Dear Colleagues and Partners,

The Asian financial crisis continues to unfold. As it does, the time is right to ensure US-AEP�s strategy is on track to meet the changing needs of our Asian and American constituents.

Though turbulent, the economic picture in Asia is not completely grim: Three out of four top U.S. executives surveyed by the Asia Pacific Economic Review (May-June 1998) expect that in the year 2005, the Asia region will create most of the world�s new jobs. In addition, almost half of the survey respondents expect that their company�s strongest revenue growth in 2005 will come from Asia.

Whether or not such positive predictions prove true, US-AEP�s commitment to the region remains unchanged. No matter the duration or depth of the financial crisis, US-AEP takes the stand that the environmental and economic health of the United States and the Asia region remain inextricably linked. Throughout the crisis and long after it has become a thing of the past, US-AEP will continue building U.S.-Asian relationships that help to foster the sustainable development of Asia.

The Asian financial crisis is prompting a shift�not a slow-down�in US-AEP activities. While our sales and trade activities have clearly been impacted, initiatives in other components have moved to the forefront of US-AEP�s agenda. For example, our Policy Group is taking a lead role in working with Asian governments through a late-July workshop in Bangkok on economic recovery and environmentally sustainable industry. The Clean Technology and Environmental Management (CTEM) initiative continues to foster industrial transformation in Asia, promoting�among other things�the adoption of environmental management systems as a cost-saving measure for Asian industry. And US-AEP is helping to strengthen Asian financial institutions by promoting environmental due diligence�the adoption of environmental criteria into financial lending practices.

US-AEP activities must continue to change to reflect the effects of the financial crisis on both Asians and Americans. As an example, many Asian governments have been forced to abandon the environmental infrastructure projects needed to meet their peoples� basic needs for clean water and sewerage facilities. If the facts on the ground justify, it may make sense to renew the program�s focus on privatizing environmental infrastructure. We are actively involved in such efforts in Bangkok. The worldwide attention now focused on climate change has serious implications for US-AEP, as well.

US-AEP remains a modest program with a big agenda, and our job of selling the ideas and the products of a "clean revolution" may be made more difficult by the Asian financial crisis. However, I believe that with the collective talent and dedication of US-AEP�s people, we will continue to meet the goals we set for ourselves. Please feel free to contact me with your ideas about US-AEP�s ongoing evolution.

�Peter Kimm, Executive Director

Under a 1996 grant from US-AEP�s State Environmental Initiative, the state of Texas and Bangladesh formed a public-private partnership to foster the use of environmental management systems (EMS) and pollution prevention (P2) technologies. Two major efforts under this project are continuing under the leadership of the University of Texas at Austin and the Bangladesh University of Engineering and Technology.

Tanneries in the Hazaribag area of the capital city, Dhaka, are discharging raw wastewater into the Buriganga River�the primary drinking water source for more than ten million residents. To combat this problem, the project team�s full-time environmental coordinator in Bangladesh has been building government and international funding support for a regional wastewater treatment plant. The proposed facility would enable collection of wastewater from several tanneries into a central location for processing prior to discharge. Financing negotiations for the plant are underway between the government of Bangladesh and various international donor agencies, including the World Bank and the Asian Development Bank. The SEI project team hopes to bring U.S. equipment and expertise to design and install the wastewater facility; in the coming weeks, representatives from Texas� Water Resources Management, Inc., Lower Colorado River Authority, and Jona Synergy Corporation will travel to Bangladesh to market their P2 equipment and expertise. (The government of Bangladesh will have final authority in the selection of consultants.)

The SEI project is also working to remediate naturally occurring arsenic, which leaches into groundwater used by millions of Bangladesh�s citizens. Supporting U.S. companies that can provide solutions to this problem, Dr. Zaid Chowdhury�a consulting engineer at Malcolm Pirnie, Inc.�met World Bank representatives in Dhaka to explore funding possibilities. The World Bank is now in final negotiations with the government of Bangladesh on this project and expects that negotiations will be complete by the end of this month. (Note: US-AEP�s State Environmental Initiative is managed by the Council of State Governments.)

US-AEP/Korea organized a well-received U.S. Pavilion at the Envex �98 International Exhibition on Environmental Technologies, held June 16-19 in Seoul. Twenty-one U.S. companies presented their goods and services in the pavilion, 16 of which were represented by Korean agents. The U.S. exhibitors garnered more than 110 trade leads at the show and concluded $200,000 sales agreements after the event�particularly noteworthy statistics given Korea�s current economic difficulties. Altogether, Envex �98 featured 121 companies from 12 countries, with technology exhibitions on water, wastewater, and waste treatment; air and water monitoring; recycling; and lab-testing equipment.

The American Consulting Engineers Council�US-AEP�s partner for urban infrastructure projects�has launched a new international Web site at http://www.intl.acec.org. The site features several free services for U.S. consulting engineering companies seeking overseas business. These services are featured within the "Global Trade Resource Center" section of the site and include the "Inside Track," an infrastructure trade lead system designed to help U.S. firms identify potential partners overseas. Also featured: an international directory of U.S. consulting engineers and country market reports tailored to the design and construction industry.

Greetings... to Gerry Sanders, US-AEP�s new Technology Representative in Indonesia. Gerry was formerly a Tech Rep in US-AEP�s Hong Kong office. He is now reachable at US-AEP/Indonesia: U.S. Commercial Center, Wisma Metropolitan II, 3rd Floor, Jalan Jend. Sudirman Kav. 31, Jakarta 12920, Indonesia; telephone: 62-21-526-2848; fax: 62-21-526-2849; e-mail: usaepdir@rad.net.id.