Could you give us some background information about the Ministry's history and operations?
As for all Finance Ministries worldwide, the Ministry is responsible for budgeting, taking care of revenue generating activities for the Government, including tax, fines and everything else, also controlling the expenditure activities, also a variety of controlling functions, auditing government organizations, how money is being spent, and also managing government debt.
Your Ministry wants to achieve a zero budget deficit within the next couple of years. What measures are you planning to adopt to achieve this goal?
Our election platform included a pledge to bring the budget deficit to zero. We did not commit to a particular set of steps for balancing the budget but at this time we are targeting the next year's budget, i.e. the budget for 2003 to be a balanced one. We would start the preparation for this budget mid 2002. Although, of course, we would have liked to balance the budget starting from 2002, we are planning some ambitious tax reforms that will actually lead to some loss of revenue, and I don't think it would be possible to balance the budget starting from next year. To ensure the budget is balanced, we will both increase revenue and collection through taxes that exist without raising tax rates but improving collection of revenues and in particular focusing our efforts on the customs administration and on the tax administration, but also for the expenditure size - cutting and reducing some expenditure items.
To your opinion, what sectors offer the most potential for foreign investment in Bulgaria?
I think the financial services sector is a relatively underdeveloped sector. In addition, food industry and tourism have grown in the last couple of years and there's no reason for them not to continue growing. I also think that infrastructure and energy would be a promising field. And indeed a couple of large US companies have already started investing in the electricity sector. Finally, telecommunications, as in many other countries, will probably offer a lot of scope for involvements, especially in Bulgaria where this sector is lying in sophistication.
In your search for attracting foreign investments, what sort of incentives and facilities do you provide for those willing to invest in ventures?
Apart from tax incentives that already exist, we
are going to offer foreign investors various services
through a body specifically created for this purpose
which will be sort of a one stop-shop for foreign
investors... But going back to the tax incentives,
as I said, we don't try to favour some industries
of others in the media term, although at the moment
agriculture, for instance, enjoys exemption from
many taxes. In general, we are going to offer serious
incentives for all companies in all industries,
which will include 0% profit tax on profits that
are invested in the enterprises. This is something
that has been tried by Hungary some years ago and
by Estonia two years ago with success. In other
words, companies that reinvest their profits will
not pay tax on them until they distribute some as
dividends... This is an incentive for foreign investors
to invest in the country and for good investors
to reinvest their profit in our country. |
What would you consider the most positive and negative aspects of the investment climate in your country?
I think that low labor costs are a major advantage, coupled with the very good level of education and training. Let's not compare it with Western Europe. But even compared to Central European countries such as Hungary, or Poland, or Czech Republic, our labor force is equally well trained; yet the cost is several times less. That's a major advantage. Traditionally Bulgaria has emphasized software and hi-tech industries; there is a lot of expertise in that area. Climatic weather conditions are also very good, which is important for some industries.
On the negative side, we have to say there is a relative underdevelopment of infrastructure, which is still an important factor.
In view of the upcoming elections, do you think that the government will continue on the same line of policy making, liberalizing and privatizing?
If you are asking whether we will do these two things - yes, we will. We will speed up these processes. I don't think it makes sense to comment on the previous government's record. We think that privatization could have been faster, and we are trying to speed it up and effectively finish all privatization in the next one or two years.
How do you see Bulgaria's prospects for joining the EU by the year 2007?
2007 is, I think, the general first assessment for the EU, it's a target date, which means, of course, that negotiations should be completed by around 2004-2005. I think that Bulgaria has a very good chance of getting it - obviously many other countries from Eastern and Central Europe are still a way ahead of us in this process. And as long as they get into the EU according to that target date, it would be an obstacle to Bulgaria to get into it. We are, of course, committed to do the best.
How do you view Bulgaria's economic situation four years from now?
I hope that as a result of sustainable and hopefully high economic growth in the upper single digits, Bulgaria will be a much better place to live in for its citizens. There will be a welfare program for those in need. Bulgaria will be on the waiting list of joining the European Union. As far as this Ministry is concerned, I trust that it will do a much better job in collecting what is due to government, cutting down the size of the underground economy, helping to reduce corruption to the minimum. And, having reduced the size of debts, Bulgaria must first reach its target of debt reduction to 60%. Once this is achieved, we will be in the final runway for joining the EU.
What would you consider to day the biggest achievement of your Ministry?
It's probably a bit early to talk about achievements having been in office for less than a month, but I am glad that for instance the reforms in the countries administration have been taken very positively. We are already witnessing the first signs that it's going to get much better.
What final message would you address to our readers?
It is about time that the international business community notices the progress made by our country. The corruption and high bureaucracy that deterred foreign investors in the past is no longer present. All our ministries are runner by ex pats who are highly qualified and enthusiastic about the changes taking place and the future laying ahead for Bulgaria.
Note: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions. |
