Anniversary Forum Outlines Global Trends in Policy and Economy
U.S. companies Invest USD 3 billion in Bulgaria for 15 years
The American Chamber of Commerce in Bulgaria celebrated its 15th anniversary in May, 2010 with a reception for US and EU ambassadors on May 26th, followed on the next day by a commemorative conference, a symphony concert and a closing reception. Widely known as Amcham, the organization was recognized as one of the leading business organizations in the country and not only – AmCham Bulgaria has been repeatedly singled out as one of the best AmChams anywhere in Europe.
Established in December 1994 and registered by Sofia City Court in March 1995, Amcham Bulgaria was admitted to the European Council of the American Chambers of Commerce in May 1995 and became an official affiliate of the US Chambers of Commerce in June 1995.
It now has more than 300 American, Bulgarian and international companies operating in the country, which collectively produce more than half of the Bulgarian gross domestic product. In 2007, it facilitated the negotiations on the treaty for avoidance of double taxation between the US and Bulgaria.
Amcham received congratulatory addresses by Prime Minister Boiko Borissov and US secretary of commerce Gary Locke, as well as former diplomatic staff stationed in Sofia in the past, including Nancy McEldowney, now principle deputy assistant secretary in the US state department, Alexander Karagiannis, now director for Central Europe at the US state department, and John Beyrle, now US ambassador in Moscow.
The Prime Minister Boiko Borissov congratulated the chamber and its members for their fruitful work at home. In his address he pointed out that it is especially important when we all strive to overcome the effects of global crisis and growth of the economy.
US secretary of commerce Gary Locke sent a letter to the chamber saying that Bulgaria's AmCham has compiled an impressive record of achievement.
“You have been a tireless advocate for many important bilateral issues, most recently the signing of the U.S.-Bulgaria Double Taxation Treaty. We applaud your efforts to increase transparency in the Bulgarian business environment and your commitment to corporate social responsibility, both key elements of a successful economy.”
In his letter to the chamber the US Ambassador to Bulgaria James Warlick stated it is amazing that an organization of only 15 years has achieved major accolades, such as being voted the best AmCham in Europe.
“I am confident you will continue to reach new heights and that our partnership will continue to strengthen and prosper in the future.”
In his address to the members the Amcham president Anthony Hassiotis pointed out the expansion and growth of the US business that has been greatly supported and assisted by AmCham Bulgaria.
“2006 turned out to be a momentous year for Bulgaria, springtime for US-Bulgaria economic relations. The year marked a remarkable surge in US investors interest and a series of major American investments in country.”
Five Cabinet ministers attended the Amcham conference on Bulgaria's role in the US-EU Transatlantic partnership held on May 27th, including Foreign Minister Nikolai Mladenov, Economy Minister Traicho Traikov, Regional Development Minister and former Amcham board member Rossen Plevneliev, Labour Minister Totyu Mladenov and Minister for EU Funds Tomislav Donchev.
Bulgaria is a strong partner of the USA in NATO as well as a full member of the EU. Bulgaria is becoming an even more attractive destination for investments. This is what the president of the American Chamber of Commerce in Bulgaria, Mr. Anthony Hassiotis, said during the conference.
In the past 15 years, US companies have invested a total of USD 3 billion in Bulgaria. The low tax rates, the cheap and qualified workers, the opportunities for investments in the energy sector and information technologies, as well as Bulgaria’s membership in the EU, are among the major attractions of the country.
“The trade relations between the USA and Bulgaria have a very important place. After Bulgaria’s accession to the EU, we witnessed an increase in the trade turnover”, said the Deputy Assistant Secretary for Europe of the USA Juan Verde. The bilateral economic and trade relations between US and European Union countries account for 55% of the world GDP, Mr. Verde said. For the last 8 years the US investments across the ocean doubled. Our ultimate goal is to create free trade across the Atlantic by removing the trade barriers, the diplomat further said. He advised to focus on issues that have to be resolved in the near future: green technologies, nanotechnologies, and development of global standards. Deputy Assistant Secretary for Europe stated that in the next 12 months his department will work to create new areas of cooperation between Bulgaria and the US. He stressed that the trade relations between US and Bulgaria are extremely important. “More EU trade does not mean less US trade”, he said.
According to the Minister of Economy, Energy and Tourism Traicho Traikov, Bulgaria as a full EU member has its contribution to the Transatlantic Economic Council. “Europe and the USA are not the only players on the economic arena, that is why we need to work with joint efforts”, Minister Traikov added.
In the words of the minister the strategic goal of the ministry is to stress more the innovation sectors and that is why we would like to work primarily with the Unites States. “Israel is a specific focus for us as well, and we are cooperating with the authorities responsible for innovations.” Mr. Traikov added that despite the fact Bulgaria is affected by the global crisis there are a number of competitive advantages that were recognized in recent analyses. The latter put Bulgaria on a higher level among attractive investment destinations, the minister said.
