Borislav Stefanov, Executive Director of the InvestBulgaria Agency: Large investors do not leave the country

Evgeni Gavrilov

- Mr. Stefanov, is the financial and economic crisis the only reason for the decline in investments in the country?
- The 2005-2009 period was the best time for investments in Bulgaria. A total of 75% of all investments were made then. What has not been said so far is that these were mainly made in three sectors - finance, trade and real estate. Some 60-80% of all investments in the country were concentrated there. It is irrelevant whether this is good or bad. The important issue is that these three sectors depend substantially on investments worldwide. Investments in the financial sector generally mean a transfer of money from foreign banks to their subsidiaries in Bulgaria. After that, this money is extended in the form of corporate, consumer and mortgage loans.

The offices and apartments which are being constructed and purchased just by these loans are the investments in real estate. The working capital of large commercial chains forms the investments in trade. Thus, all three sectors depend substantially on the availability of funding.

Raising funds was very easy before the crisis - through the stock exchange, the capital markets and the banks. The crisis cut this opportunities and, therefore, it was felt most strongly in these areas. Last year, investments in the finance sector in Bulgaria were the lowest since 2002, while in industry these remained relatively unchanged. Preliminary data shows that last year, foreign investments were in the range of €1.35 - 1.6 bn. Some €1.15 bn were made outside the finance sector, the real estate and trade branches but were made mainly in industry and in the energy branches. In previous years, funds allocated to these branches were still at the same level - about €1-1.5 bn. Of course, we must exclude the years of 2006 and 2007 when investments in industry, energy and telecommunications reached €2 - 2.5 bn.

- Can we talk about an investment restructuring in recent years?
- Indeed, there is such a process. In terms of absolute value, investments really declined from €6-7 bn in the best years to €1.35 - 1.6 bn in 2010. The crisis will redirect investments towards branches that are relatively stable such as industry and the energy sector.

- What is your comment on the official statistics? BNB announced that in January there was almost a 100% growth in investments, compared to the previous year.
- Last January, these stood at €57 mln and now they are €103 mln. This can only satisfy us but we must not forget that the comparison base is too low. The recovery started in November and December when a total of 40% of investments for the entire past year were made. Then, a total of €240 mln was invested in industry. A slight stir up was noticed in the finance sector as well. Investments in the last two months of the previous year there amounted to €165 mln.

- What do you think is the ideal investment?
- Appraisals are usually based on the amount of money which has entered the country and the number of new jobs which have been created. For that reason, for me, the ideal investment is the one that opens positions for highly-qualified specialists, such as Hewlett Packard and Liebherr, for example.

- Do you expect a redirection of investment flows because of the recent events in North Africa and Japan?
- We received several inquiries from companies which operated in North Africa on the opportunities to move to Bulgaria. Things are still at a very early stage and I cannot consider how many of these companies will decide to come here. The good thing is that we do not have a bad image but many companies simply do not know Bulgaria. Indeed, we have the lowest taxes in Europe, doing business here is relatively inexpensive but, in general, only we are the ones who know this, not companies worldwide.

- In this connection, are you planning any campaigns aimed at making the country more well known?
- By the middle of next month, I expect several public procurement contracts under the Operational Programme Competitiveness to be announced. One of these will be for the organising of presentations in a dozen countries over the next two years. We plan to promote the sectors in the country that are most favourable for foreign investments. We will organise various conferences in partnership with the world’s most prominent media. We will also announce a public procurement order for the drafting and issuing of new promotional materials because there is definitely a deficiency in this respect.

- Can we talk about a withdrawal on the part of foreign investors?
- I think this is no longer a matter of concern. It is normal for some global companies to sell their business. There is nothing bad in the fact that Italy's Enel is selling its units at the TPP (Thermal Power Plant) Maritsa - Iztok to an American company. It would be worrying if these facilities do not work. This topic was current last year when investments dramatically declined. But we believe that none of the large investors is leaving the country. Last year, a total of around 3,500 companies invested in Bulgaria or exported investments outside the country.

Прочети цялата новина

Свързани новини: