Piet Steel: Business Environment has Considerably Improved in Bulgaria
Mr. Steel answered questions of Martina Iovcheva
Q: What will be the top issues that will be addressed during this year's meeting of the European Roundtable of Industrialists in Sofia?
A: Again, as we have been doing since 1999, when a high-level ERT delegation came to Sofia for the first time, we will have a dialogue with the Bulgarian Government on the general business and investment climate in the country. We will make, if possible, a joint assessment. Is there progress? What has the Government done to attract more foreign investment? Has the business climate improved? Is business sufficiently consulted on draft legislation? Etc...
Q: What do you expect to be the results from this year's meeting?
A: Obviously, I cannot predict the outcome of our meeting, but we hope to be able to acknowledge progress in different fields that, eventually, must lead to a more business friendly environment in Bulgaria.
Q: Do you think the situation in Bulgaria has significantly changed since the meeting of ERT in September last year? If yes, in what way?
A: What I hear from my business colleagues in Bulgaria is certainly promising. The Simeon II government is showing a great openness towards and a willingness to talk with the business community. It has thus far demonstrated good will and good intentions to be "pro-business" and "pro-investment". It has done something unique - which no previous government had done to date - the establishment of The Council for Economic Growth, meeting weekly to provide two way-feedback on key priorities facing the Bulgarian economy, business and government. To a certain extent, the ERT could help the CEG on prioritising the main issues facing investors and business.
Q: The European Roundtable of Industrialists is one of the strongest backers of EU enlargement to the east. How do you lobby for Bulgaria's EU accession?
A: ERT is very much in favour of enlargement and has never refrained to exert pressure on the European political decision-makers to ensure that Bulgaria is treated on an equal footing with other applicant countries. However, it is a fact that initially Bulgaria in its quest for membership had considerable handicaps to overcome: political, administrative, financial, economic, etc... Bulgaria today has gone a long way in reforming its economy and administration in order to be ready to join the EU at an early date. I think Bulgaria is now very much on track to join the EU at the latest in 2007. ERT will continue to put pressure on the EU in favour of Bulgaria's early accession.
Q: How would you assess the business environment in Bulgaria today? What are its weakest points?
A: As I said, the business environment has considerably improved in Bulgaria. But structural reforms are a long and continuous process. A revision of the commercial law is long overdue, allowing companies to recover bad debt faster and settle commercial legal disputes faster and enforce court decisions. This is still not happening today. Bulgaria urgently needs to reduce the number of licensing regimes, a real barrier to the development of small enterprises. Bulgaria needs continued custom reforms to combat illegal traffic. Business needs lower taxes as a way to further stimulate economic growth. It must continue the fight against corruption and organised crime. Again, many good ideas have been presented by the government which, however, is often unable to deliver. I think the Prime Minister has still time to hold his promise of "a better Bulgaria for the Bulgarians in 800 days". But no further time should be wasted.
Q: Do you think there is a working market economy in Bulgaria?
A: Yes, I share here the official opinion of the European Commission. A working market economy is an essential condition to become member of the EU. I refer here to the so-called Copenhagen criteria.
Q: How does the business enlargement council in Bulgaria work for the promotion of our country to foreign investors? What are the tangible results from its work?
A: The ERT had been instrumental in creating a favourable opinion towards Bulgaria in Brussels. It has also advised the government on crucial questions related to the investment climate. The positive developments I mentioned earlier are also the fruit of ERT's work in Bulgaria.
Q: What would you advise Bulgaria's top economists to do in order to improve the business environment for foreign investors?
A: Bulgaria needs to work on its infrastructure: transport, roads, telecommunications, services. Greenfield investors need state-of-the-art infrastructure, the hardware and the soft ware. Both have to be present, if not they start with a serious handicap.
Q: What do you think are Bulgaria's advantages compared to the other countries in the region?
A: Its geographical location, its highly educated people, its language skills, its openness.
Q: When do you think the country will be fully integrated economically in the European Union?
A: This will take at least two generations. It could go faster, but that will depend on the money Brussels makes available and on Bulgaria's success in transforming the country into a competitive, effective and innovative economy.
Q: What are the three top advantages for foreign direct investment in the region for the West?
A: human resources, Bulgaria's location, political and economic stability.
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