The US deputy ambassador to Bulgaria, Mrs. Susan Sutton, pointed out that the supremacy of the law was the main factor in making profitable business in Bulgaria. She also said that the US relied on working with Bulgaria on important issues such as the international agreements on climate changes. Regarding the energy sector, she said that there were several short-term steps that Bulgaria could take to increase transparency and variety of investment sources.
Bulgaria will profit from opening its markets to foreign partners and reducing the existing administrative obstacles, Bulgaria’s Foreign Minister Nikolay Mladenov said. Apart from the EU, NATO and Russia, he listed three regions as being of key importance to Bulgarian foreign trade.
Bulgaria's Regional Minister, Rosen Plevneliev said that in times of crisis it is useful to rely on the US experience that shows the road ahead: development of hi technologies and energy projects in Bulgaria. In his words the country could become a hub of energy.
On a separate topic raised by the media Rosen Plevneliev commented that the replacement of the current road vignettes with electronic passes will increase revenues from road taxes. Bulgaria's road vignettes will be replaced by 2013 with electronic toll system. A working group will prepare the parameters of the electronic system in the next six months, and the decision of the Council of Ministers will be made then, but the entire process will require at least three years.
The Minister pointed out the system would not lead to increased fees for drivers and stressed on the experience of other countries, such as Germany, where electronic toll systems have increased revenues from road taxes up to seven times.
The system in Bulgaria will include the so-called electronic passes and traffic monitoring through GPS devices. Once in place, the system will allow those who travel less to pay less in road fees. The investment cost remains unclear, but one plan includes the option where expenses will be undertaken by investors against a promised future concession.
The construction of Lot 2 of Trakia highway had already begun on May 31, and it would create three thousand jobs. Together with the other two lots of Trakia about ten thousand jobs will be created.
The minister hoped the construction of the section of the Trakia, including Lot 3 (also 32 km) start on August 2 and Lot 4, which is the biggest - 42 miles to begin on October 2, said Plevneliev. I hope the end of 2012 Trakia highway to be ready, he said.
In the deepest economic crisis, the government gives priority to infrastructure construction and already has over 80 km highways. Highway Lyulin is 19.2 km. The Lyulin Highway will be ready by May 15, 2011, making it Bulgaria’s first completed highway, promised Regional Development Minister Rosen Plevneliev. The 19-km Lyulin Highway is supposed to connect the Bulgarian capital Sofia with the Daskalovo road intersection near Pernik to the west, which will be starting point of the future Struma Highway connecting Sofia with Kulata on the Greek border.
The construction of motorway Maritsa (67 km) goes around the clock, said the minister. Maritsa connects Trakiya highway with Cap. Andreevo border checkpoint with Turkey.
During the forum was debated to what extent Bulgaria absorbs funds allocated under the EU operational programs. Currently about 30% of the money have been negotiated that makes 5 billion BGN and just under 5% have been paid off (1,5 billion BGN), said Tomislav Donchev, Minister of EU funds.
Under the seven EU operational programs Bulgaria must absorb a total of 6.7 billion EUR by 2013. Public procurement contracts remain a major problem in performing projects financed with European funds, the minister said.
"Part of the proposed changes to the law on public procurement bother us because they introduce participants who can appeal procedures," added Donchev. He hopes to improve performance of public procurement and to increase control over their implementation. Donchev proposed to cut administrative procedures for applicants implementing the projects financed with European funds, similar to the benefits that investors use a certificate for Class A.
Borislav Dimitrov, General Manager, Sisco Systems Bulgaria elaborated on the future of IT sector in Bulgaria referring to the recently adopted Digital Agenda for Europe, the first flagship initiative under the EU2020 strategy for smart, sustainable and inclusive growth. The goal for Europe is sustainable economic growth through ultra fast Internet, Dimitrov pointed out.
2020 target is internet speeds of 30 Mbps or above for all European citizens, with half European households subscribing to connections of 100Mbps or higher. Today only 1% of Europeans have a fast fibre-based internet connection, compared to 12% of Japanese and 15% of South Koreans.
Very fast internet is essential for the economy to grow strongly, to create jobs and prosperity, and to ensure citizens can access the content and services they want. 5% of GDP in Europe comes from the ICT sector, said Dimitrov.
AmCham thanks all the supporters and contributors who made the 15-th anniversary events possible:
America for Bulgaria Foundation
Cisco Systems Bulgaria
Eurobank EFG Bulgaria
ITT Electronic Systems
Sheraton Sofia Hotel Balkan
Astra Zeneca UK
Citi University of Seattle
Coca-Cola HBC Bulgaria
Ernst & Young Bulgaria
Domaine Boyar International
The Coca-Cola Company Bulgaria
Bulgarian VIP Travel