Could you give us some information about the history of the institution?
The institution was established in 1980 as the first voluntary and non-governmental Bulgarian Association. Practically it was the successor of the Bulgarian Industrial Union, which was established in 1894 and blocked during the Communist regime. Nevertheless, the Bulgarian Industrial Association (BIA) which was established in 1980 was the first non-governmental legal entity, despite the pressure of the existing then existing system. Naturally for the last 12 years of existence there has been a change in the BIA's structure. I am very proud that this association is non-governmental, voluntary, and has not received a single cent from the government. There are no subsidies. There are some ups and downs, but definitely for the last 12 years we have been growing. We have more than 40 000 companies, organized into 27 regional associations, more than 50 municipal associations and 74 sector oriented associations and chambers. We have a matrix structure - regional and sector oriented. Our members produce more than 75% of the GDP. Our members are also cooperative unions, some universities, and some scientific organizations - like the Bulgarian Academy of Sciences. We are more oriented to the business people, not only to the industry, but industry and services in general terms.
What is the mission of the institution?
Firstly, to represent our members at the Government, the Parliament, the Executive, the Judicial, the Legislative, and the international organizations. Also to defend our members, to provide services to them, to facilitate their work in penetrating the domestic and the international markets, to raise the efficiency and productivity and competitiveness. We are providing a lot of information also to facilitate foreign investors in Bulgaria.
What kind of services do you provide?
We have focused our efforts first on the investments in Bulgaria. We have more than 100 success stories in the privatization process, also establishing joint ventures, supporting the Bulgarian small and medium size enterprises and providing financial aid to them. We have a leasing company together with IFC, we have participation in the 3rd largest pension fund, we have the exclusive right for the digital signatures/ certificates in Bulgaria, we have developed the system to provide data to the Tax Administration and pay the taxes by Internet. In this way we would like to remove the pressure from the administration towards businesses because there will be no real contact between the people. You are providing the data and then it is the server to give the answer via Internet. It is working. You can see it. We are providing VoIP. You can take this card and from any telephone you receive almost a 70% discount on the international talks. Thus we would like to suppress the monopoly of the Bulgarian Telecommunication Company and to ensure more freedom for the business people, the right to communicate between them. We are providing also services - collecting intellectual property. There are special signs that the product's intellectual property is kept by BIA, the copyrights and everything concerning this matter. We are deeply involved in the industrial relations. We are the organization that provides the collective bargaining contracts on the sector levels - BIA is the only organization in Bulgaria, recognized by the government and the syndicates. The collective bargaining contracts are related with negotiations concerning the tariffs, the salaries between the industry and the trade unions".
Are you trying to lobby in Government to promote business in Bulgaria?
We have a good lobby in the parliament. We are a member of the European Union of Industrialists and Employers (UNICE). We are members of the International Chamber of Commerce in Paris. We are members of the International Organization of Employers (ILO). This is in terms of international participation. We have established a Bulgarian Joint Consultative Committee with the EU. Practically we were the initiators of this committee and it is the second one established between the EU and an applicant country. The first one was in Hungary. In the capacity of a co-chairman of this committee we direct our discussions on topics related with the economic and social affairs. We represent the civil society in the EU economic and social committee. We also participate in 16 different national committees. Just for your information, our Vice-Chairman has been the Chairman of Supervisory Board of the National Pension Fund for several years. Because it is a rotating position, he is now the Vice-Chairman of the National Pension Fund. We participate also in the management of the Vocational Training and Employment Fund - it is a huge fund. We participated also in the Social Investment Fund. Our members are participating on expert level in different committees in the parliament. I can give you many, many examples that our members and our staff are participating very actively in preparing the legal infrastructure in Bulgaria. I could give you several examples - the Code for the compulsory insurance, the Law for the digital signatures, and others. We work with the people from the parliament, the Ministries and the Council of Ministers.
How do you finance your activities?
Our activities are financed by the membership fees
and by charging the services offered. The main part
of financing comes from the services. When a company
becomes a member, it has to pay a membership fee,
which gives the company the right to get a discount
for some of the services. Some of the services are
connected with training activities. We have organized
the Cisco academy that trains the people to receive
the Cisco certificates. Now there is a training
course in franchising and management. We are working
with many internationally recognized organizations.
We provide training on how to keep the intellectual
property with Microsoft. It is not easy to explain
all this, but you can read about all these activities
in our website. There are hyper links to other websites.
You can get information about 18,000 companies.
