Bulgaria to lure investors

The global economic downturn has hit hard the poorest EU member country, which benefited from investment in real estate and financial services in the past decade.

Stoyan Stalev, head of the state investment promotion agency, said he expected FDI to have fallen over 50 percent in 2009 to about three billion euros, but would show a moderate growth of about 10 percent this year following an economic recovery in Western Europe.

He told reporters that Bulgaria, which joined the EU in 2007, planned an advertising campaign in Asia to promote itself as an investment destination and a gateway to the 27-nation bloc.

“We will seek a better position in the regions with high growth rates. Korea has a growth rate of four percent, China – eight. We expect serious investments from there,” Stalev said.

China’s largest sports utility vehicle maker, Great Wall Motor Co has already started the construction of a plant to assemble cars under its badge in northern town of Lovech.

“If that investment goes through as planned, it will be a huge success, because car manufacturing is a very important factor for the whole economy,” he said.

Another Chinese investor, Luoyang Glass Group, plans to build a glass factory near Razgrad, in northeastern Bulgaria.

Stalev said there was Korean interest in real estate, while other officials had said electricity production was also on the radar screen of Korea companies.

Economists and analysts have criticised Sofia for failing to create a stable manufacturing base during the boom years, when most foreign cash was channelled into real estate.

Bulgaria’s poor infrastructure, inefficient courts and rampant corruption have put serious investors off and the Balkan country of 7.6 million remains the least developed EU nation.

Stalev said Sofia’s main priority was attracting production-linked investment to create jobs and ensure a return to sustainable growth.

He also said there was room for building logistics parks and warehouses to benefit from Bulgaria’s geographic position as a gateway between Europe and Asia.

Bulgaria can benefit from its fiscal stability and corporate tax of 10 percent – the lowest in the EU – as well as the efforts of the new centre-right government, elected last July, to overhaul the infrastructure and crack down on graft, he said.