Bulgarian Minister of Economy on Aerospace, Automotive and Legal Reforms

Bulgarian Minister of Economy: Mr. Bojidar Loukarsky

 

What sectors do you think offer near-term opportunities to American investors?

I’ll be precise; transportation, infrastructure, IT and energy. These sectors are mentioned based on several meetings we’ve held with various business, institutions and so forth, who have expressed interest or advice in regards to these. I’d like to also mention industrial manufacturing, retail, mining, financial intermediaries and property.

Specifically, I’d like to point out the interest of foreign investors in the automotive and aerospace industries. These sectors have some strong companies already operating successfully such as Lufthansa Technik. This is a foreign firm [German] operating here in Bulgaria that should present as an excellent example for similar American firms looking for a skilled and cost-effective labor market in the EU. I had a recent conversation with a friend where we discussed the potential of companies like Boeing and Airbus entering our market which represents an ideal scenario for them as well as the people of Bulgaria. Additionally, we have several European car manufacturers operating in Bulgaria that specialize in the production of spare automotive parts. I’d point out WITTE Automotive, a car component manufacturer that is currently expanding their operations in the market and BHTC, who have a plant just outside Sofia where they manufacture air conditioning components for large brand names.

I mentioned earlier the IT sector. We have great brand names operating here such as HP, Cisco, VMware, just to name a few. Aside from these hard investments from American firms we’ve recently seen an acquisition of a Bulgarian software firm, Telerik, by American company Progress Software, for the incredible sum of $265.5m. Ultimately, these examples are meant to illustrate the strong history of American and Western firms operating successfully in Bulgaria.

There is also the Stara Zagora airport which needs restructuring. This is a great investment opportunity.

In regards to manufacturing industries; do you offer any incentives or economic zones that cater to these desired investors?

Yes. The industrial zones are headed by the National Company Industrial Zones (NCIZ) and fall within the control of the Ministry of Economy. There are many throughout the country.

Ok, which municipalities are best suited for automotive parts producers?

In regards to the companies I spoke about, there is Bozhurishte Zone just outside Sofia and one located conveniently on the Danube River in Ruse where WITTE Automotive is located. You can find more of these all over, including the seaside, which provides an additional mode of transportation via the Black Sea, especially in Burgas.

Are there zones that service other industries?

We are currently working on the Sofia Tech Park. Upon its completion it will be the largest technological and innovation center in the Balkans. It’s an EU Operational Program and one that I think shows our dedication to innovation and overall economic development.

Earlier there was mention of an acquisition of a Bulgarian tech firm by an American company. Are there any other specific examples of Bulgarian firms that may act as strong partners for US firms?

I can’t speak to the details of partnerships; however, one firm that is of a US standard and operating successfully in the US and indeed, globally, is Walltopia who build climbing walls.

Absolutely, Walltopia represents the entrepreneurial spirit of Bulgarians.

One of my key priorities is nurturing the development of these types of innovative firms and letting them know they have our support. One way in which we aim to support this, and the responsibility does not fall solely within the Ministry of Economy, is developing a specific legal framework that is conducive to the development of innovative ideas from productive companies. In general, however, the government needs, and is working towards, major reforms in many different areas to further align ourselves with our EU counterparts. We need to harmonize not only with those external counterparts but also ensuring our laws offer internal equality as foreigners feel negatively towards the fact that not all companies are always treated equally. Due to these necessities business legal reforms are the very first thing we are working on in my mandate.

 

One of my key priorities is nurturing the development of innovative firms and letting them know they have our support. One way in which we aim to support this, and the responsibility does not fall solely within the Ministry of Economy, is developing a specific legal framework that is conducive to the development of innovative ideas from productive companies.

 

That is extremely promising to hear. I am sure that your status as a former attorney has aided in the serious implementation of these reforms. What else are you working on to secure a better business environment?

There are a number of items in terms of investment promotion that need to be adjusted. Another top priority is maximizing the efficiency and reducing the burden on companies and SMEs through our public administration. We also intend to reduce the amount of institutions a company must pass through in order to obtain necessary documents, licenses, etc. The elephant in the room is the perception of corruption which definitely puts-off investors; we need to address this in no small form. Finally, the revolving changes in government are outputting as well.

How do you plan to tackle the actual implementation of all these great ideas?

With our coalition members we have already identified specific actions we will be pursuing and of course this planning is done as much in the short term as it is in the long term. In order to increase transparency we are steadfast in creating an electronic procurement platform which will occur within 2015. Also, to address the administrative burdens investors and SMEs face, we are working on an e-administration platform. This includes the electronic submission of evaluation plans for various projects that are being reviewed under the Operational Program “Innovation and Competitiveness” which all fall within our ministry.

An exciting new initiative is a plan to stimulate the creation of so-called ‘clusters’ of SMEs which would allow them greater access to markets outside the EU; especially in the US where Bulgarian products have a long tradition.

Indeed, I am from Chicago where a lot of Bulgarians immigrated to.

Yes, I am aware of their work which focuses on cargo and transportation in the northern part of the States.

You have a lot of specific goals in regards to incentives, reforms and the like. How much has the separation of the former Ministry of Economy, Energy and Tourism into three individual ministries aided in your ability to act more concisely?

It was a great decision to separate the three and was done so in large part due to the issues we are facing in our energy sector. We needed a singular focus on this sector and no single person can handle the daily job of these three very important ministries.  Further confirming this notion is that I actually spoke with my four predecessors who universally agreed that the challenge of managing all three reduced their capability to be as effective as possible. [cordially stating] In fact, all of them stated they are a bit jealous of me now because I can focus my energies solely on the economy.

I should point out that tourism is a traditional part of the Bulgarian economy and the separation of that ministry will serve our country quite nicely. Particularly, this ministry was created at the request of companies within the sector.

 

Another top priority is maximizing the efficiency and reducing the burden on companies and SMEs through our public administration. We also intend to reduce the amount of institutions a company must pass through in order to obtain necessary documents, licenses, etc. 

 

You, as well as DPM Donchev and several other Bulgarian officials are making many trips up to Brussels following the new government’s formation just a few weeks ago [11/2014]. Is the EC on team Bulgaria?

Since the government’s formation we have been given indications that the EU is behind us. I think they are beginning to perceive us as acountry with full-rights to membership and they are listening to us. One indicator of this mounting trust is a Bulgarian who acts as the European Commissioner for Budget and Human Resources, Mrs. Kristalina Georgieva.

Another good sign that PM Borisov and his Deputies received upon their visit to Brussels last week was a positive indicator regarding eventually Schengen membership. It is our obligation and desire to be an active and constructive member in the negotiations until we are fully acknowledge.

Maybe you’ve already stated this; however, it is important we ask: What is the ideal American company you’d like to see in Bulgaria?

Boeing. But in general, all export oriented, added-value producers are desired.

The Stara Zagora airport, energy, transportation and so forth all represent some of the largest potential you are speaking of. The nature of these opportunities tend to be tied to the public sector; so it’s safe to say many of these investments will be won through tender?

It is the case, indeed.

Personal Message: Come to Bulgaria, it’s a proven investment destination and becoming an even better place to invest.

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