Dr Bela Kolozsi has been Ambassador of the Republic of Hungary to Bulgaria since 2000. He graduated in medicine and continued his education with sociology and philosophy. He started his career as a diplomat in 1992 at the Foreign Ministry. Speaks French, English and German.
H.E Bela Kolozsi met Milena Hristova - Editor of novinite.com and The News.
Excerpts:
Q: What was Hungary's formula for attracting more foreign investments? Can it be applied in Bulgaria?
A: The explanation for Hungary's very good position with regard to foreign investments can be found in the last decades. Following the Revolution in 1956 the Communist strategy gave more freedom to Hungary, prompted by apprehensions of other such events. That's the reason why foreign investors were allowed to come to Hungary as early as the '70s. Legislative regulations were passed in 1972, which though restricting investments to a certain extent, gave them enough freedom. In 1988 the law provided for the complete freedom of foreign investors. Hungary managed to open its markets at a very favourable moment when the competition was not that tough. Besides that, Hungary's geographical location was and is a condition for very close ties with Western Europe. Following the changes, new economic forms were introduced, such as the industrial parks, green light was given to the so-called "greenland investments", foreign investors were provided with tax reliefs. We did not think about whether this could lead to a buy-out of the country or nor, we just took the risk. Hungary's accession to NATO gave the country more political stability, the old communist bureaucracy was pushed into the background, and corruption was limited.
In my opinion Bulgaria may follow these same roads, but somehow the pace in Bulgaria was slowed down. The conflicts on the Balkans, from a political and geographical point of view, closed Bulgaria to the world. Currently however this is not a problem that Bulgaria faces and I think the country will manage to benefit from this. Bulgaria is more politically stable than before and this stability will be strengthened after its expected NATO entry. These are very promising signs but in order to succeed Bulgaria must be competitive.
Q: Are Hungarian entrepreneurs interested in the privatization process in Bulgaria?
Only big multinational companies can be competitive enough in today's globalized world. Hungary's economy made some considerable progress for the last few years and it may well participate in Bulgaria's privatization process though with humble investments. Hungary's investments were focused primarily on neighboring countries, all the more so that many Hungarians live there. Among them are businessmen, who have the necessary contacts and approach the deals with trust. Hungary is constantly expanding the range of its investments. Hungary's telecoms operator MATAV invested in Macedonia, another company acquired the DZU company in the town of Stara Zagora, which is the biggest Hungarian investment in Bulgaria. Unfortunately there are some administrative problems, which stand in the way of this investment. Hungary's State Savings Bank is also interested in the banking sector. Hungary shows interest in privatization deals along the Black Sea coast and hotels. Our Embassy tries to mediate this interest to Bulgaria.
Q: What would you advise the Bulgarian government bearing in mind Hungary's experience in the privatization process?
A: The government knows the local conditions much better than any foreign diplomat. What we can do is share the experience we have accumulated so far with the Bulgarian side. In Hungary it was of crucial importance that we took the risk to attract foreign investments trying to re-create the conditions of the international market environment. Another risk was the decision to allow foreign investors to export the profit they make. The foreign capital that flowed into the country to a certain extent strengthened the Hungarian capital. All the reliefs that we gave foreign investors also turned out to be very important.
Q: Hungary went through many difficulties on its way to a functioning market economy. What are the similarities and differences in the problems Bulgaria is currently facing?
A: In my opinion Bulgaria and Hungary started off in very different ways. As I already mentioned Hungary had the opportunity to lay the groundwork of the market economy even before the collapse of communism. The other crucial difference is that Bulgaria opted for the so-called bond privatisation. There is something very appealing in this kind of privatization from the point of view of justice. But in fact it is not capable of attracting big foreign investors. These are serious differences and I think Hungary only benefited from this strategy. Recently more and more similarities in the strategies of the two countries can be seen in building a functioning market economy. Bulgaria and Hungary try to catch the tendencies dictated by the international market economy. Our efforts to protect our economy are in vain, sincer this could only make it "complacent". So we'd better encourage its competitiveness.
Q: The revival of which sector do you think will boost most Bulgaria's economic development?
A: I suppose Bulgarian economists themselves are divided in their opinion on that issue and it is very difficult to give a simple answer to such a question. We think that Bulgaria has tremendous potential for developing its tourism, especially in attracting foreign tourists. Great opportunities are provided by the seaside tourism and the winter tourism. Viewing the issue on a global scale long-distance travels are already on the slide out of security concerns and Bulgaria can take advantage of that and attract more European tourists, Russians and Eastern Europeans in particular. In this respect Hungary is making efforts for the further development of bilateral relations with many countries.
Q: Hungary has always been associated more with the Western than the Eastern part of Europe. What should be changed so that Bulgarians too have the self-confidence of Europeans?
A: Europe can be viewed on a small and a large scale, which is imposed to a certain extent by the European Union. Many people called Europe the European Union or vice versa. But I would advise against the adoption of such terminology because in this way we isolate ourselves. Every nation has its stereotypes and may be it is because of the predominant religion in Bulgaria that it is perceived mainly as an Eastern country. But the more time I spend here the more I realize how many things link Bulgaria to the West. In think Bulgaria, as well as Hungary, can play a very significant role as mediator between the East and the West. The European Union will be a world force and we will be part of it.
Q: EU and NATO accession are main priorities of Bulgaria's foreign policy. Do you think Bulgaria has big chances of being invited at the NATO summit in Prague?
A: As a member of NATO Hungary has the right to express an opinion and Hungary has vowed to exercise its right in favor of Bulgaria. Initially we stressed that we want to support Bulgaria's preparation for NATO entry. In this respect Bulgaria made a considerable progress and we will support Bulgaria at the Prague summit as well. Enhancing stability in the region is also in the interest of NATO.
Q: How would you describe Bulgaria in three words?
A: Past, present and future.
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