Банкеръ Weekly

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YOU COULD ATTRACT MUCH MORE INVESTORS

Jeno Faller, Owner and Managing Director of Faller Faller Consulting, to the BANKER weeklyHungary's President Ferenz Madl and Premier Viktor Orban are opening on November 9 in Budapest the 25thq European Conference of the Tripartite Commission. The forum is devoted to the enlargement of the European Union and will be attended by Bulgarian PM Simeon Saxe-Coburg-Gotha as well.The Tripartite Commission was set up in 1973 by Europe, North America, and Japan to promote cooperation betweene these industrial regions of the world. More than 350 famous leaders from the spheres of business, public administration, media, academic circles, syndicates, and NGOs, are its members.The address of the Bulgarian Premier at the Conference will be titles: Bulgaria's Future in the Enlarged European Union.The BANKER weekly asked the opinion of another participant in the forum - the Hungarian businessman Jeno Faller - on the opportunities for business and investments in Bulgaria.Jeno Faller is a lawyer and businessman. He graduated in international law from the Institute of International Relations in Moscow, and later on specialized in buisness administration in Toronto. He is the owner of the consulting company Faller Faller. Before that he was a managing partner in Sarlos and Partners and in the Central euroepan Corporation for Development. He was in the managerial teams of a number of companies, among them: Budapest Communications, CD - Hungary, Nova Papir, and Tejholtz. Mr. Faller, what are the possible directions for the development of business relations between our countries, according to you?- Every political visit strengthens the business relations between two countries. In addition, the bilateral economic relations between Bulgaria and Hungary have been traditionally good. I believe that the Hungarian experience in the fields of international investment, privatisation, acquisition, building commercial partnerships, guiding multinational companies is such a valuable asset, which could be successfully applied in Bulgaria as well.The interest of which international banks and companies do you represent in Hungary?- Currently, we mainly represent the interests of German, Italian, Canadian, French companies and Austrian, German banks. However, I would not like to name any of them right know, as I do not want to use this interview for commercial purposes. Besides, consulting services are discreet in nature. Among other things, I am working currently on a method how to hand over the Hungarian bank privatisation experience to the largest commercial bank in Bulgaria, DSK Bank. We would like to bring in most probably German and Austrian investors and become advisors to the bank's management.Did the privatisation of Hungarian banks justify the expectations of investors?- The two-tier banking system in Hungary was set up in the end of the 1980s and the beginning of the 1990s. The majority of the leading European and American banks stepped onto the Hungarian market soon after. Other institutional investors, such as teh European Bank for Reconstruction and Development and Western investment funds also took part in the privatisation of credit institutions in Hungary. As a result of the privatisation process, very few banks remained remained in Hungarian hands, which is quite unique in Europe. Regarding the expectatiosn of the Hungarians, we could conclude that they find the current situation more than satisfactory. The competition between the banks - each bank specializing in different services, the increase of the quality of service, the decline of loans' interest rate and the increase of deposits' interest rate all led to the comfort and gratification of consumers.How much are foreign investments in Hungary this year and which measures have been decisive for attracting foreign capital?- In the first half of 2001 Hungary attracted EUR1,152MN in foreign direct investments, more thamn 40% up from the same period of last year. The sophisticated assemblage of car components, the creation of modern electricity power stations, further investments to the pharmaceutical industry and into other specialized activities are the most common areas of investments these days.There is an impression that you work with famous French and German companies from strategic sectors: the military, aviation, and space industry, and power engineering. Some of your partners, such as Kloekner and Framatom, have already stepped onto the Bulgarian market. In that respect, which spheres of Bulgaria's economy are most attractive for the foreign business?- Well, power engineering and the pearls in the crown, such as Bulgartabac, the Bulgarian Telecommunications Company, DSK Bank, the Minitary-Industrial Complex, Agrocomplect, etc. There are also Hungarian investors interested, but the Hungarian involvement would be mainly advisory; assistance in bridging the gap between Bulgaria and the EU countries by sharing our experience and knowledge through the Hungarian example. How do you appreciate the efforts of the Bulgarian Government to improve the business climate in the country? - Bulgaria has concluded significant economic reforms, the privatisation process has started, most of the multinational companies, foreign banks, international legal and auditing firms are present in your country. We have heard about the Bulgarian Government's new economic programme and we have great expectations related to it, especially regarding the improvement of the administrative capacities and the fight against corruption and against old fashioned Communist-type bureaucracy. For example, sometimes it is still difficult to get answers to our letters or arrange an appointment.I believe that Bulgaria has the capacity and conditions to attract more foreign investors. The country has a very talented population with long historical traditions and a well functioning market economy. So, it can become a leading example in the region. The Government (some of its high ranking officials studied at Hungarian universities of economics; thus, they are aware of the whole process over here) has to state clearly its support for foreign capital, contemplate various incentives and possibly centralize the different privatisation issues.

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