American Chamber of Commerce in Bulgaria (AmCham) Vice President Stefan Ivanov emphasized that the Bulgarian Government should adopt a proactive approach, encourage and facilitate the first steps of foreign investors in Bulgaria and their subsequent activities. Ivanov said that his Chamber is receiving enquiries from potential investors, who assess the country as an investment destination.
Regular surveys carried out by the Bulgarian-German Chamber of Industry and Commerce (DBIHK) of its members found that Bulgaria is an attractive investment option, DBIHK CEO Mitko Vassilev said.
"Most Greek companies in Bulgaria have invested and continue to invest in Bulgaria, following their long-term strategic plans. They have come here to stay," Ioannis Polykandriotis, Chairman of the 150-company Hellenic Business Council in Bulgaria (HBCB) and CEO of EKO Bulgaria said.
Greek investments in Bulgaria exceed 2,000 million euro, Polykandriotis said. He recalled that the largest Greek companies, most of which are HBCB members (for example all Greek banks), have established themselves on the Bulgarian market and implement long-term investment programmes.
Vassilev said that his Chamber does not know of any investor withdrawals, but there are already some German business projects which are frozen or postponed. He recalled, however, that a number of other German companies announced their entry in the Bulgarian market in 2008: Lidl, PENNY, Plus, and the Deichmann shoe company, which has already opened its first stores in Bulgaria.
About 450 leading German and Bulgarian companies are members of the DBIHK. In 2008 Germany accounted for 10.8 per cent of Bulgaria's total trade and German investments exceeded 300 million euro. Vassilev expects a new surge in the bilateral economic relations due to some until now inadequately used potentials, such as power generation and especially renewable energy sources.
Vassilev pointed out that Germany's Enertrang plans to invest over 1,000 million euro in the construction of three wind farms near Dobrich (Northeastern Bulgaria). Another German company, N-Vision Energy, will build two wind farms, in Kyustendil (Southwestern Bulgaria) and Karnobat (Southeastern Bulgaria), at the total cost of about 300 million euro.
According to Vassilev, German investments in Bulgaria have dropped by 100 million euro since the beginning of 2009, and the volume of bilateral trade has declined 21.6 per cent.
AmCham has more than 300 member companies, which collectively generate more than one-third of Bulgaria's GDP and create more than 100,000 jobs, Ivanov said. Just few investors have withdrawn from Bulgaria, including Alcoa, the second largest aluminum producer in the world, and Genmark Automation, a leading manufacturer of automation equipment for semiconductor production.
"Yet, despite the economic slowdown the number of our members is increasing, " Ivanov said. The US companies continue to invest in a wide range of industries in Bulgaria, including power generation, telecommunications, IT, foods and beverages, media, banks and real estate. Although the economic crisis has impacted all industries, some of them are still expanding, while the rest remain profitable, despite the lower turnover.
FOREIGN INVESTORS' EXPECTATIONS
AmCham has already collaborated with some of the new ministers. "Our personal experience gives us hope that Bulgaria will have a professional, transparent and responsible government over the next four years, " Ivanov said.
The Chamber's leadership recommends that the new government should keep the currency board arrangement with the same euro/lev peg and speed up Bulgaria's entry in the Eurozone. The Cabinet should minimize the budget deficit, reduce taxes and
stimulate foreign direct investment. Ivanov insisted on zero tolerance of corruption, transparent public procurement procedures and cutting red tape.
The representatives of German business in Bulgaria appreciate the low tax burden, Bulgaria's EU membership, as well as the moderate labour costs, Vassilev said. The inadequate public infrastructure, along with corruption and crime, remains a problem for investors.
Polykandriotis pointed out that Greek companies expect clear steps towards improvement of economic stability, effective absorption of EU funds, as well as promotion of direct foreign investment.
AmCham has repeatedly called for enhancement of energy security and for diversification of energy resources, including electricity and gas, as well as large-scale utilization of renewable energy sources, Ivanov recalled. He hopes that the government will thoroughly assess the energy projects before financing them.
"The fact that we are in a crisis does not mean that we should postpone or cancel infrastructure projects. Quite the contrary, their implementation will help us to overcome it," Ivanov argued.
According to Polykandriotis, Bulgarian infrastructure projects should be clearly evaluated and prioritized in terms of their long-term benefits. Greek business representatives in the country think that all large energy projects are essential and will guarantee stability, stressing Bulgaria's strategic role and creating jobs, he noted. Source: BTA