Miami, FL September 2012 – August 2013 Graduate Teaching Assistant, Department of Public Administration • Researched Tech/Energy/Trade Finance/Policy, Local & State Government Finance, Budgeting

& Accounting issues MIAMI-DADE COUNTY PARKS AND RECREATION DEPARTMENT, Miami, FL Executive Management Program Participant, Office of Finance January 2013-May 2013 • Designed the financial tool to build projections of the Capital Budget and its impact on Operating

Budget utilizing the assumptions developed by the OMB • Closely coordinated the project with the Capital Planning Division regarding the estimated

construction costs and various construction policies FIU METROPOLITAN CENTER, Miami, FL September 2012 – December 2012 Research Assistant • Compiled, organized and analyzed data; provided data/analysis inquiries for the US Census

requests REGIONAL ECONOMIC DEVELOPMENT, INC (REDI), Columbia, MO Summer 2011 Research Associate

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• Analyzed and examined Tax Increment Financing and Enhanced Enterprise Zones projects • Initiated and arranged communication with Russian science technology business incubators • Represented and negotiated the public interests and concerns at the meetings with private

corporations, assessed their proposals and relevance with public opinion and benefits for the community

MISSOURI DEPARTMENT OF CORRECTIONS, Jefferson City, MO Spring 2011 Research Consultant • Conducted qualitative analysis of Missouri’s Unemployment of Ex-Offenders Re-entry Messages

Campaign by utilizing semi-structured interviews with stakeholders, and undertaking a thorough document content analysis

ASIAN AFFAIRS CENTER, Columbia, MO August 2009 – May 2011 Program Coordinator • Managed international training and exchange programs • Recruited volunteers by consistently delivering goal-surpassing marketing results • Administered and managed fundraising and budgeting MONGOLROSTSVETMET LLC, Ulaanbaatar, Mongolia Spring 2008 International Trade Intern, Mining and Natural Resources LANGUAGES

• Russian (native), English (fluent), Korean (intermediate), Spanish (basic)

                                                       

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CIVIC ENGAGEMENT PROJECT REPORT

Facts about Young Leaders Program

The Girl Scout Council of the Nation’s Capital’s (GSCNC) Young Leaders Program (YLP), connects college students from local universities to lead Girl Scout troops for six weeks for girls between the ages 5-13 who live in low-income, challenged communities in the District of Columbia and in parts of Prince George’s County. The girls experience Girl Scouting traditions, while young leaders help them build courage, confidence and character, and make the world a better place. Leaders get the chance to experience empowerment, leadership opportunities and an opportunity to make a difference. The aim of the program is to transition a large percentage of sampler programs to long-term, traditional troops. While in YLP troops girls will experience the traditions of Girl Scouting as well as enjoy activities involving health, fitness, science, art, literacy, career exploration and culture. Our Young Leaders are highly motivated students, leaders in the community and mentors to girls in the District of Columbia and Prince George's County. Young Leaders are trained and given pre-planned curriculum to use during the six-week sampler sessions. Specific Duties • Meet with the girls weekly, to deliver quality Girl Scout programs. • Follow the provided curriculum for each troop meeting. • Help mentor and educate the parents and other identified adults who want to establish a

traditional troop. • Work closely with the Young Leaders Program Coordinator, Field Director, and administrative

volunteers to recruit girls and adults. • Remind girls and parents of meeting and troop activities each week. • Hold an end of session Investiture Ceremony that includes site administrators, parents, relatives,

and special friends of the girls.

Individual Development Plan (IDP) civic engagement goal was achieved except for I need to work more on establishing bonding relations and being exemplary leader to inspire them. The girls I volunteered with are very young so they often do not yet know where they want to be and who they want to be. Thus, it was very discipline-heavy control, and helping them to become interested in science through connecting activities to conversations. I chose the women empowerment because it is one of most vulnerable groups in the world. Women role in most countries is diminished considerably. Moreover, women interested in Science, Technology, Engineering, and Mathematics (STEM) should be fostered worldwide especially in the United States.

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Volunteering with the Girls Scouts (GS) was another leadership and responsible citizen practice. I was able to perform the bottom line work of the policy discussions on the Hill regarding the women empowerment in STEM education. We played some science games at our meetings with girls. I really saw the poor environment and resources of the public schools in poor areas of DC. One of the shocking things to find out was that none of the girls in middle school knew what and where is Russia. It was also striking to find out that none of the girls was interested in math, science or technology. Apparently 100 % of them said how they dislike and see no point in it. Most of them were talking about boys, artists, musicians, singers, stylists, etc. Most of us probably thought about such stuff when we were teenagers but having some degree of curiosity for how airplanes fly, or who makes internet, should be present among girls (as it is among boys) if we really aim to empower women in STEM. I happen to be on the Hill when the GS president was visiting DC from NY to discuss STEM incorporation into GS agenda, it was impressive to see how many people were openly discussing the ways to move in that direction.

I volunteered with other girl Amber and Mrs. Anne Chase. Both of them have an experience working with children. It was helpful to establish the discipline in the room of sixteen girls at first and second grade. We did so by insisting the girls raise their hands before speaking. The public school’s name is Thomas Elementary School in NE of DC nearby Minnesota Ave metro station. I

volunteered there from the middle of June until August 1, 2013 one and half hours once a week. I got really attached to them and it is nice to see them once a week. They are also happy being Girl Scouts especially they love cookies at the end meeting that they get for the good work they have done.

I contributed by playing some Russian games that I used to play myself when I was a kid. I found there are similar games in the United States just called differently. For example, hide and seek or Cat and Mouse. We also have done some activities on memorizing GS Law and Promise and sang songs.

I did not immerse myself into learning a lot about legislative process since I am not much interested in politics though politics is related to my

work. However, I learnt to communicate with children and be more resourceful for them. This experience helped me to become better global citizen.

       

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INFORMATIONAL INTERVIEW REFLECTION The Washington Center Interviewer: Tuyana Chimitova Interviewee: Mr. Marcelo Giugale Director Poverty Reduction and Economic Management Africa Region, The World Bank 1818 H St. NW Washington DC 20433 USA Tel: 202-473-7738 Fax: 202-473-8276 mguigale@worldbank.org

Short Biography:

Marcelo Giugale is the World Bank’s Director of Economic Policy and Poverty Reduction Programs for Africa. An international development leader, his twenty-five years of experience span the Middle East, Eastern Europe, Central Asia, Latin-America and Africa, where he led senior-level policy dialogue and over fifteen billion dollars in lending operations across the development spectrum. He has

published widely on economic policy, finance, development economics, business, agriculture and applied econometrics. Notably, he was the chief editor of collections of policy notes published for the presidential transitions in Mexico (2000), Colombia (2002), Ecuador (2003), Bolivia (2006) and Peru (2006). His opinion editorials are published in the leading newspapers and blog-sites of Latin-America and the USA. He received decorations from the governments of Bolivia and Peru, and taught at the American University in Cairo, The London School of Economics, and the Universidad Católica Argentina. A citizen of Argentina and Italy, he holds a PhD and a MSc in Economics from The London School of Economics, and a Suma-Cum-Laude BA in Economics from Universidad Católica Argentina.

I decided to interview him because I am fascinated with the work he is doing on the poverty

eradication and economic development in poor regions of the world. This is what I ideally would love to work on if I was put in this position. The interview has helped to narrow down my interests in terms of deciding what career I would like to pursue.

During the interview I was trying to understand his approach and theoretical framework of the actions he took towards poverty reduction. I asked what methods were most effective and what were the reasons of success and failures. I received very in-depth description of the whole economic model he used to analyze the performance of his team in Africa undertakings.

The particular surprising moment about his career is the fact that he did not know anything about the World Bank and regions he was sent to work at the beginning of his career with the WB.

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Moreover, my own observation is that back then there was different time and hiring processes seem were different than today. However, the connections are still key to get a position at the WB. Therefore, my own conclusion is that it is 99 % luck to get hired at the WB and 1 % skills. There are many people with the somewhat same skills set but it depends a lot on simple luck and determination.

