Could you give us some background information in terms of the history, structure and activities of your Agency in Bulgaria?
The Foreign Investment Agency was established 6 years ago - in 1995. It is a state-owned organization to the Council of Ministers. It has three functions: The first is to market the country among the potential foreign investors abroad. The second function is to provide services to already existing foreign investors in Bulgaria and to potential foreign investors who would like to discover the different opportunities in Bulgaria. The third function is to gather and analyze all the necessary statistics about foreign investment in Bulgaria.
What have been the latest developments in the investment climate in Bulgaria? What opportunities have aroused in Bulgaria? What would you consider to be your Agency's contribution to these developments and creation of opportunities?
This is very difficult to judge. It has been a very short period of time since the election, only three months. Actually the new government has been in function only a couple of months. So today it's kind of early to give you the results but I can answer practically what we intend to do. We intend to create a very favorable business climate in Bulgaria. We will change the accountancy law and will reproduce Western accountancy. We would like to improve the tax system. Basically we would like to create an environment to introduce capital markets in Bulgaria. We have to do that within a very short period of time. We would also like to fight with the corruption extremely aggressively. So overall we intend to create a very favorable business climate in Bulgaria because we know that there is a lot of money in the world but very few good deals. We would like to make Bulgaria a good deal. That's how we can attract foreign investors, and not with knocking on doors and promising things. If you have good and favorable business climate, people will come themselves. The best customer is the satisfied customer.
Forecasts have predicted billions of dollars in foreign investment. What projects are being developed to attract this investment?
There are several projects. We predict that half of the money will be attracted through green fields. Most of the companies already existing in Bulgaria are re-investing their profits, which is also a good sign for the business community. There are several sectors, which for the moment attract the attention of foreign investors - the energy sector, the transportation sector, the sector of "classical" industry with electrical appliance manufacturing and services. For example, one of the major deals for this year will be the entrance of the second GSM operator in the country - GLOBUL is the name of the Bulgarian GSM operator but the second GSM is actually the Greek company OTE. They are now developing their infrastructure and we are expecting their total amount of investments to reach more than $200 millions for the year 2001. There are several projects in the transportation sector. One of them is the UM group. They built the first phase of Port Terminal for liquid chemicals in the Port of Varna. What is very interesting for Bulgaria is that the majority of the investments come through medium-size companies and practically there are a lot of investments made in different industries, in the tourism sector and the services, which do not exceed more than $10 million, but these are numbers. One of the examples is the Lither company for refrigerators, which was built in the end of last year but which practically began to function in the beginning of this year. They are going to produce 200 000 refrigerators a year and 95% of them are for export. So, I think that the projection for this year, which is approximately $1 billion, is absolutely achievable. Even now the analysis shows that until the middle of the year we had the same figures as for the year 2000, when we reached $1.12 billion of foreign investment. I think that regardless of the fact that 2001 is an election year, the foreign investors are investing, it means that they have confidence in the country, in the policy of the Bulgarian government, in the fact that Bulgaria remains and will remain an economically stable country within a not very stable region.
Although there are some radical changes we would like to assure you in the continuation of the same policies of the previous government, which is very important. We will simply try to improve certain areas in which they did not accomplish the results they were supposed to. Even the fact that we have a very smooth transition is an indication of good work. There are certain small practical complications but basically it's a very smooth transition because the business likes stability and continuation.
The current development has created a great deal of incentives to attract foreign investment. How does your Agency provide guidance for investors and how do you make perspective investors aware of the new incentives and opportunities offered by the current government?
We would like to do that in a Forum; it would be
interesting and a lot of companies would be visiting
it. We would also start doing investment marketing.
We need to oversee the Agency. We need to approve
the budget. We just discussed today that we would
form a whole new department. I would like to make
it a sales office although it's governmental. We
have to identify as well what kind of product we
have to sell. |
How would you like to market yourselves?
Through advertising. We would like to knock on doors, we would like to approach investors that have been in Bulgaria and for one reason or another they are no longer here, they just left. We would like to find out what we can do to attract the investment.
In terms of statistics, could you give us some figures, such as staff size? How are the Agency's operations financed currently? Do you have a budget for advertisement promotion?
We have a very small, i.e. just symbolic budget for marketing, advertising and promotion as a whole. The staff of the Agency is 27 people. I hope it will be a success for my successor that the staff of the Agency would be more and I hope that there will be some money for investment promotion. Otherwise we are trying to find different ways and one of them is the Internet because the quality is high and the effect to attract more people to know about Bulgaria is also very high. You can see some of the investment promotion materials here. They were not done with the budget of the Agency but with the assistance of the EU and the money they are allocating for such kinds of projects.
In terms of projects for the future, do you have any projects you're working on?
We have three big projects in the energy sector. Two of them are for two electric plants based on coal production. They are in the Southeast part of Bulgaria. They are called Maritza East One and Maritza East Three. The total amount of the projects that are implemented by two US companies is $1.4 billion. There is project for a coal generating plant in Devnya, which is close to Varna, in the Northeast of Bulgaria, on the seaside. It will be implemented by Solvay Group for the total amount of approximately $200 million. So, I expect ¼ of the total investments for the next three years to come through for those three energy projects. We hope to attract approximately between $4 and $5 billion for the next four years at least. The other projects are in the telecommunication sector. We have to sell at a very good price the Bulgarian Telecommunication Company (BTC). There is still an ongoing project - Cable Bulgaria, which will be a kind of competitor to BTC. It's a company based on new technologies and they are going to provide different ways and channels to transfer data, video image, Internet. The total amount of the project is also $200 million. There are several other projects which are smaller but for which we also have institutional support formalized by a decree of the Council of Ministers, in the transportation sector, in the chemical industry, in the pharmaceutical industry, and in the wood processing industry.
A question on a more personal level: Could you give us some background information on yourself, what have you worked on before, what are your qualifications, and what are your experiences?
Before becoming president of BFIA for a year and a half I was the Deputy Minister for Trade and Tourism. I was responsible for foreign investment in these sectors in bilateral technical assistance. Before that I used was the head of a very small advertising company. I graduated from the Moscow State Institute for International Relations as a master of science in International Economic Relations.
I have a little bit more of a complicated background. In the early 1970s I lived in Germany for a while. I then established myself in New York in the mid '70s. I graduated in Engineering here in Bulgaria, and I have M.B.A. from NYU (New York University). One of my biggest achievements is that I passed a very extensive training program in the mid 70's, which lasted a year and a half. Then from a very vast place I went to a very small place - I went to the real-estate business. I was in acquisitions and then I became a partner in a major real-estate company in New York, in Manhattan. We managed a substantial portfolio of office buildings and apartment buildings. Then I came back to Bulgaria and I got involved in politics. I was the Prime Minister's General Campaign Manager and we won the elections. I was assigned to improve this Foreign Investment Agency and to use my political power to try to get some money because marketing is a very expensive thing.
Our readers are all top decision makers and businessmen such as yourself. They are interested in the opinion and visions of other top decision makers and businessmen. As a chairman of the Bulgarian Foreign Investment Agency what would be your final message to them?
Come to Bulgaria! It has a beautiful climate. The food is excellent. We will create in a very short time a very favorable business environment.
Note: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions. |
