Economy to attract EUR 5.5 billion for 2007
In the 2004 – 2006 period, Bulgaria reached the prestigious seventh place in the world in terms of attracted investments, in proportion to the gross domestic product (GDP), as compared to its 92nd spot in 1990-1992. Bulgarian economy was preferred to many leading European countries, thus occupying third place behind Luxemburg and Iceland for the last year. This is what the regular annual report on investments of the United Nations Conference on Trade and Development (UNCTD) shows, analyzing the situation in 141 countries.
For six years in a row, the influx of direct investments to Bulgaria, Russia, Romania, Kazakhstan and Ukraine has been growing, with a 68% increase during the past year. These five countries have attracted a total of 82 per cent of foreign investments in Central and Eastern Europe, said Lene Jespersen, acting permanent UNDP representative to Bulgaria. Record levels of attracted capitals have been registered worldwide as well. According to the UNCTD report, the global influx of direct foreign investments during the last year has been in the amount of USD 1.306 billion, thus approximating the 2000 record. Compared to 2005. such investments have grown by 38 per cent.
The Bulgarian Investment Agency has forecasted a continuing growth of investments in the year 2007, as well, and they are expected to reach EUR 5.5 billion. According to BNB data, for the past eight months of the year, direct investments amount to EUR 3.4 billion, with EUR 700 million having entered the country in the month of August alone, recalled Mr. Dimitar Nikolov, deputy head of the investment agency. The problem is that only 25 per cent of those are in production, while the real estate business has attracted 35 per cent of foreign capital.
In order to hold foreign investors interest, Bulgaria must initiate the promised reform in the public sector, the way it was done by the private sector, explained Mr. Ivo Prokopiev, chairman of the Confederation of Employers and Industrialists in Bulgaria. In his opinion, urgent measures are needed for optimizing education and for making the necessary reductions in the state administration. Low taxes and a stable fiscal policy are the other advantages of economy, which is why the confederation will propose that social security contributions for the next year be reduced by another 3%.
In addition to the influx of investments, the business must also strive towards a more active export of capital to neighboring countries, Mr. Prokopiev went on to say. The establishment of a network of bilateral conventions on avoidance of double taxation will ensure zero taxation on dividends, interest and capital profit from other countries to Bulgaria. Such conventions may be concluded first with Ukraine and Russia and later with other countries, too. Currently, there are about 10 national champions with business exported abroad, however this process could be made more active, the confederation chairman believes.