The most interesting aspect I learnt was the concept of OCEAN that he mentioned and that stands for Openness, Consciousness, Extroversion, Agreeableness, and Neuroticism. This is the part of New Era of Governance with its 7 fundamental technological changes such as New State through Google, Democracy through devices, Standards, Extractives, de-monopolization of fiscal monitoring, better data and the advent of impact analysis, and cultural change. All of these are interesting topics itself to discuss deeply.

His ability to serve as a leader seem to be tremendous considering how many people follow him in social media and how many interesting discussions can be seen at his blog. He is very attentive to what others say and really tries to understand. It makes you feel important considering the professional and age gap between us.

The interview with Mr. Giugale allowed me to stay focused and determined at pursuing my career aspirations. All I learnt during the interview supports my IDP. I learnt some economic approaches for community development. I learnt his perspectives on private equity partnerships with indigenous people. I received good feedback on my leadership initiatives that I shared with him.

The interview definitely confirmed my career aspirations since I do see the practical application of my skills set such as data analysis and technological advances for the sake of the poverty reduction. Therefore I am inspired to learn more about big data analytics to design better and conscious public policies driven by accurate data predictions and sound judgment.

In terms of preparing for the interview, I went over his achievements and biography so to form the questions on subjects of my interests and relate them to his background, as well as questions on how and why he has done work on certain projects, and what were the obstacles. I also went over the news, his blog at the Huffington Post, and followed him on Twitter, and added him to my LinkedIn network. Next time, I weigh whether to add a funny story with lesson in it, some proverbs and quotes to sound smarter, and jokes to bring in some humor and to light up the conversation. Though we laughed and smiled at some points, I think it is never bad to have a few jokes in your mind.

In conclusion, I can say I felt good about myself since I was able to speak on equal about the issues both of us concerned about, and being able to understand his professional language well. I have done it before; hence, I confirmed what I already knew. Thus, I just had more practice: it is like in sports where your success comes from daily training and exercises. It was a good exercise overall that I felt I am excelling in. Go Panthers! ;)

             

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WORK SAMPLES FROM THE INTERNSHIP InTrust Global Investments, LLC

Supervisor: Mr. Francisco Acuna, CEO

1. JK Award Proposal: • completed by Tuyana Chimitova

• The Juscelino Kubitschek Award was created to recognize institutions and organizations that help reduce poverty and promote equality. We invite you to nominate sustainable projects with proven impact in the region in any of 2 categories: "Economy and Finance" and "Social, Cultural and Scientific". Each category will be recognized with US$100,000.

• First, I explained the reason to nominate InTrust Global for JK Award, what contribution it brings to society and how we are different from other nominated institutions;

• Next, I put together the InTrust Global information such as its mission, vision and goals, as well as its achievements towards those goals;

• Finally, I presented all the projects, their status, specifics, nature, targets, financials such as Return on Investment (ROI), social and economic impacts, their innovativeness and replication of InTrust activities around the world.

• Skills I employed to produce it: Extensive research, analysis of the all information about the InTrust, and its position with the competitors, financial ratios to diagnose the organization’ fiscal health and to project its future financials (future value, ROI).

• Progress towards my goals in IDP: 80% because I got familiar with InTrust better as it was first project. I learnt about existing regional development organizations, researched past winners, and got familiar with their unique business models that allowed them to win. This allowed learning variety of economic and social development tools and their rationale and logistics of raised funds.

2. Report on Advising Mexican Left Party on Energy Reform in Mexico: • completed by Tuyana Chimitova and Chuan Lin • Conducted qualitative analysis comparing energy policies in countries that undergone big

restructuring in terms of privatization and succeeded; next, we analyzed the three major political parties and their proposals especially left party who is absolutely against any type of privatization;

• Conducted quantitative analysis; built the statistical model to find the impact of economic indictors on energy demand; using formula we built, we predicted future energy demand to find the gap between today and future and how realistic it will be to stay public (Pemex monopoly);

• The goal was to analyze the rationale behind keeping Pemex public; • Skills I employed: STATA programming, Excel projections, critical & analytical reasoning &

thinking; • Progress towards my goals in IDP: 100 % because I learnt to apply all theoretical and analytical

tools from classroom to practical world. •

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JK AWARD NOMINATION PROPOSAL Economics and Finance Category (EFC)

Executive Summary

According to several indigenous organizations, the main problems suffered by indigenous peoples in Mexico are linked to land and territories, natural resources, administration of justice, internal displacement, bilingual education, language, migration and constitutional reforms. The InTrust Global investment funds are focused on equity investments. The one of the main focuses is partnering with indigenous people In Latin America and the Caribbean for wealth creation. The main methods are to develop renewable energy resources through profitable project investments, capitalizing on untapped opportunities and capital market gaps, delivering a triple bottom line, benefiting from strong regional, agricultural, and energy growth. The business model is based on trust optimized for regional and industry success. It positions the fund to access and benefit from key regional opportunities. It also enables the fund to tap into a unique and particularly interesting deal flow not available to other investors such as opportunities for better-than-market deals with governments, co-investors, developers, and others. These offers better financial prospects for long-term commercial profits and success through its economically, socially, and environmentally sustainable model. It reduces political, social, environmental, operational, and commercial risk. The seasoned team is with a broad experience in renewable energy and natural resource investing, development, government relations, structuring, financing, governance, business building, legal and regulatory, and exits in Mexico and Latin America. The Inter-American Development Bank (IDB) proposed and sponsored the fund for an investment from the Global Environmental Facility (GEF). The GEF has committed to provide initial funding of US$5MM. This amount will be matched (up to 10% of the total fund) by IDB’s Multilateral Investment Fund (MIF). The InTrust has been awarded the IDB’s Beyond Banking Award for Best Socially Responsible Investment Initiative.

Statement of Need The number of people benefitting from the InTrust activities is estimated to be 15 % of

Mexican population who comprises the group of indigenous people1. The most of the InTrust projects are aimed toward Southern Mexico with more remote access to the developments. In the southern state of Oaxaca alone, 56% of people consider themselves indigenous, divided in around 16 ethnic and linguistic groups, in addition to a small population of African descent. They are also more likely to live in poverty than non-indigenous. During his recent visit to Mexico, Olivier De Schutter, the UN Special Rapporteur on Right to Food, warned that 19.5 million Mexicans, approximately 18

                                                                                                               1 UN Human Rights, 7 July 2011.

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% of the population, are food insecure, an overwhelming majority of them in the rural areas, with a disproportionate number of indigenous peoples among them2

Sustained economic growth in Latin America stimulated an exponential increase in energy

demand in the region. According to a study titled “Meeting the Electricity Supply/Demand Balance in Latin America and Caribbean” by Rigoberto Ariel Yepez-García, Todd M. Johnson, and Luis Alberto Andrés of the World Bank, if the region’s economy continues to grow at 3% rate per year, “its demand for electricity would more than double by 2030, reaching about 2,500 Terawatt-hours (TWh), up from 1,150 TWh in 2008. It is therefore crucial for this region to increase its energy security in an economic and sustainable manner by diversifying the sources of electric power.” It requires $430B investment in new generating capacity. The nascent emissions trading schemes and the emphasis on low emissions development are creating demand for renewable energy projects.

The world population will grow to 9 billion in the next 50 years with the emerging markets likely to continue driving growth. The OECD expects world farm commodity prices to continue edging higher in the next decade, and oilseeds to outperform wheat and other cereals. The both trends fueled by the demand in emerging economies3. Agricultural commodities should outperform equities in a global slowdown because the demand for food is inelastic compared to the purchasing of industrial and consumer goods. The agricultural markets and investments thus offer a unique hedge and counter balance against volatile and high-risk equity markets. The growth will create tradeoffs and opportunities at nexus of land use, agriculture and energy.

