‘FDI is up’

‘FDI is up’

Against previous gloomy figures about a downturn in foreign direct investment (FDI) in Bulgaria and independent commentary on the country slipping badly in job creation, senior Government officials are insisting that FDI is increasing and that they are preparing to campaign for more.In May, official figures showed that FDI in Bulgaria in the first quarter of 2010 came in at minus 21.9 million euro, a major decrease compared to FDI in Q1 2009, which was 926 million euro.A report released at the start of June by Ernst & Young said that investments in Bulgaria in 2009 had halved from a year earlier, and in 2009 Bulgaria slipped to 19th place in job creation in Europe, from eighth a year earlier. According to Ernst & Young, investors were losing interest in Central and Eastern Europe and shifting their capital to the developed economies in the West.But, speaking on June 7, InvestBulgaria agency chief Borislav Stefanov said that the number of firms that had invested in Bulgaria in Q1 2010 in fact had increased. Equity capital into Bulgaria had increased steadily in the first three months, having been two million euro in January, 30 million in February and 80 million in March, according to Stefanov.His message was in line with that of Economy, Energy and Tourism Minister Traycho Traykov, who said a week earlier that the number of foreign juristic and natural persons investing in Bulgaria was on the rise. Traykov ascribed the decrease in FDI in Q1 2010 to routine transactions by companies to their offices in other countries and, he said, did not mean a loss of confidence in the Bulgarian economy.Speaking in an interview with Bulgarian-language mass-circulation daily 24 Chassa, Traykov said that he and his officials were working on getting 30 companies that they had targeted to increase their investments in Bulgaria."We plan to hold a dialogue with the largest investors in the coming weeks, which will culminate in a forum," Traykov said. "At the forum, we shall encourage reluctant investors to put money in this country and persuade companies that have decided to invest here to bring their investments forward."Stefanov said that in the third week of June, his agency would launch the first public procurement procedures as part of an EU-funded project to boost awareness of Bulgaria among foreign entrepreneurs and to encourage foreign investment in the country.The project to promote investment in Bulgaria will span three years and will include coming up with a marketing strategy for sectors that have the potential to attract foreign investment.Adding in further detail to previously reported plans to stimulate foreign investment, through steps such as amending investment promotion legislation and through marketing, Stefanov said that the measures could include increasing state grant assistance for projects in strategic priority industries.Amendments to the Investment Promotion Act would lengthen the list of industries that could get state assistance, especially in transport and logistics, he said.In addition to the comments made by Stefanov, at an Italian-Bulgarian forum on bilateral economic co-operation, it emerged that work also was being done elsewhere to stimulate investment. Earlier in June, Hungarian ambassador in Sofia Judith Lang said that her embassy was working on attracting investors by citing Bulgaria's advantages in low taxes, skilled labour and relatively low pay.Separately, there was further confirmation that the capital city, Sofia, is absorbing the lion's share of FDI. Speaking on June 7, deputy mayor Minko Gerdjikov said that in 2008, of 6.7 billion euro in FDI, 4.6 billion went to Sofia, while in 2009 as the crisis took hold, FDI dropped to 3.2 billion euro of which 2.2 billion went to Sofia. According to Gerdjikov, 38 per cent of Bulgaria's GDP in 2009 was generated in Sofia.

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