STATE BUILDING AND ECONOMICAL REFORMS IN THE WESTERN BALKANS – AN AGENDA FOR SECUITY AND PROSPERITY Печат
Автор Емил Тепавичаров   
Неделя, 01 Януари 2006 03:02
STABILITY PACT CONFERENCE
SKOPJE, 1-2 DECEMBER 2005

STATE BUILDING AND ECONOMICAL REFORMS IN THE WESTERN BALKANS – AN AGENDA FOR SECUITY AND PROSPERITY
SECOND SESSION: ECONOMIC DEVELOPMENT AND REGIONAL COOPERATION

Statement
by Emil Tepavicharov, Chief Expert, Foreign Economic Cooperation Directorate, BULGARIAN MINISTRY OF ECONOMY AND ENERGY
Your Excellencies,
Dear Ladies and Gentlemen,


Let me first express my appreciation and satisfaction of being here among my colleagues from different countries and organizations.
Regional cooperation will help our countries to take further commitments and accept the new challenges of the implementation of the policy reforms towards continued economic growth and sustainable economic development of the region.
We should concentrate our efforts to continuing the intraregional work and sharing policy experience and expertise, aiming at enhancing the business environment and boosting private investment in SEE.
South Eastern Europe is a diverse and complex region, characterised by a relatively low level of income compared to that of Western Europe. The seven countries considered here as South Eastern Europe have a combined population of around 53 million people, and the combined GDP in 2004, at nominal exchange rates, amounted to around 130 billion euro. This gives an average GDP per capita of around 2,300 euro.
Another feature common to the countries in the region is the relatively fast growth that has been experienced in recent years. Annual real GDP growth in the region has been above 4% since 2001 and catching up in real incomes is taking place.

In the last 5 years all countries succeeded in meeting one of the main goals – conclusion of trade liberalization process and the entry into force of 28 bilateral FTA thus finalizing the establishment of the network of agreements under the Memorandum of Understanding.
Following the establishment of the network of Free Trade Agreements, trade with the countries in the region increased by 49.4% in 2004, reaching USD 1.6 billion, the imports growing by 60.3% and exports – by 44%. These high figures are clear evidence for the benefits for all participants and for the potential and perspectives of the trade in the region.

We have the positive example of CEFTA that proved how regional integration can support and complement the broader objective for European integration.
Bulgaria is ready to provide advice and assistance, sharing its expertise in the negotiation process with the EU with a view to facilitate it. Having in mind the conclusion of the accession negotiations and the signature of the Accession Treaty on 25-th of April 2005, Bulgaria has to observe the commitments and obligations stemming therefrom.
Parallel concrete actions are needed in the field of non-tariff barriers to trade. Following the initial process of identification of non-tariff barriers, countries should take measures to eliminate obstacles or improve implementation and practices that create difficulties in the activity of our business entities. (Here I would like to thank the Swiss Government and the EU for the studies made giving us the picture of NTB’s applied from the countries in the region.)
We recognize the growing importance of Trade in Services for our economies. The potential that we have, should be developed and the volume of trade in services in South East Europe increased, thus allowing us to further improve our position in the world trade as well.
The EU is by far the most important trading partner for the countries in the region, accounting for between half and three quarters of the foreign trade of the countries in the region. Moreover, export performance of these countries has remained positive regardless of economic conditions in their main export markets.
Mutually beneficial trade relations and transparent trade policies are the basis for creating a better Environment for Investments. The growing amount of investments attracted by our countries proves that progress has been made in improving the conditions for investors. My opinion is that we can further benefit and attract more investments if all countries provide better opportunities for economic activity as a region.
In 2004 the amount of foreign direct investments in South East Europe reached 8 billion euro. Today we are witnessing a relocation of capital from the high-risk regions of the world towards Eastern Europe. And this is not an accidental phenomenon. Bulgaria and Romania have a clear-cut road map for full membership into the European Union. Croatia is already following firmly in our footsteps. The region as a whole is heading for our common European future. We have the support of respectable international financial institutions. We also have an enormous potential for development, which we can utilize together.
In fact, euro area banks and financial institutions have been the most important investors in the respective banking sectors, contributing to financial development in the region.
In addition to the financial sector, FDI has typically concentrated in manufacturing industry as well as transport and telecommunications. Often, manufacturing activity in the region is well integrated into the production structures of Western European economies, which have been attracted by the comparatively low costs in South Eastern Europe and a relative geographic proximity.
Nevertheless, the Region continues to face major challenges in sustaining stability and reaching the overriding goal of stronger ties to the rest of Europe. The overarching challenge faced by all countries of the region is to build strong, fully functioning states, which are capable of delivering on the needs of their citizens and of ensuring effective regional cooperation and of more advanced relations with the EU.

As a Regional Co-Chair of the Investment Compact Bulgaria highly appreciates the opportunity to contribute for the economic development of the region and for promotion of South Eastern Europe as a profitable investment location.
We are convinced that our achievements in the field of improving the business and investment climate are due to the beneficial cooperation between the state and the business representatives. The results of this beneficial cooperation are visible in the statistics. In April 2005 the Business Climate Index reached a record high for the last eleven years.
Due to the successful investment promotion policy of the Bulgarian government, the FDI in 2004 reached the highest level for the last 15 years, amounting to more than 2 billion Euros.
The success of our country is a part of the overall improvement of the image of the South Eastern Europe region. The perception of the region has improved and it is acknowledged that South East Europe is getting more and more open for business. The region has made remarkable progress in providing better conditions for the investors.
The permanent progress in regional cooperation and integration is among the main advantages of the region. Other competitive advantages are its geographical location, macroeconomic stability, infrastructure development ensuring connection with the European markets, EU accession process, bilateral agreements for mutual promotion and protection of investments, bilateral treaties for avoidance of double taxation etc.
Talking about the region as a whole, we all agree that human resource quality is among the main competitive advantages of our economies. In order to keep up with the overall improvement of the labor force we have to strive for replacing the old facilities with modern information and communication technologies.
At present, the development of knowledge based economy, the globalization and the limited resources require allocating funds for research & development, stopping the brain drain from our countries, creating conditions for elaboration of consistent company policy for employees’ qualification and education.

Overcoming unemployment, in particular youth unemployment, remains the Region’s greatest social and economic challenge; and failure to achieve progress may threaten political and social stability.

We appreciate the contribution of the donor countries. I take the opportunity to thank the Stability Pact and all international institutions, organizations and foreign governments, represented here for supporting the activities of our countries related to liberalization and facilitation of trade and for economic reforming policy in South Eastern Europe. We see their role in assisting us responding to our specific needs. At the same time we should not forget that the initiative should be ours and the successful accomplishment of the main priority – becoming members of the European Union depends on our own will and efforts.

And finally – let us work together to enable our countries, our region and our citizens meet the challenges that globalisation brings.

Thank you for the attention!