I

                                                                                                               2 UN Human Rights, 7 July 2011. http://www.ohchr.org/en/NewsEvents/Pages//IndigenousPeoplesRightsInMexico.aspx    3 OECD/FAO, Agricultural Outlook 2012-2021, July 16, 2012

Agricultural  Growth  =  Rural  Growth  =  Energy  Demand  =  INDI  

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All the major markets in Latin America have introduced or updated different variations of regulatory and fiscal incentives to stimulate renewable energy, climate change mitigation, and clean technology investment to foster the penetration rates of renewable energy and increase the energy efficiency of their domestic energy mixes. Various types of governmental incentives are used in the region to encourage the use of renewable energy, including feed-in tariffs, quotas, competitive bidding, green energy tradable certificates, and others.  

Organization  Information    

There four major services provided by the InTrust Global Investments LLC: Financial Advisory services, Public-Private Partnerships, Public Policy Group, and Climate Change Practice. The InTrust Global Investments LLC is working to become the premier financing firm for the development of technologies and practices related to alternative energy and climate change. Its alliances with the top alternative energy developers and venture capital companies demonstrate their interest in navigating climate change and preserving the environment.

Their professionals are experts in brokering mutually beneficial deals between governments, businesses, and community members around the world. They work closely with investors and governments to encourage the development of economic partnerships and successful relationships. Their strength lies in their public policy experience: focusing to bring to the table a level of social, financial, and cultural consciousness that forge long term relationships.

The main audiences served by the InTrust Global Investmetnts LLC are indigenous people of Latin-American countries. The largest project devoted to indigenous community development is called the INDI Fund. Besides that, the InTrust Global Investments LLC members have worked in numerous projects in the industries of financial services, energy, and infrastructure development. Some of these projects include:

 

• Advised the development of water treatment plants in Central America • Advised a large remittances company on its expansion to Latin America

  18  

• Advised several countries in Latin America in the strategic promotion of their interests to several multilateral institutions

• Advised sub-national governments (States) in Latin America on the development of Infrastructure Funds

• Developed the framework for a Private Equity Fund to invest on large infrastructure projects with Indigenous tribes in Latin America

• Advised hydro-electric plants in Central America • Secured OPIC finance guarantees to Latin American companies • Represented a large City of the U.S. on its economic and financial alliances with Latin

America • Advised on several sale-leasebacks transactions which include Walmart, Safeway, 7/11

Stores, Circle K, City Garage Automotive, Quick Trip, Sam’s Club and K-Mart; in Mexico, Wood Group Power Solutions, Cifra Stores, Gigante Stores and Comercial Mexicana, Presidente Intercontinetal, CFE and PEMEX.

 

   Projects Description

They specialize in securing financing for a wide spectrum of projects in both public and private development. They leverage their alliances with banks and private investment companies as well as their market expertise to help clients secure funding and put it to use effectively so as to maximize the reward on their investment.

InTrust Global Investments LLC is committed to pursuing the types of projects that enable underdeveloped communities of high potential actualize their latent capabilities and resources. They recognize the need to provide a stimulus to the developmental efforts of neglected communities by removing the financial barriers to infrastructure construction as well as providing strategic solutions to local governments of emerging countries in executing expansive public investment and economic development projects.

In creating and maximizing value through “equity sharing,” local communities receive an equity stake in projects in exchange for the contribution of their land, raw material supplies, or natural resources. Traditional Indigenous community models often have failed because of conflict with the Indigenous communities on whose land investments were sited, and a general failure to follow a true partnership-based approach.

  19  

Since the Fund’s business model emphasizes creation and maximization of value through equity sharing, it provides an incentive for both the investor and local communities to collaborate to achieve the development, operation, and successful completion of the Fund’s projects. The Fund’s collaborative approach brings important governmental support as a platform to achieve political goals in regard to national development, and is expected to lead to investment opportunities unavailable to others.

The economic impact is the creation of jobs for indigenous population in rural Mexico. The green market is a growing industry that is especially effective if it is built from the scratch. For example, Greensburg city in Kansas State was completely destroyed after the tornado. However, it was able to rebuild its buildings and other infrastructure facilities in more sustainable green way that brought significant financial savings to city budget as well as spurred the business activities attracted to the area.

   

The financial impact were the foreign investments into various clean energy projects with attractive ROI (return on investments). SROI determines the full value of a project by assigning monetary values to all costs and benefits: economic, social, and environmental. The process provides decision support by prioritizing sustainable initiative benefits. SROI helps communicate the full value of a sustainable initiative, including direct, indirect/non-cash costs and benefits, as well as the values of externalities that are generally overlooked in economic assessment and not revealed to stakeholders.

  20  

The outstanding social element as a result of this activity is providing the platform for the human development projects for indigenous people within rural areas.

The innovativeness of the projects is in its new financial modeling approach serving indigenous people based on the trust. The green market is also growing cluster that attracts new innovative solutions and ideas including technological applications, and other supporting products and services supply. The green technologies will create the demand. Moreover, the INDI Fund, one of the projects of the InTrust Global, will enable Mexico to be the leader of the active citizen engagement in climate finance.

Regarding the replication of InTrust Global activities, they are performed by most of the community development financial institutions around the world. The similar private equity investments can be attracted to potential emerging countries in Latin America, South East Asia, and Africa. Also it can be implemented with other indigenous people comprising a considerable population in total in the emerging and developing countries.      

  Conclusion

The strategy implies additional costs when compared to a traditional investment projects, but over time is expected to reduce overall costs. The resulting enabling environment for the project will minimize the risk of social conflicts, delays and resulting costs. A project that places the enterprises involved at the forefront of corporate social responsibility and inclusive business development should earn substantial incremental market value. The sharing by local communities in the returns of investment will contribute to local economic development and access to energy, improve income and living conditions of the local communities involved on a long-term basis, and enhance sustainability of the project itself.          

  21  

   

GRIP  MEXICO’S  ENERGY  FUTURE:  STANCE  AND  STRATEGY  

  22  

PART I: OVERVIEW

With significant natural endowments in hydrocarbon resource and a reputable energy

industry outlook, Mexico is also acknowledged by the world as having the soundest state-owned

structure for energy companies. However, in the recent decade, the rising arguments of “energy

reform” have pushed Mexico and its policy makers to a critical point of making decision.

For the ardent reform supporters, they’ve examined the current global energy market as a

different setting than ever before that calls for private and foreign counterparties’ involvement in

domestic energy industries. Based on the major consideration of capital, technology and

management, they call for more flexible shareholding policies in energy companies.

In the meanwhile, the nationalization supporters defend the state-owned energy enterprises

as an inviolable historical legacy. They consider the creation of Pemex and keeping it 100% state-

owned as a greatest decision, which secures the national oil reserves from manipulating by foreign

forces, contributing significantly to the domestic fiscal resources and facilitating Mexico with

gripping the pricing power in the global energy market. Besides, the nationalization could shelter

Mexico from the exploitation from foreign countries, and it would provide an umbrella to proof

uneven trade under the guise of Neoliberalism and halt the country from slipping towards another

“lost decade”.

Is Mexico energy industry really experiencing a capital shortage and could not develop

without foreign or private capital? What would other countries do if in similar contexts? What is the

alternative option besides nationalization and privatization? In this article, we are going to tackle

those problems firstly through quantitative analysis and projections, and then we will examine

through comparable country case studies, aiming at providing the rational analysis and constructive

suggestions.

PART II: QUANTITATIVE ANALYSIS

In order to testify whether the “capital shortage” really exists, and to explore how to keep

competitiveness in current global energy context, we designed two quantitative analysis models.

The logic of the first one is to project the domestic energy demand in the next 10 years,

deriving a possible energy gap that Mexico is going to confront with, and then decide whether

government could tackle the gap without more private or foreign capital involvement from a pure

financing perspective. The first model is aiming at providing objective and quantitative proofs to

eliminate the argument of “capital shortage”.

The second model is designed to define the socio-economic factors’ impact on Mexico’

energy market competitiveness index. This model is designed to demonstrate how Mexico can stay

competitive in today’s global energy market.

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2.1. The Energy Demand Model

The units of analysis are 50 upper-middle income countries listed by OECD, which are the

countries having the similar developing status with Mexico. We selected the Energy Demand as

dependent variable, and Fixed Capital Formation, Industrial Production, Population and GDP as

independent variable. The structure of the model is:

Energy Demand= α+ βFixed Capital Formation+βIndustrial Production +βPopulation+β GDP+ e

Table 2.1 Variable Description

Variable4 Definition Unit

Energy Demand

(Y)

We define the Energy Demand as it equals to the summation of

Net Energy Generation and Net Energy Import. Its scope

includes the energy demand from all the sectors: industry,

transportation, agriculture and other residential, commercial, and

public services.

