Wim Philippa: FDI to Enlarge in Bulgaria

Novinite Insider » INTERVIEW | March 16, 2006, Thursday // 00:00
Wim Philippa: FDI to Enlarge in Bulgaria Wim Philippa, Secretary General of The European Round Table of Industrialists. Photo by Yuliana Nikolova (Sofia News Agency)

In a face-to-face meeting with Bulgarian government this week the European Round Table (ERT) has communicated its views and opinions on the progress of reforms in Bulgaria.

When the club of the ERT was set up in 1983, those most powerful businessmen were seen as the New Knights of the Round Tab. Their own private club, where membership is personal, not corporate, has set themselves the task of dealing with this crisis of democracy.

The ERT's mission has remained constant since the present day - to strengthen the competitiveness of the European economy on the world stage.

The longer-term effects of enlargement on Bulgarian economy will largely depend on whether the government succeeds in implementing recent laws and fights effectively corruption, Wim Philippa told Ivelina Puhaleva, editor of Sofia News Agency. He has been Secretary General of The European Round Table of Industrialists since 1999.

Q: Coming here for seven years now, have you detected any major developments in Bulgaria?

A: The discussion that we are having with the government has become more and more constructive and open. If I look back seven years ago, they were distant, we were sitting opposite each other and it was a sort of government talk as if it reported.

Q: So, you have seen three governments changing ...

A: Yes, actually. The first one was really difficult - I did not get anything out of it. We simply used to talk to each other - and that was it, there was no connection. Here at least the government was open, listening, reacting normally and constructively. It was a sort of swing-swing situation, which was very positive.

Q: What kind of feedback do you expect? Do you maintain regular correspondence with Bulgarian government? Are you aware of the next steps the government would make?

A: Ideally, the constant representatives behind the ERT, the local representatives, continue the discussion with the government. And they are our interlocutors basically. So, we'd listen to them. And then once a year we could have that closer personal contact. But we do not intend to have contacts with all the governments - that'd not be fair, as we are not politicians.

Q: During this year's forum you have been focusing on the coming EU accession of Bulgaria. You are mostly interested in the way of implementing our new laws. Do you have any contact with European Commission experts coming here to review this progress? Do they seek the opinion of ERT?

A: We do know the people that are responsible within the Commission for Bulgaria. They can approach us, but it is not customary - there is no regular dialogue - between us and the Commission - on Bulgaria.

But internally, we have a working group dealing with enlargement {and neighbourhood policy} that reports back to us on progress - or non-progress - in Bulgaria.

Thus we discuss what possibly can be done to improve the situation. But there is certainly no regular dialogue between us and the Commission on how progress needs to be handled.

Q: Does it work in this manner?

A: I think so. Don't you think so? Now it was constructive, open, positive, not very diplomatic type of discussion that you could see everywhere in the world. So gradually we have built warmer feelings towards each other.

The government knows that we are here to work in the interest of the country. And that is on the cup of the positives.

Q: In your opinion what is the most attractive sector for foreign investments now, in Bulgaria?

A: It's a difficult question. Normally, we do not view the things in this light, because our companies come from all over the world. We see investments here in general.

Basically, the strength of the ERT is that we do not deal with sectoral issues - that is an issue on the agenda of employers' organisations, they deal with short-term policies, reaction to existing legislation, sectoral issues, while we are acting in a more pro-active way, very much horizontal, macro-economic. We use sectoral issues only as examples.

Q: Do the ERT organisations plan more investments in Bulgaria this year?

A: I'm pretty sure that individual member companies continue to invest in those areas where the investment climate is inviting.

Q: Are there members within your organisations that have shared fears that doing business here would become stricter once the country enters the EU?

A: I think, if you look at examples from the other 10 EU newcomers, you could see that those countries have benefited from more investments - in production, in R&D, in industrial activities - in a very positive way. I don't think you could indicate any country that would say it had benefited from the enlargement process.

Q: Did you address the Bulgarian government with any specific concerns - besides the more general ones of corruption, red-tape, intellectual property rights?

A: Yes, but they are very fundamental problems. A functional judiciary is very important for the foreign business coming here. The rate of tackling corruption is indicative for the desire of foreigners to invest as well.

Prior to meeting the government, we met with our local representatives, our local managers and they all give examples. Mr Janssen did not quote all those examples to the government {during the meeting}.

For instance, if you have ordered a container of goods and you have paid the VAT and you go to the harbour and try to pick up your container - but somebody tells you: "You have to submit a proof of this, and a proof of that ..." And it takes several days - while you pay for this time.

That is no more acceptable. You need to see progress in the enlargement process. Sometimes the paperwork is excessive.

Those are the things that we see here first and foremost and we just bundle them to get straight to the point: corruption, grey market, etc. But there is a lot behind them.

Q: Is the government aware of all those facts?

A: I think they are. If the government says: "our receipts from VAT are steadily increasing", it means something is increasingly working - but you still haven't solved the problem. It does take time; you cannot solve any of these problems overnight. It's impossible.

Eventually, we are after a possibility for the business within the ERT to have a regular dialogue - not once a year. This should give them the opportunity - not only at ministerial level - but within the ministry - to have a proper dialogue on a continuous basis, to filter specific concerns.

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