ECONOMY

FDI in Bulgaria to jump to $1.4 billion in 2003

SOFIA (Reuters) – Bulgaria expects to attract $1.4 billion in foreign direct investment in 2003, well above last year’s $874 million despite the weak global economy, the Foreign Investment Agency (FIA) said yesterday. In an interview with Reuters FIA, Executive Director Pavel Ezekiev attributed the jump to an improved business climate in Bulgaria and his agency’s aggressive marketing among potential investors. Attracting foreign direct investment (FDI) is vital for the Balkan country of 8 million people to prepare its ex-communist economy for European Union membership as early as 2007 and cover a growing current account deficit. «This year’s investment level is impressive given what Bulgaria has attracted in previous years,» Ezekiev said. Bulgaria has attracted some $6 billion of FDI over the past 11 years whereas the Czech Republic, a more advanced EU candidate, had more than $5 billion in 2002 alone. Analysts blame slow reforms, corruption and regional conflicts for Bulgaria’s low FDI level over the past decade. Ezekiev said FDI rose to $1.2 billion in October, when Hungary’s OPT Bank paid 311 million euros ($380 million) to acquire Bulgaria’s sole remaining state bank DSK. Another $200 million of foreign investment was expected in the last quarter of this year. «It is a realistic forecast as the last quarter is always the strongest one, because most companies hurry to finalize their deals and plans for the year,» Ezekiev said. The FIA projects next year’s FDI to reach $1.5 billion, when Bulgaria plans to sell seven state-run power distribution companies and factories of tobacco monopoly Bulgartabak as well as complete the delayed privatization of telecoms operator BTC. Apart from sell-offs of state assets, Bulgaria expects FDI from signing offset deals in the defence sector. Under offset deals, major government procurement contracts are usually linked to obligations for investment in the country by the winner of the deal.