The variable here is designed to evaluate the total amount of

energy that is needed to maintain the normal status of domestic

economy.

Kilowatt-

hours

X1:

Fixed Capital

Formation

The scope of Fixed Capital Formation includes “ land

improvements (fences, ditches, drains, and so on); plant,

machinery, and equipment purchases; and the construction of

roads, railways, and the like, including schools, offices, hospitals,

private residential dwellings, and commercial and industrial

buildings.

The reason that we include the Fixed Capital Formation here as

a variable is because the fixed capital sector is energy starved

industry, which will impact energy demand significantly.

U.S. Dollar

X2:

Industrial

Production

The scope of Industrial Production includes “the output from

the manufacturing, mining, electric and gas industries.”

U.S. Dollar

X3:

Population

We include Population here as the majority of energy demand

comes from the residence.

People

X4:

GDP

Gross Domestic Product U.S. Dollar

                                                                                                               4 Source: The World Bank, EIA

  24  

We use the historical data from 2007-2011 for the 50 countries. The multiple regression

result for the panel dataset is as below:

Y (Energy Demand) = (4.28e+10)+.051*X1 (Fixed Capital Formation)+3.173*X2(Industrial

Production)+9905*X3(Population)+.298*X4(GDP)+e

2.2 Forecast the Energy Demand and Capital Gap in 2020

The forecast for Mexico’s national energy demand in 2020 is based on the four variables

proposed in part one, covering the consideration of economic outlook, energy-starved industries

capacity and demographic dimensions. Besides these four major elements, it is understandable that

some unexpected interventions from other aspects would also post their influences over the future

demand outlook, such as newly developed technology or changing climate. But we decide to place

our major consideration to the ‘possible normal growth’ for a country, without any exogenous

interventions.

The first step of forecasting the energy demand in 2020 is to extract the growth rate for each

variable from Mexico’s historical performance. We use the last 10 years’ historical figures (2003-

2012)5 to derive the average growth rates, and then project to the future with compounding effect.

The tables of average growth and 2020 projection are as below:

Table 2.2.1 Average Growth Rate Table

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Aver

age

GDP 1.4% 4.1% 3.2% 5.2% 3.3% 1.2% -6.0% 5.3% 3.9% 3.9% 2.6%

Fix Capital

Formation (%) 0.0 12.8 13.4 17.2 10.1 10.5 22.3 13.7 13.8 3.2 6.6

Population 1.2% 1.2% 1.2% 1.2% 1.3% 1.3% 1.3% 1.2% 1.2% 1.2% 1.2%

Industrial

Production (%) 0.0 3.5 3.0 5.8 2.1 0.3 -7.7 6.2 4.1 3.3 2.0

Table 2.2.2 Projection of 2020 (Unit: US Dollar, Person)

Fixed Capital GDP Population Industrial Production

2011 243394527868 1153343069401 114793341 303000000000

Projected to 2020 494327537366 1483594304045 129720635 1845484131368

Following the energy demand model we created (Energy Demand= α+ βFixed Capital

Formation+βIndustrial Production +βPopulation+β GDP+ e), the energy demand in the year of 2020

should be 6,767 Kilowatt-hours by plugging in the projected values respectively. Compared to the

                                                                                                               5 Source: The World Bank

  25  

Net Generation figures in the year of 2011, which is 2,579 kilowatt-hours, an energy gap up to 4,188

kilowatt-hours is in urgent need to be fulfilled, in compliance with the economic and country capacity

growth.

Table 2.2.3 Energy Demand Gap at 2020 (Unit: Billion Kilowatt-hours)

2020 Forecast 6,767

2011 Net Energy Generation 2,579

Energy Gap 4,188

Constructing new energy plants, building new capacities and enlarging energy sector

investment should fill in this energy gap. In order to quantify the volume of investment in need, we

incorporate the unit cost for generating energy, which is a levelized cost that includes all the possible

cost over the whole generation process: initial investment, operations and maintenance, cost of fuel,

cost of capital. The unit cost figure comes from the EIA projections for U.S. Levelized Cost for

plants entering service in 2018 break into energy source( see appendix Table a). There is one thing to

note, although the EIA projections are aiming at the U.S. and the estimated time is the year of 2018,

we still take this set of figures into our calculation. We believe any deviation possibly incurred due to

the different countries and two years’ time advance would be acceptable.

Additionally, we allocate the weights for alternative and conventional energy in the total

4,188 kilowatt hours’ energy gap. The proportion of alternative versus conventional energy is 35%:

65%. According to the National Energy Strategy for 2013-2027 issued by National Energy Council of

Mexico, 35% of electricity generation should come from renewable sources by 2024.

The investment needed to fulfill the energy gap is then estimated as 477 billion, as the table

presents below.

Table 2.2.4 New Investments Needed Estimate at 2020

Conventional Resources Average Unit Cost 102450000 $/Billion Kilowatt-hour

Projected Conventional Demand 2722 Billion Kilowatt-hour

Alternative Energy Average Cost 135311111 $/Billion Kilowatt-hour

Projected Alternative Energy Demand 1466 Billion Kilowatt-hour

Total Investments Needed 477 Billion, US Dollar

That is to say, from a pure capital perspective, assuming all the new entering power plants

are state-held and fully funded by government, the government needs to prepare 477 billion dollars

in the next ten years in response of the possible growing energy demand.

However, the existing of this 477 billion capital cap does not mean a doomed capital

shortage, and it does not suggest or justify a completed privatization at all. The gap can be filled up

by the government gradually and smoothly along with the organic growth of the economy and

  26  

Mexico’s fiscal revenue. In the year of 2012, the recorded Mexico’s government revenue is 287

billion dollars6. And the total investment that energy gap calls for is not much higher than the 316

billion dollars domestic infrastructures construction package, which is a part of “six year plan”

unveiled recently. But in this case, for the government and policy makers, exploring ways to take off

some of its fiscal burdens should also be encouraged.

2.3. The Energy Competitiveness Index (ECI) Model

The second model is comprised of the countries identified by KPMG in 2012 to build the

Global Energy Competitiveness Index. It is a survey jointly conducted by Institute Choiseul and

KPMG. It is the first of its kind. It ranks 146 countries, grouping them into 5 categories ranging

from the best performers to underperformers. The data was gathered from several international

databases (including those of the World Bank, the International Energy Agency, the OECD and the

BP Statistical Outlook). The first edition of this annual study ranks the countries surveyed not only

by continent but also according to the quality of their energy mix, electricity access and availability

levels and the compatibility of their energy policies with environmental challenges (Figure 2.3.1).

Figure 2.3.1. Energy Competitiveness Index Indicators Grouped by Categories

Thus, the objective is to measure the competitiveness and performance of governments’ energy

policies. Each country was given a score from 0 to 100. The highest scores correspond to the best

performers in the area of energy. Ideally, a competitive country in the area of energy is (introduced

by the KPMG):

■ A country with low energy deficits and limited energy wastage, where the share of renewables in

electricity generation is significant or growing and where dependence on oil is relatively low;

■ A country where the vast majority of the population has easy access to electricity, where losses due

to electric power transmission and distribution, considered in relation to electricity generation,

                                                                                                               6 "Economy Watch - Follow The Money." Mexico General Government Revenue (National Currency) Data, General Government Revenue (National Currency) Mexico. N.p., n.d. Web. 31 July 2013.

  27  

are limited and where nuclear energy production helps safeguard the country’s energy supply;

■ A country where the share of primary energy used to generate a unit of output is low and CO2

emissions per capita are limited;

■ A country where the investment climate is positively perceived by investors;

■ A country where the energy mix is balanced, thereby ensuring the accessibility and availability of

electricity while limiting the impact of government policies on the environment.

