Банкеръ Weekly

Briefs

WE ARE A BRIDGE BETWEEN GERMAN AND BULGARIAN COMPANIES

Mitko Vassilev, Head of the Representative Office of German Economy in Bulgaria, to the BANKER WeeklyMr. Vassilev, the Representative Office of German Economy in Bulgaria has been operating for ten years now. What happened within that period?- The Representative Office was opened on March 2, 1993 and for a decade now has been protecting in Bulgaria the interests of a total of 82 chambers of commerce and industry from the German Federal Republic. I have to note that in Germany the companies are obliged by law to be members of chambers. They are united in the German Commercial and Industrial Union, which has 117 bureaus all over the world.According to data of the German statistics, about 1,200 German companies are currently operating in our country, and a total of 4,500 declare that they maintain some kind of contacts with Bulgarian partners.Do you think that the German investors are acquainted with the conditions for making business in Bulgaria?- Definitely, yes. Three comprehensive surveys among German businessmen were made. The first one was in 1996, the second - three years later, and the last - in 2001. They clearly outlined the motives of German businessmen for investing in Bulgaria. However, I would like to mention the hindrances pointed out by them. Initially, these were the inflation and criminality. They were followed by bureaucratic procedures and corruption. Problems connected with the numerous licensing regimes and the slow court procedures came next. The low solvency of Bulgarian citizens is still a serious impediment. German companies still face difficulties with the tax authorities and customs in our country. However, when they have problems with the Bulgarian administration we intervene in order to solve them. Are the above-mentioned hindrances the cause for the reflux of German direct investments over the last two years?- They are hardly the only reason. You know that there is a worsening in the economic medium as a whole and investments are decreasing not only in our country, but in the entire region. However, we should be are glad that with a few exceptions Germany has been almost continuously the leading investor in Bulgaria over the last ten years. According to the Foreign Investment Agency, a total of USD4.8BN was invested in Bulgaria in the 1992-2002 period. USD595MN of that amount were German investments. Thus, Germany keeps its leadership. The names of big German investors, well-known to the general public, include: METRO, Heidelberger Zement, Liebher, WAZ, Ytong, Willi Betz, etc.Statistics show an increase in the bilateral commercial exchange, but for several years Bulgaria's imports from Germany have been higher than our exports to that country. Do you think that the deficit for Bulgaria in the trade balance could be overcome? - Things regarding the turnover of goods are definitely good. An absolute record was marked in 2001 when bilateral trade was worth DEM3.4BN (around EUR1.7BN). Although we do not have conclusive data about last year, I dare to say that this achievement will be improved. The bad thing for Bulgaria is its continuous trade deficit in the commercial exchange with Germany over the last ten years. However, it is hopeful that Bulgarian companies' exports to Germany increased by some 10% in the first eleven months of 2002. Traditionally, textiles and foodstuffs are the most exported Bulgarian commodities to the German market, while the German companies are most successful in selling automobiles and machines in Bulgaria.

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