FOREIGN INVESTMENT IN BG
Bulgaria gained high recognition in terms of the ratio of a country’s share in global inflows to its share in global GDP (Inward FDI Performance Index) and was classified at the remarkable 12th position, ahead of Estonia, Slovakia, and the Czech Republic. Bulgaria is also the 5th-largest recipient of FDI inflows in South-East Europe and CIS, according to UNCTAD’s World Investment Report 2005. In the same report in the Matrix of Inward FDI Performance and Potential, 2003, Bulgaria is classified in the high FDI performance group of front runners (highest FDI potential), together with China, Finland, Israel, Czech Republic, Hungary, Slovakia, Slovenia and Estonia, while Croatia and Romania are far behind Bulgaria in the FDI Performance Index. In South-East Europe and CIS, the Russian Federation and Bulgaria are the only target economies mentioned by 68 respondents as current locations of their foreign R&D efforts in developing countries. The rest of the region does not appear on the investment map for R&D. The number of Greenfield FDI projects in Bulgaria is also growing according to the statistics of the report, namely: 77 in 2002, 96 in 2003 and 109 in 2004.
The Human Capital Index classifies Bulgaria in the group of top 40 (among 120) ahead of the Czech Republic, Slovakia, and Romania.
Flows of foreign direct investment to the countries of South-East Europe and the Commonwealth of Independent States (CIS) increased in 2004 for the fourth consecutive year, reaching an all-time high of US$ 35 billion, and that growth is likely to continue over the near future, reveals UNCTAD´s World Investment Report 2005 Trans-national Corporations and the Internationalization of R&D released.
Foreign direct investment (FDI) is defined as a long term investment by a foreign direct investor in an enterprise resident in an economy other than that in which the foreign direct investor is based. The amount of FDI is a positive indicator for the state economy. The 12 states rated higher than Bulgaria in the classification include six countries of South- East Europe and the CIS (Bulgaria, Croatia, The Former Yugoslav Republic of Macedonia, Georgia, Kyrgyzstan, and the Republic of Moldova) and six new EU members (the Czech Republic, Estonia, Hungary, Latvia, Slovakia, Slovenia). Other well-developing countries listed higher are Congo, Singapore, Hong Kong, Ireland and Belgium.
On the index for largest recipient of FDI inflows Bulgaria has a favourable position, ranked 61-th among 125 countries.
The two European Union candidate countries of Bulgaria and Romania were the main recipients of FDI inflows to South-East Europe. Romania’s record US$ 5 billion was partly the result of privatization of its downstream oil company, Petrom, through acquisition by OMV of Austria. In Bulgaria, Telecom Austria acquired the telecom operator MobilTel, while Viva Ventures of the United States took majority control of the Bulgarian Telecommunications Company.
The economies of Central and Eastern Europe and Bulgaria as well are set to see a slowdown in economic growth, mainly because of the decline in global economic conditions and the major reforms, which are in process, according to the prognosis of Mr. Neil Buhne, UN Permanent Coordinator for Bulgaria and UNDP Permanent Representative. However, even with a predicted drop in growth rates from last year’s 7 per cent to about 5 per cent, the region will remain one of the worlds most buoyant and in the nearest future will implement most of the European regulations, which will increase the growth of FDI. According to Mr. Buhne Eastern Europe is the fastest well-developing region in the world.
According to preliminary data, foreign capital invested in Bulgaria in the first four months of 2005 amount to EUR 334.million. Bulgaria's National Bank (BNB) registered in January - September FDI amounting to EUR 1.322,8 M, thus going up by 11.5% as compared to the same period in 2004. According to UNCTAD’s World Investment Report 2005, foreign capitals invested in South-South-East Europe are 10.778 billion dollars. Leader in the region is Romania, with 5.174 B - Bulgaria is the 2nd -largest recipient of FDI, followed by Bosnia and Herzegovina and Albania. Competitive analysis with other CEE countries and especially Romania and Croatia – Bulgaria’s major competitors for FDI – highlights Bulgaria’s generally advantageous position.
Worldwide - Bulgaria attracted 2.2% (648 B) of all FDI, followed by countries like Italy, Greece, Austria, Portugal, the special edition of Ernst and Young reported. In 2005 the FDI in Bulgaria has reached the record level of USD 2.5 B accounting for 10.1% of the GDP. The most important source of investment projects into Europe continues to be the US. The United States retained its position as the number one recipient of FDI, followed by the United Kingdom and China. In the case of the United States, outflows increased by over 90%, to $229 billion, a record high.
The territory of Bulgaria is 110 000 sq. km. The Northern part of the country comprises of the Danube plain, which converges to the East onto the Dobruja and Ludogorsko table-lands. Southwards, crossing the country from West to East and dividing it into two parts lies the Balkan Mountain range, with its highest peak Botev – 2376m. Next to the Balkan Mountain range and further Southwards lies the lower Sredna Gora mountain. Between these two mountains are located the Rear Balkan Mountain valleys – Sofiyska, Pirdopska, Karlovska, Kazanlashka etc. The central parts of Southern Bulgaria are occupied by Upper Thrace plain. In the Southern and South-Western parts of Bulgaria are situated the highest mountain within the Balkan Peninsula – Rila, with highest peak Musala – 2925m, and the second highest mountain with wonderful conditions for winter sports – Pirin with highest peak Vihren – 2914m. Another magnificent mountain with amazing scenery is the Rhodope Mountain with its highest peak Goliam Perelik – 2191m. 8 out of the 37 low and high mountains exceed 2000m.
The capital of Bulgaria is Sofia, which lies on the foot of the beautiful Vitosha Mountain where the highest peak is Cherni vrah – 2290m.
There are 400 high mountain lakes in Bulgaria scattered among the cirques of Rila, Pirin and one in the Balkan mountain. This is a priceless richness, which yet will attract many and many nature landmarks admirers.
The unique mountainous nature of Bulgaria grows more and more into a top priority for the country officials regarding its preservation for the future generations. A good number of biosphere reserves have been founded, and huge territories from Pirin, Rila and the Balkan mountain have been announced National Nature Reserves. The Pirin National park is included in the UNESCO list for shielded territories and nature landmarks representing beyond national, all human values.
The Black Sea coast attracts plenty of interest in summer among tourists too, with its moderate-continental climate, at the most Southern parts even going into Mediterranean, which makes Bulgaria as sought after and explored destination as are Spain, Greece and Turkey.
The hotel, holiday villages and home development increases more and more, due to the demand of tourist services and the interest in purchasing of properties and real estates within the country.
Our country is proud with its rich history. Thracians, ancient Greeks and Romans, as well as many other tribes or nations have set a foot on the territory which in 7th century AD becomes the home of the Slav- Proto-Bulgarian kingdom.
The population itself is an interesting mixture with its minor ethnicities – Armenians, Turks, Roma who have been living among the Bulgarians peacefully and in mutual tolerance for centuries.
Bulgaria is a wonderful country, and once having been there, you will always come back.