Generally speaking, the Nordic countries whose energy industry is mostly semi-public are

among the best performers: Norway, Canada, Iceland, Denmark, Sweden and Finland rank, in this

order, in the global Top 10. Surprisingly, Colombia stood out as the fifth most competitive country

in terms of energy. Its outstanding performance is due to a strong energy mix (ranked 2nd worldwide)

and an energy strategy compatible with today’s key environmental challenges. A lower level of

industrialization limits negative effects on the environment and no doubt helps explain the rankings.

Our findings result in the model below:

Y (ECI)= 47.27 + .02*Fixed Capital Formation + .005* GDP - .02 * Population - .03*Industrial Production

+ e

In the model above, all independent variables are significant. The Fixed Capital Formation and GDP

have the positive impact on the ECI while Population and Industrial Production have negative

impact because the industrialization and increased population are normally bad for the environment.

Hypothetically our findings satisfy our assumptions.

If we compare G20 countries, Mexico with its score of 46.7 out of 100 is among average

performers and above the world average. We look at G20 countries because they represent almost7:

90% of global GDP; 80% of international global-trade; 2/3 of the world's population lives in G20

member countries; 84% of all fossil fuel emissions are produced by G20 countries. “Mexico is stuck

in the same place on the Index of Competitiveness for more than a decade because it has not created

the conditions whereby the economy might takeoff. And petroleum is a key part of the map that is

taking Mexico nowhere.” 8 Considering the average economic growth rate and our model along with

using the same old technologies and current policies, Mexico’s rank in Energy Competitiveness (ECI)

actually is projected to fall within the next 10 years due to growing energy demand resulting in the

expanding industrialization and the population.

PART III: COMPARATIVE QUALITATIVE ANALYSIS

                                                                                                               7 G20.org. Retrieved on July 15, 2013 8 Mexican Institute for Competitiveness  

  28  

Mexico faces new dilemma. In terms of energy production, the recent Pemex’s two deepwater

finds in the Gulf of Mexico totaling 325 million barrels will result only in 15 % increase in daily oil

production only after 1o years, which bring it back to 2009 levels. In terms of consumption, because

of increasing demand and energy consumption, Mexico, an oil exporting country, faces becoming a

net oil importer within 10 years, based on projections.

As we mentioned in the beginning, technology, capital and management are the major three

issues that stir the domestic heated debate. In order to tackle these three problems and find the

appropriate path to increase Mexico oil production in the decades to come, we are going to (1)

Observe the historical traces of energy enterprises in Norway, Russia and Brazil, drawing lessons of

how to better develop Pemex; (2) Explain our stance as supporting PRD and insisting on absolute

state ownership; (3) Propose our suggestions on some certain issues as alternative solutions and

potential new action plan.

3.1 Norway Case

Norway, the largest holder of natural gas and oil reserves in Europe, provides much of the

oil and gas consumed on the continent. In fact, Norway was the second largest exporter of natural

gas in the world after Russia, and the seventh largest exporter of oil. In 2010, crude oil, natural gas,

and pipeline transport services accounted for almost 50 percent of Norway's exports revenues, 21

percent of GDP, and 26 percent of government revenues according to the Norwegian Petroleum

Directorate (NPD). Although Norway's oil production peaked in 2001 at 3.4 million barrels per day

(bbl/d) and declined to 2.0 million bbl/d in 2011 as it is happening in Mexico today, natural gas

production has been steadily increasing since 1993, reaching 3.6 trillion cubic feet (Tcf) in 2011.

Hydropower is the principal source of Norway's electricity supply at 95 percent, while only 4 percent

comes from conventional thermal sources, followed by 1 percent from other renewables, namely

biomass and waste and wind.

Ministry of Petroleum and Energy (MPE) is responsible for overseeing the country's petroleum

resources. The Norwegian Petroleum Directorate (NPD) works under MPE as manager and advisor.

The merger of Statoil and Norsk Hydro created Statoil ASA in October 2007. It is an international

energy company that is 67-percent-owned by the Norwegian government and is the largest operator in

Norway, controlling 80 percent of Norway's oil and gas production. It also has interests in more than 30 other

countries. State-owned Petoro manages the commercial aspects of the government's financial interests in

petroleum operations and associated activities. It acts as the licensee for production licenses and

companies.

International oil majors have a sizable presence in Norway. The Norwegian government's subsidy

of oil and gas exploration, introduced in 2005, refunds 78 percent of the exploration costs to the companies. In

addition, taxes from onshore oil activities and from liquefied natural gas (LNG) shipped overseas were reduced, which

  29  

has attracted additional international investment. The Norwegian government is focused on increasing

recovery in producing fields, further exploring producing areas, opening new areas to exploration, as

well as developing new subsea technology, in which Norway is a global leader.

3.2 Russia Case

Prior to 1991, Russia’s oil and gas industries were directed by the Ministry of Oil and

Gas. However, different aspects to the industry were controlled by different government

entities. Drilling, refining, exporting, pipelines, and petrochemicals were all managed horizontally by

different directors, agencies, and individuals all working towards different goals. Vagit Alekperov

returned from working in the West and through Lukoil led the vertical integration of the Russian oil

industry.

The natural gas industry, typified by Gazprom, addressed Russian nationalistic concerns over

the industry by supplying each citizen with a voucher that could only be redeemed for a share in the

company. Private citizens’ shareholdings were limited to 33% of total ownership. 15% of the shares

also went to Gazprom employees. Only 1% went to foreigners. State ownership eventually fell to

38% as other categories changed. While this did not provide a huge cash inflow as a normal market

capitalization would do, it kept the shares in domestic hands and encouraged greater private

investment through private equity ownership of the company. More constituents had an incentive to

see their investment grow.

The oil industry, typified by Yukos, privatized through a low-interest “loans for shares”

program, meaning that the cash-strapped Russian government was loaned money from oligarchic

businessmen in exchange for shares of the company. Slowly, the company achieved more private

ownership, and the government received more cash.

Russia also needed to deal with more exploration and drilling of unconventional wells,

particularly in the Artic seabed and deep in Siberia. It needed foreign expertise for these

projects. However, many of the foreign companies (BP, Shell, Exxon) complained of ever-changing

regulations, taxes, and surprise permitting fees. As a result, after a few exploratory investments

(roughly US $500 million in size), many of these companies left complaining of sinking money into

the ground and getting nothing.

One exception was the 50/50 ownership agreement between TNK and BP, which has seen

challenges but has been preserved as the largest amount of foreign direct investment ever in

Russia. Gazprom slowly established credibility in the western capital markets with an offering of one

percent of its equity to foreigners in October 1996 in the form of Global Depository Receipts and a

successful large bond issue of US$2.5 billion in 1997. However, after all the privatization reforms and

selling out its stocks to private companies, there were a series of notable acquisitions resulting in

bringing back the control of oil and gas industry by the Russian government. Moreover, the exclusive

  30  

rights to export were given only to Gazprom limiting all other competitors to domestic production.

3.3 Brazil Case

Despite of being nearly half privately owned, the majority of shares belong to the Brazilian

government, which gives it control of the company's finances and operations. The recent growth of

the company is explained by political stability. Since 1997 the Brazilian oil market was opened to foreign

investments, but Petrobras continues to be the largest oil company in the country, enjoying a near

monopoly.

After 40 years of exploration, production, refining and transportation of Brazil's oil,

Petrobras started to compete with other foreign and domestic companies in 1997 when the government

approved Law N.9.478. This law broke Petrobras's monopoly and allowed for competitors to

develop Brazil's oilfields. The Brazilian government also created the National Petroleum Agency

(Agência Nacional do Petróleo, ANP), responsible for the regulation and supervision of activities in

the petroleum industry, and the National Council of Energy Policies, a public agency responsible for the

development of public energy policy. That same year, Petrobras reached the mark of producing 1

million barrels (160,000 m3) per day. The company also executed agreements with other Latin American

governments and began operations outside of Brazilian domains.

