In the last of a three-part series on emerging economies, John Dean looks at the opportunities present by Eastern Europe.

OF all the emerging economies, Eastern Europe is perhaps the one that appeals most to North-East companies. The main reason is distance - hop on a plane to China and it will take 12 hours, go to Eastern Europe and it will only take three or four.

There is also a feeling for many entrepreneurs that they can understand Eastern Europe far more easily.

Eastern Europe's emergence as an economic power can be traced back to one of the most cataclysmic events of the 20th Century.

The enduring symbol of the Cold War, the Berlin Wall, was built in 1961, dividing not only a city, but mainland Europe.

For nearly 30 years, it symbolised the divide between the communist east, with its state-controlled businesses, and the free market capitalist West.

In 1989, however, after growing unrest in many communist countries, the wall was torn down by the people of Berlin. It was an event that presaged the collapse of communism in Eastern Europe.

When the dust settled, a collection of new-look countries emerged, embracing capitalism. A number of those countries are now either part of the European Union or are applying to become members.

Since then, there has been a dramatic shift in trading patterns, with Eastern European businesses freed from the political shackles that held them back for decades, seeking to attract Western trade and investment.

Exports of raw materials, agricultural products and low-tech semi-manufactured products to the West has increased and western companies are increasingly venturing into East European markets.

With a population of 40 million, Poland is by far the largest country in eastern Europe outside the former Soviet Union and also the fastest-growing economy in the region.

Hungary is seen by many as the most market-oriented and privatised country in eastern Europe, largely because the former communist regime permitted some small private enterprises.

Russia is perhaps the most enigmatic of the countries, representing a difficult and restrictive market for outside investors yet, at the same time, producing fabulously wealthy entrepreneurs, such as Chelsea Football Club owner Roman Abramovich.

Among Russia's many internal problems are a thriving Mafia- controlled black market but, for all that, foreign investors are working hard to exploit the countries opportunities.

And the opportunities are there: many of Russia's state-owned industrial enterprises, including those already privatised, use obsolete machinery, creating a market potential for western suppliers. Likewise, demand for services, particularly in computer, accounting and general management, is huge.

Case Study

PRINTING firm WH Forster is one of the companies in the region that has taken advantage of opportunities in the Czech Republic.

Working with UK Trade and Investment, the company has established contacts in the country.

About ten per cent of the company's turnover is the manufacturing of game cards for clients, some of which are marketed throughout Europe.

Managing director Malcolm Gray said: "We are a local company with a national clientele, but we were looking at expanding abroad after a very successful venture.

"We felt there could be lots of opportunities at an international level for companies in our position and we were keen to develop a strategy for exporting, possibly using the Czech Republic as a base owing to its central location."

During a visit to Prague organised by UK Trade and Investment, he met several potential customers, including newspapers and breweries, and discussions have continued. Mr Gray recently made a return visit to the country.

WH Forster, which was established in 1889, in Sunderland, has a sister factory in Gateshead, and employs a total of 95 staff.