The information that we keep for those 18,000 companies
is about the shareholders, managers, the balance
sheets for the last 7 years. To receive this information
you have to pay a symbolic fee. You can prepare
a company profile using the references. Our subscribers
are the European Investment Bank, EBRD, Bloomberg
and others. |
Everyday we are issuing an electronic interactive bulletin, which is free for subscription. We prepare information about some sectors of the economy and sell this information. The main users are the foreign companies.
How do you promote the institution outside Bulgaria?
We have more than 6000 subscribers to our daily bulletin. They visit and surf the website and after that it is easy. We have the e-mails of the subscribers and from their e-mails we know what kind of information was of interest to them.
We proceed like this: this e-mail was interested only in the exchange rates; this e-mail was looking for more sophisticated information about Bulgarian economy. I can show you the last report on the Bulgarian economy prepared by us. It is very theoretical and pragmatically oriented and was supported by the Japanese Association for Development (JAICA). It is quite sophisticated which makes it difficult for politicians to get deep into the details and it provides a huge amount of data. It is available in the Internet, of course not free of charge. We are also deeply committed to the environmental problems. We provide the ISO 9000 services. Our people are preparing the companies for ISO 14000, including some internationals.
How do you see the entire investment climate in Bulgaria?
We are facing a number of political and economic turbulences around Bulgaria - Bosnia & Herzegovina, Kosovo, Macedonia and nevertheless the Bulgarian economy has been growing for the last 4 years. It is a good sign for the investors. In Bulgaria there is political stability. You can see this through the recent elections which were held in a very democratic way and gave the power to the opposition. I can tell you that the administration is not yet completely ready to help the investors however. We would like the administration to look at the investors as their clients and service them as such. The legislation is already in good shape. In Bulgaria, we have been having a very healthy bank system since 1997. Now we are having 17 foreign banks - Citibank, ING, Raifeisenbank, BNP and others. On our web site you can get informed about the interest rates of all those banks and about the requirements of their credit lines. The banking system is very healthy. They have capital adequacy more than 20%, some of the banks have more than 30%. There is over liquidity in the banking sector. Due to the serious bank insolvencies in 1996 there is still certain reticence towards the banking sector. It is very important that we have a very healthy banking sector because it shall provide services and ensure a reliable business environment.
In the last years we had an increase in the credit lines for the small and medium enterprises. Every year we have a 20 - 26% growth, but it is not enough yet. First of all there are not so good management skills in Bulgaria, and secondly many of the companies do not have a history, which is what the banks are looking for. We are a new economy, a newly established private sector. The small and medium enterprises are without a long history and the banking sector always looks upon them with suspicion. That's one of the reasons. Gradually the confidence between the two sectors is growing, but the economy is something that needs time to be developed".
Do you think there is potential in the Bulgarian economy?
The tourism is growing very fast in Bulgaria. In 1997 officially (non-officially it is earlier) Bulgaria had more than USD 660 millions income from tourism. In 1998 it was USD 760 millions. In 1999 it was more than USD 900 millions. In 2000 it was USD 1 200 millions. In 2001 we are expecting about USD 1 500 millions.
I can say that Bulgaria has a good potential in all labour consuming sectors of the economy, including in the sector with "soft" labour. That's why it has good potential also due to the geographical position, climate conditions, but there are not small disturbances from the political instability in the neighbour countries. We are having much potential in the software and design. There are several companies that are already working with Microsoft, with well-known companies in Europe and USA. We have good potential in agriculture, but it is a pity that agriculture is almost 100% de-capitalized, with totally destroyed infrastructure. And still we have problems with creating a land market. I am not speaking about our geographic position. It is easy to provide some services in terms of the infrastructure. Maybe you are not aware, but the main air traffic is going through Bulgaria. That's the shortest way to many countries. Five of the pan European corridors are going through Bulgaria, because the country is on a crossroad. The geographic position is definitely a resource. Maybe you know that Bulgaria is also the energy center for the Balkan peninsular - we export electricity to Turkey, Greece, a lot of gas pipe lines are going through, also oil delivery pipe lines. There are many projects concerning them - the Bourgas - Alexandropolis project is one of them. That is also a good potential".
What are your views on Bulgaria's expected entrance into the EU? Is the economy ready?
The politicians are in a hurry. My opinion, however, is that we should be in a hurry albeit more slowly. Some sectors of the economy are not ready. In this relation the industry has to be prepared to be competitive. It is very important how to negotiate, what to achieve. Our members participated in the preparation of the chapters. You know that Bulgaria closed 12 chapters already, 9 are in a process, and till the end of March 2002 the last 6 will be open.
Note: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions. |