PART IV. LESSONS LEARNED

Mexico can adopt some aspects of these models. Considering Norway and Brazil, Pemex can

expand operations overseas, and form partnerships with other governments. Strengthening the

regulatory agencies is helpful in stimulating the Research and Development institutes for science and

energy policy innovations, and other legal concerns so to increase the transparency while

reducing/reforming corruption. Broader cluster generation should naturally create the less favorable

environment for corruption.

Even though Exxon, BP, and Shell, as international petroleum companies, all had vastly

more experience with different technologies, geographies, markets, and management, Russia made it

difficult to have them work within Russia for nationalistic concerns. Russia realized that it could

purchase some elements from them on the world market just as easily (or, in some cases, more easily)

than if it was forced to partner with them. Mexico could also find a way to purchase know-how on the

world market with respect to industry efficiencies.

With respect to hydraulic fracturing in Mexico, however, much of the technology still only

exists in the US, and attracting US know-how will be key for unlocking those untapped

resources. Mexico should learn from the Russian experience and realize that stability and clarity in

regulations, taxes, and permitting would be essential as it unpacks its unconventional resources.

  31  

PART V. ARGUMENTS IN SUPPORT OF PRD

Our stance is supporting PRD’s energy reform proposal, which insists on total national

control and full state ownership. Because we evaluate Mexico energy industry as having its unique

history factor and it is also given a national legacy meaning. In its particular context, any transition of

Pemex ownership would stir unforeseeable disturbance, including the protest from the most Mexico

citizens, the hostile takeover plans from foreign energy companies and rising private monopoly in the

energy industry. Besides keeping the stability of Mexico politics and the development of society,

there are also several important reasons why Pemex should keep its state-owned nature, rather than

introducing more private or foreign equities.

5.1 Credit Ratings

The state-ownership equips Pemex with para-national credit ratings, which is an important

attractiveness for Pemex debt investors. If Pemex abandons or changes its government background,

the credit rating could possibly go down, as least for a considerable period of time.

According to Ficth Ratings, Pemex's ratings reflect “its close linkage to the government of

Mexico and the company's fiscal importance to the sovereign”. We can also observe that Pemex

currently does have the same rating as Mexico sovereign.

Table 5.1.1 Credit Rating Comparison

S&P Moody Fitch

Mexico Pemex Mexico Pemex Mexico Pemex

Foreign Long

Term BBB BBB Baa1 Baa1 BBB+ BBB+

Local Long Term A- A- Baa1 Baa1 A- A-

Capital problem has always been raised up by PAN and PRI or other parties as an argument

against keeping completed state owned status. They think introducing private or foreign equity would

provide more capital available for Pemex. But they have neglected the fact that if the linkage being

broke up, Pemex may not be as attractive as before in the bond or loan market any more, which will

also bring up serious capital problem.

So far, Pemex’s leverage has been maintained at 50% , which is a moderately large level,

suggesting there would be financial pressures if the credit ratings go down and Pemex would lose its

natural advantages in either foreign or local bond and loan market.

Table 5.1.2 Pemex Balance Sheet and Leverage Ratio

  32  

Balance Sheet Ps. Billion

2007 2008 2009 2010 2011

Total assets 1330.3 1236.8 1332 1395.2 1533.3

Cash and cash equivalents 171 114.2 159.8 133.6 117.1

Total debt3 500.9 586.7 631.9 664.7 782.8

Net debt4 329.9 472.5 472.1 531.1 665.7

Reserve for employee benefits 528.2 495.1 576.2 661.4 731

Equity 49.9 26.9 -66.8 -111.3 -193.9

2007 2008 2009 2010 2011

Leverage Ratio(Debt/Asset) 38% 47% 47% 48% 51%

5.2 Fiscal Regime: The True Reason That Impeding Pemex

According to Pemex 2011 annual report, the company has contributed 876 billion peso as

“tax and duties submission” to the government, while their operating income is 681 billion peso. In

the meanwhile, the government revenue at that year was approximately 3333 billion peso9, which is

to say, at least 30 cents out of every peso in the national fiscal revenue comes from Pemex. The

historical data below10 also prove Pemex’s heavy fiscal burden to Mexico.

Table 5.2 Pemex’s Contribution to Federal Income and GDP

2005 2006 2007 2008 2009 2010 2011

Pemex’s contribution

as of the federal

income

37.30% 38.00% 35.40% 36.90% 31% 32.90% 34.50%

Mexico’s revenue from

the oil/gas industry as

of the GDP

5.85% 5.24% 4.47% 5.68% 4.13% 4.49% 4.92%

Pemex’s large contribution to Mexico’s fiscal revenue could be a positive signal suggesting

                                                                                                               9 "Economy Watch - Follow The Money." Mexico General Government Revenue (National Currency) Data, General Government Revenue (National Currency) Mexico. N.p., n.d. Web. 31 July 2013 10 Pemex Investor Presentation. N.p.: PEMEX, n.d. PPT.  

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Pemex’s importance in the country, however, under such heavy tax obligation, this company could

not breathe at all. Pemex has been lagged behind due to this fiscal regime, especially when these taxes

and duties have not been exchanged for equal re-investment in itself.

Oil industry, known as a capital starving industry, requires chunks of investment in the

research, development and strategic planning. In StatoilHydro, a Norwegian firm which also has

representative office in Mexico, an engineering geologist said his company invested 35 cents for

every barrel produced into research and development. In Pemex case, Pemex does not have the

autonomy deciding how much of its retained earnings being reinvested into its production cycle, on

the contrary, most of Pemex’s tax contribution was actually spent in the state’s public expenditure. In

a report 11of Woodrow Wilson International Center for Scholars, there is a pattern of behavior of

relating a higher crude oil price with higher spending in Mexico. “Surplus oil revenues were

mismanaged at the state level.” That surplus was even spent in the items like “personnel services”,

which benefits the bureaucrats, but makes Pemex suffered.

Therefore, the existing criticisms about Pemex’s lack of research ability and lack of strategic

planning are wrong, it is the current fiscal regime that lagged Pemex behind, not Pemex itself. We are

supporting PRD’s reform proposal on this point, which asks to perform oil surplus revenue for

productive investment and more room for budget autonomy as well as management autonomy.

5.3 Cultural and Historical Factor

The cultural and historical factor may sounds like a least minor factor but in fact it has the

most important meaning. In Mexico, oil represents something largely symbolic. Pemex is more like a

national pride and historical legacy that could not be took over by any outsiders. For those Mexicans

whose grandmothers had donated jewelry to help pay for the nationalization, seizing control of

British and U.S. companies in the late 1930s, the proposal of changing Pemex’s ownership is more

like betrayal. It is also this kind of emotional attachment keeping Pemex untouched in the previous

privatization tides, which privatized Mexico’s national telephone, railroad companies, and the state-

run airline.

Politicians should listen to public’s voices. As long as this emotional factor still exists and

plays its irreplaceable role, political parties should foresee the possible negative result of aggressive

reform and move every step with full discretion.

PART VI. THE ALTERNATIVE ACTION PLAN

Renewable energy industry should be given more attention and could be better developed on

its own as an independent private sector with its own whole cluster of green jobs. The development

                                                                                                               11 Oil in Mexico: The Energy Reform Debate in Mexico,. Rep. Mexico Institute, Woodrow Wilson International Center for Scholars, n.d. Web. 31 July 2013

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of hydro-electricity, wind, biomass, thermal, nuclear or other resources could increase the current

energy portfolio diversity, and facilitate Mexico to comply with the Treaty of Kyoto. In the long

term, a productive renewable industry could also provide energy security by not depending

completely on fossil fuels.

What’s more important, once the renewable energy industry starts off onto a fast developing

track, it will definitely cause a positive spillover effect, injecting the vitality into the whole energy

industry, influencing Pemex and other participants in the conventional energy sector. Besides, the

alternative energy industry does not have the historical and cultural issues as conventional energy

sector, therefore the Foreign Direct Investment and domestic private participants should be

encouraged and which will bring in diversity along with new technologies. Colombia has made a

good example in this front.

