Deloitte Bulgaria Chairman: Bulgaria's Economy Has Potential
Novinite.com spoke with Vasko Raichev, Chairman of Deloitte Bulgaria.
He discussed the situation and perspectives for Bulgaria's economy and gave advice to the potential foreign investors.
How would you describe the current business situation in Bulgaria, compared to one year ago?
I wouldn't say there is considerable change. But it would be safe to say that the problems and the challenges are already defined. The uncertainty how they will evolve, how to be solved and in what time frame remains, but at least we know what the problems are. This is important, because part of the crisis is based in the fact that one doesn't know what exactly the problems are and how they will develop. I think that this clarity on the matter is the main change since last year.
Do you see any efforts towards the solving of the problems?
Yes, but one cannot say that there is a clear trend in that direction and we cannot guess when they will be solved.
But one of the positive things is that the bank credits are more readily available and they are more affordable. Maybe the interest rates are still not low enough, but some are already at the pre-crisis levels. It is totally another matter, that the banks are much more cautious and strict when considering the credit applications.
Are there any strong sides to Bulgaria's economy and what are they?
Of course there are. It has a lot of potential. Bulgaria is part of the “club of the rich”, even though it's the poorest member. It may not be good for the Bulgarians' living standard at this point, but there are lots of business opportunities.
Bulgaria can only grow. It may be slower than it could and than it should, but it will grow. The crisis affected Western Europe, which shrunk the markets and Bulgaria's exports suffered from this. If it were not for the crisis in the West, Bulgaria's economy would have grown much faster. But the country has potential to grow, however at a slower pace – mostly through export and foreign investments.
Another strong side of Bulgaria's economy, in my opinion, is that it is well structured. The price it paid with the bankruptcy of the banking sector in 1997 and the privatization, even the unsuccessful deals, paid off. Now the private sector is big, much bigger than in some other countries, and the big companies, who have clear strategies, are doing quite well.
Which sectors of Bulgaria's economy would be of interest to foreign investors?
I couldn't say with certainty, because it is a matter of investment strategies. But if we go back to what I said previously about Bulgaria's potential, I would say that it should be sought among the least developed sectors. For example, agriculture.
Don't you think that the debates about land ownership by foreign nationals would scare off the potential investors?
No. Such debates are happening all over the region and I don't think this would be an obstacle.
What advice would you give to the potential foreign investors?
I would advise them to come, to do a serious research and to exercise caution when evaluating the opportunities. In any case, when they have a long term project, the possibility of a good return on investment, is very big.
But he needs to seriously think over the business plan and consider a long term project. The moment is not right for short term investments.
It needs to be a long term strategic investment. Like for example the recent purchase of one of Bulgaria's telecoms by a large first class strategic European investor.
By long term I mean 10 years and onward. Because Bulgaria has potential for good return but only over a longer period of time.
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