Renewable energy industry is an industry which relies largely on natural endowments and

policy environment. Given the existing abundant natural endowments in Mexico, once the policy

environment becomes more appealing, international investors will pour in with capital and cutting-

edge technology

Besides the alternative energy developing plan, Mexico could also expand its national

development strategy: from relying on oil trade to manufacturing industry, which guarantees more

sustainability in the future. Mexican has relatively low labor cost as a comparative advantage and

geographical linkage to the United States as another attractiveness. In other words, instead of

exporting oil & gas, Mexico could also develop manufacturing industry as an alternative direction for

the future.

PART VII. CONCLUSION

The outright privatization of Pemex appears to be very unlikely and unnecessary not only

because of the exaggerated investment requirement, but also because Mexico has the ability to retain

ownership of all hydrocarbon production, to develop technologies of its own, and to form value

chains under a revised fiscal regime and a proper policy setting.

Pemex and its nationalization are of great importance to Mexico. If the scenario is to avoid

the privatization, the government needs to endow more autonomy to Pemex, fostering the abilities of

Pemex to directly invest its earnings in exploration and production, instead of being inappropriately

allocated for unrelated items or even corruption.

Government should also shed attention to the development of alternative energy industry,

the prosperity of which may bring to other conventional energy industries vitality and a sense of

competiveness. Besides, government could consider expanding its national development strategy for

the sustainability in the future.

“We need an energy reform that does not privatize the oil but... an energy reform that frees

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Pemex from its strangulation by the union, from its fiscal exploitation by the government; an energy

reform that fits Mexico in with the energy revolution in North America and leads the country to

become an integral part of it”12.

It's not about discovering more oil, but about taking advantage of the lessons offered by

other countries that manage their petroleum much better than Mexico does. Countries like Saudi

Arabia, Brazil, Colombia, Norway and Russia that have flexibly and pragmatically reformed their

hydrocarbon sectors. So, solution could be designing more effective and robust regulatory

frameworks, allowing the state operator--like Statoil in Norway--to retain control of the resources,

and to effectively utilize the oil revenues.

                                                               

                                                                                                               12 Mexican Institute for Competitiveness

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WORKS SAMPLE FROM ACADEMIC COURSE

International Business: Case Studies

Professor Eugene Laney

• Completed by Tuyana Chimitova

• Memo to CEO of General Electric (GE), Jeff Immelt, explaining on why the United

Nations’ mission is important to GE’ business activities;

• I analyzed the business operations of GE and examined the results of undertaking certain

actions outlined by the United Nations;

• Skills I employed: critical thinking, creative thinking, analytical reasoning, business writing

and presentation skills; problem-solving skills to policy-related problems;

• Progress towards the objectives in Syllabus: 100% because I increased my knowledge of the

role of multinational corporations in the international trading system, of the regulatory

regimes that govern international trade, and of corporate compliance policy and strategies. I

learnt interpreting multinational corporations’ strategic and managerial challenges in the area

of international trade;

• Progress towards achieving my IDP goals: 90% because I was able to practice thinking from

variety of different angles to evaluate the impacts and correlations between various

governmental policies and corporate actions that altogether impact the regional economic

development.

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 Mr. Jeffrey R. Immelt Chairman and CEO, General Electric 705 West Rd New Canaan, CT 06840-2518 (203) 972-2680 Dear Mr. Immelt,

In July 2010, the United Nations General Assembly created UN Women, the United Nations Entity for Gender Equality and the Empowerment of Women. Considering the worldwide breast cancer movements and a global supply chain in healthcare technologies, GE is affected by the objectives to be pursued on the achievement of equality between women and men as partners and beneficiaries of development, human rights, humanitarian action, peace, and security. For example, Saudi women have some of the lowest numbers for screenings, but breast-cancer screenings make it one of the most preventable cancers you can treat. The main tangible changes for GE are:

• Be flexible and adaptive so to create in-country solutions through indirect methods of

empowering the women; • Ensure alignment of GE policies with UN Women objectives and local government; • Need for more female doctors in Saudi Arabia and other Middle East countries because a

woman can only see a woman doctor; • Hire more women in healthcare business operations worldwide to provide access to

decent work, and to avoid occupational segregation and gender wage gaps; • Partner with the Saudi government around breast cancer and screenings; • Involve in training and education of women in the countries where GE operates what

creates additional costs in order to actually hire the women; • Focus on the very specific needs of the country.

Although necessary and important for improving the gender equality, the UN Women also

brought some challenges. Some countries are very opposed to the UN intervention finding it assaulting to change the country’s traditions and culture of women’s role in their society. It often creates diplomatic conflicts between countries slowing the business operations in the country. Indeed, it causes financial losses also due to decreased or complicated women access to a healthcare.

Although Mideast countries are technologically advanced, men dominate them. GE must

present this issue to the UN and Mideast countries, as well as to WTO and WHO in order to require a compliance of those policies with us as one of the largest investors in technology innovation and research.

I remain at your discretion to present more in-depth effects of the UN Women work in

those countries where GE Healthcare operates. Looking forward to hearing from you. Sincerely, Tuyana Chimitova President, GE Americas

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International Business-Case Studies in the Strategic Management of International Trade Affairs

Dr. Eugene Laney Jr.

202-251-7476 and e.clifflaney@gmail.com

Tuesday 6:30-9:30

Summer 2013, Section 4843

Course Description The course examines multinational corporations’ strategic and managerial challenges in the area of international trade by focusing on a series of case studies that will help the students better understand international business and trade interface. For each case, topics include customs and security regulations, climate change policies, import safety, export control, financial services, intellectual property rights and technology transfer. And Corporate Social Responsibility is considered from an international business-government relations perspective.

Course Goals This course is designed to provide an understanding of the relationship between multinational corporations’ activities and government policies from a global perspective. This course is a 3000 level course; however it would be helpful for students to have previous familiarity with international trade policy.

Student Learning Outcomes Objectives By the end of the course, students will demonstrate competency in the following areas:

Knowledge

• Increase knowledge of the role of multinational corporations in the international trading system.

• Increase knowledge of the regulatory regimes that govern international trade. • Increase familiarity of corporate compliance policy and strategies.

Skills

• Improving business writing and presentation skills. • Applying problem-solving skills to policy-related problems. • Interpreting multinational corporations’ strategic and managerial challenges in the area of

international trade.

Civic Learning

• Increase civic engagement and interests in international trade policy. • Understanding individuals and corporations social responsibilities.

Required Texts • Joshua Goldstein, International Relations Brief, 5th Edition. Washington, D.C, Longman, 2009.

Recommended Secondary Readings In class, the professor will provide to each student international trade case studies and handouts of secondary readings.

Course Requirements

Group Case Studies/Class Participation 20%

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Midterm Exam 25%

Presentation 30%

Final Exam 25%

Presen ta t ions Each student will have an opportunity to complete a final project. The project will be a review of a trade policy case study, which involves tracing its history, analyzing government and corporate roles in which it developed, and assessing its intended and actual impact. The review (5 pages) should contain a thoughtful analysis of different policy options and a policy recommendation, on which the student takes and supports a position and addresses to an appropriate decision-maker. Exams The Midterm and Final Exams will be based on the content of readings, lectures and class discussions. Part i c ipa t ion Each student will be asked to participate in weekly discussions of substantive issues surrounding an international trade case study and provide one-page business memos, on which class groups take a position and address it to an appropriate decision-maker. Classroom and Grading Po l i c i e s All grading will be done on a point system. Students will earn points for assignments and in class projects. It is the student’s responsibility to present your homework when you miss class. You will be given the number of classes missed to make up the assignment. Please turn in late work. It is better to earn partial credit than none at all. Attendance Po l i c y Each student is required to attend every class and arrive on time. If a student has an emergency, he or she should contact the professor prior to class. Disc la imer Readings, assignments and due dates may be subject to change over the course of the semester. Your professor will advise you of any changes and present them to you in writing. Class Schedu le Jun. 4: Introduction to international trade affairs and the Case Study Methodology

a) Discussion: What is International Trade Affairs? b) Group Workshop: Impact of Auto Trade Between U.S. and Japan c) Distribute Company Assignments d) Next week’s readings: I.R. Goldstein Chapter 1 e) Next week’s case study assignment: India

Jun. 11: Governments’ view of the international trading system

a) Discuss previous week’s assignments

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b) Discussion: What role do Governments play in the international trading system? c) Group Workshop: India d) Next week’s readings: I.R. Goldstein Chapter 5 e) Next week’s case study assignment: Google

Jun. 18: Multinational corporations’ view of the international trading system and regulatory regimes a) Discuss previous week’s assignments b) Discussion: What are corporations’ interests in the international trading system? c) Group Workshop: Google d) Next week’s assignment: I.R. Goldstein Chapter 6 e) Next week’s case study assignment: United Nations

Jun. 25: Non-Government and Intergovernmental Organizations role in international trade

a) Discuss previous week’s assignments b) Discussion: What role due NGO’s and IGO’s play in international trade? c) Group Workshop: United Nations d) Next week’s readings: I.R. Goldstein Chapter 4; World Customs Organization Mission,

online at www.wcoomd.org e) Next week’s case study assignment: UPS

July 2: Case Studies in Corporate Customs Compliance and Corporate Security Compliance a) Discuss previous week’s assignments b) Discussion: The importance of a secure supply chain? Lufthansa Airlines, Halliburton and Marriott c) Group Workshop: UPS and World Customs Organization Mission, online at www.wcoomd.org. d) Mid-term Exam Review

July 9: Mid-term Exam and Final Project Assignment: Student’s Individual Case Studies

a) Mid-term Exam c) Assign Final Project Case Studies (Due April 24) d) Next week’s readings: I.R. Goldstein Chapter 7 e) Next week’s case study assignment: American Association of Importers and Exporters Compliance Article

July 16: Case Studies in Import Compliance and Export Compliance

a) Discuss previous week’s assignments b) Discussion: Corporate Trade Compliance and Lockheed Martin c) Group Workshop: Import Safety d) Next week’s readings: I.R. Goldstein Chapter 8 e) Next week’s case study assignment: Starbucks and GE

July 23: Case Studies in Corporate Social Responsibility and Climate Change Corporate Trade Policy a) Discuss previous week’s assignments b) Discussion: Trade and Corporate Social Responsibility c) Group Workshop: Starbucks and General Electric and Green Technology d) Next week’s case study assignment: Government Simulation Assignment, Global Intellectual Property Rights

July 30: Individual Case Studies a) Students Present Individual Case Studies b) Final Exam Review

Aug. 6: Final Exam

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TWC Course Policies For a detailed list of all TWC policies, please refer to your student handbook.

Pro fe s s iona l i sm We strongly encourage students to be professional at all times.

Equal Oppor tuni ty/Aff i rmat ive Act ion The Washington Center actively subscribes to a policy of equal opportunity in education.

Class Cance l la t ion Students are expected to attend every class period as scheduled unless there is an unavoidable circumstance or illness. Classes do not meet on federal holidays; however, your professor may elect to reschedule the class for another evening to make-up time and work.

Verbal , Sexual , Ethni c/Rac ia l Harassment The Washington Center does not tolerate harassment of any nature. Verbal, sexual, ethnic and or racial harassment in any way of its students, staff, and faculty are prohibited. The Washington Center advises students to notify their Program Advisor if they believe they may have been exposed to sexual or verbal harassment.

Disabi l i t y Serv i c e s If you are a student who is defined under the American with Disabilities Act and requires assistance or support services, please inform The Washington Center's disability coordinator, by emailing disabilityservices@twc.edu. The coordinator will organize such services as note takers, readers, sign language interpreters, etc. If you need course adaptations or accommodations because of a disability, if you have emergency medical information to share, or if you need special arrangements in case the building must be evacuated, please make an appointment to speak with disability services upon arrival. Disability services information is available on online at ww.twc.edu/disability_services.shtml.

Academic Misconduc t

Academic misconduct includes, but is not limited to the acts listed here. For a full statement of the policy of TWC on academic misconduct, please refer to the TWC Academic Course Handbook. The Washington Center reserves the right to impose penalties and sanctions for any incident of academic misconduct up to and including failure for the course and expulsion from the program.

1. Plagiarism. Plagiarism is a form of academic misconduct and is considered academic fraud. It is an attempt to receive a grade or other credit that would not be granted if the instructor or others knew the full truth about the work you submitted. Plagiarism occurs when someone copies or takes the intellectual work of another as one’s own, and fails to properly reference or provide proper and fully adequate attribution to the original author of the work. Plagiarism may be either intentional or unintentional. Plagiarism may also take the form of self-plagiarism in the event of trying to submit work done for another course or program for credit without the express permission of instructor.

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2. Cheating. The use of notes or books when prohibited, and the assistance of another student while completing a quiz or an exam, or the providing of information to another individual for this purpose, unless such collaboration is approved by the course instructor.

3. Falsification. The improper alteration of any record, document or evaluation.

4. Obstruction. Behaving in a disruptive manner or participating in activities that interfere with the educational mission of The Washington Center at lectures, courses, meetings or other sponsored events.

5. Absenteeism. The chronic failure to attend program components (including internship, internship courses, or other scheduled activities) without a valid reason or prior notification. Missing two or more classes might result in a lower grade evaluation for the course. Also, in such cases your instructor will notify the courses coordinator, who will notify your program advisor and possibly your campus liaison.

6. Disruptive Behavior. Any behavior, whether active or passive, that interferes with the environment of teaching and learning or tone of professionalism as established by the instructor.

7. Complicity in any act of academic misconduct by another person.

Student Grievances If students have a problem with their instructor, the course material, class format, or other aspects of the course, they should speak to the instructor first. If that is not possible or they choose otherwise, students should speak with the course coordinator who will arrange a conference in consultation with the director of academic affairs. If students wish to make a formal complaint, they must submit it in writing to the courses coordinator at courses@twc.edu. The courses coordinator will relay it to the director of academic affairs, who will investigate the situation, consult the relevant parties and inform the student of the progress of the investigation in order to come to a resolution of the situation.

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Public Policy Dialogues on Capitol Hill International Pre-Meeting Worksheet 1. Meeting Date: 07/17/2013 2. Staff member name/position:

Fred Turner, chief of staff to the Helsinki Commission (Commission on Security and Cooperation in Europe). He serves as the primary liaison between the political leadership of the Commission and the other Senators, House Members, and Executive Branch Commissioners. Mr. Turner advises Commissioners on foreign policy matters; shapes policy approaches for Commission hearings, briefings and special events; and has organized and participated in more than a dozen Congressional delegations abroad. Prior to his leadership of the Helsinki Commission, Mr. Turner served for more than twelve years on the staff of Congressman Hastings, the last seven as Chief of Staff. Mr. Turner also served as an Associate Staff Member of the U.S. House of Representatives Rules Committee, Democratic Staff Director of the Rules Subcommittee on Legislative and Budget Process and Democratic Staff Director of the U.S. House of Representatives International Relations Subcommittee on Europe. Previously, he served as Legislative Director for Congresswoman Karen McCarthy and as a graduate fellow with the Anti-Defamation League. Mr. Turner is an honors graduate of American University where he earned his B.A. and M.A. in political science. For several years, Mr. Turner also served as an Adjunct Professor of Government at American University's School of Public Affairs. He is also the author of The Participation of Members of the U.S. Congress in NATO and the Organization for Security and Cooperation in Europe (OSCE) Assemblies (co-authored with Zlatko Sabic). 3. What does this organization do?

It’s an independent agency of the Federal Government charged with monitoring compliance with the Helsinki Accords and advancing comprehensive security through promotion of human rights, democracy, and economic, environmental and military cooperation in 57 countries.

4. Policy issues important to me:

1) Organization’s role on the Immigration policy? 2) TIPP and TPP impact on security and cooperation issues? 3) What are the main issues that will need to be addressed in next 10 years, and how to avoid

negative consequences?

5. What is my perception of U.S. foreign policy towards my region?

It’s very strategic, constructive and tactful but often controversial in its goals and agreement terms leading to never ending negotiations.

6. What do I expect to learn from this meeting?

I expect to learn more about the Helsinki Commission role in foreign affairs especially with Russia, and how effective and efficient the monitoring compliance is, and what are its challenges?