Opening Remarks of the AmCham Bulgaria President at the Business Breakfast with PM of Bulgaria October 7th, 2019.
Dear AmCham Bulgaria Members, Ladies and Gentlemen, Friends,
Welcome to the AmCham Annual Business Breakfast with the Government of the Republic of Bulgaria. Thank you all for being here with us today. Thank you, Prime Minister Borissov.
I would like to thank our Gold Sponsors: Dundee Precious Metals, General Dynamics and Telelink for their support. Thank you all supporting sponsors as well. This is how we show that we are one community.
We are very happy that for a second consecutive year the American business community can discuss various important topics with the Bulgarian Government. Main areas of our meeting will touch issues of national economy, strategic cooperation, investments, and innovation. We would like to express once again our philosophy that motivates us: only together – business and government – can ensure certainty and stability in the economy for the prosperity of the whole nation.
We have declared it many times, that AmCham has and will always be ready to support and to provide expertise and solutions in the efforts of the government to improve the business climate, to enhance investments, to transform the country into a place of wellbeing of its people. We are happy that Bulgaria continues to be a reliable partner within the European Union and NATO, as well as the bilateral relations between the USA and Bulgaria flourish like never before.
So, please, let me give some framework of our discussion.
Today’s event will explore some of the new horizons of the Transatlantic Relations of Bulgaria and the United States.
Over the past year we have witnessed some significant global economic changes and debates. In our focus today are the strategic cooperation between both countries, the attraction and retention of investments, the innovation as main fuel for economic growth, people development and youth, as well as energy and cyber-security. We believe that there is progress in some areas since our last meeting which we would like to acknowledge, and there are matters that if solved, the path of Bulgaria towards prosperity will be secured.
Bulgaria has its own place and positioning within the Transatlantic Economy thus taking the advantages of the biggest global market that the USA and the European Union created. As an EU Member State Bulgaria has a unique opportunity not only to catch-up the leading global economies, but to take active part in the European Single Market, incl. the Digital Single Market, and in the Bank and the Energy Unions. The Bulgarian companies already compete with the best or they are part of global supply chains thus boosting local economy and export.
Let me share you some of the figures that our sister AmChamEU prepares each year about the Transatlantic Economy:
- the EU and the US are the most deeply integrated regions in the world
- there are 16 million jobs on both sides of the Atlantic
- they produce one third of the global GDP
- they do 4.5 trillion euro in total commercial sales a year;
- EU and the USA equal for half of total global personal consumption.
Impressive, indeed. And Bulgaria has its fair contribution to those numbers.
Bulgaria’s export balance of goods with the United States is positive with goods for USD 660 million exported from Bulgaria, and with nearly USD 400 million imported from the States.
With regard services the States has some lead: Bulgaria’s export equals to USD 410 million and the United States exported to Bulgaria USD 470 million.
Today we are witnessing two major trends that shape the current political and economic life: first one is the strategic cooperation, and second is related to further upgrade of the business climate in Bulgaria.
The Transatlantic relations between Bulgaria and the USA entered new positive phase in the areas of defense and cyber-security. The strategic cooperation in the defense area showed the determination of the government to be reliable NATO ally and to meet the Dublin Agreement decisions. The purchase of eight new F-16 Block 70 was not just a commercial deal – it was just the start of strategic partnership that will secure Bulgaria’s defense and capabilities, will ensure the introduction of technological know-how through the industrial partnership, and will train a whole new class of Bulgarian pilots.
F-16 Block 70 is ideally suited for Bulgaria’s national defense and will catalyze a long-term strategic cooperation in various of areas. Such a step forward prepares Bulgaria to meet the challenges of the 21st century. AmCham is happy to partner actively with Lockheed Martin in the process of presentation and selection of the new jet fighter for the Bulgarian Air Force.
In the area of cyber-security America is the global leader and pioneer. Among our members you can see top-brands that are willing to take part in the smooth digital transformation of the Bulgarian economy and public institutions: from the way Bulgarian children study to the reduction of red tape, easy of communicating with the administrations, and to the city management. Many projects have been done, and many remain to the level of good working e-government of Bulgaria.
U.S. Investments in Bulgaria
As Petar mentioned earlier, the economic ties between both countries are strong and the penetration of U.S. capital in Bulgaria is stable. The latest available data show that the U.S. investments are around 5,7% of the overall FDI in Bulgaria (11,17% of the Top-5 sectors that concentrate the U.S. capitals in Bulgaria), totaling around 4,5 billion leva. These investments are in strategic sectors such as manufacturing, energy, ICT and agriculture. They provide nearly 30,000 jobs of highly qualified Bulgarians.
There is no doubt: the U.S. investments in Bulgaria catalyst the decision of local people to stay.
Moreover, the data shows that the U.S. investments are steady growing and have positive impact over the Bulgarian economy. Please, let me emphasize some of them:
Being the sixth largest foreign investor in Bulgaria, the U.S. companies show their confidence in the sustainable development of the local economy. They trust local authorities, respect and attract local talents. They plan their businesses to grow along with the regions and the national economy altogether.
Here are some facts.
This year alone we have witnessed the upgrade or introduction of some long-awaited projects of AmCham members. At Krumovgrad Dundee Precious Metals inaugurated the first metals mine in Bulgaria for the past 40 years. Coca-Cola HBC and Mondelez Bulgaria inaugurated their overhauled production lines for refreshing drinks and candies respectively, transforming them into mega-factories and securing their leadership in the region.
Ladies and Gentlemen, these facts show something more: those investments are done in sectors with higher added value. These are businesses which implement top-technologies, innovation, and the knowledge and the skills of Bulgarian and foreign experts. These are companies which brands either shape-shift or even disrupt whole sectors of the global economy. AmCham members – American, multinational and Bulgarian companies – share common values like being excellent tax-payers, employ bright and socially engaged teams, and they are true investors in society.
AmCham Activities to Foster Investments and Innovation
Over the past year AmCham Bulgaria had many occasions to demonstrate its good will for partnering with the national authorities in key-sectors. Thus, we are fulfilling our mission and priorities. We are not shy: So, I have to say that over the past year AmCham pioneered in several topics of national importance to contribute to the upgrade of the local economy and to present new business opportunities.
Let me give you some examples.
Select USA 2019
We have already mentioned the U.S. investments in Bulgaria. But quite few of us know about the Bulgarian investments in the United States. There are more than two dozen of mature Bulgarian enterprises of various scale and sectors, whose leadership took the bold step to enter the American market. For years they compete with local and international businesses there. We can mention ScaleFocus, BULPROS, Milara International, Huvepharma, Ficosota, Waltopia, Chaos Group, and many others that trailblazed successfully states’ markets for years. Even more, they have opened production facilities in the U.S. and have hired local people in the States.
Those businesses – both of migrants and Bulgarian capital – secure around 4,000 jobs and more than 1 billion dollars of sales. These are quite impressive numbers, I would say.
Following its mission to bring businesses together, AmCham partnered with the U.S. Commercial Service in Sofia in organizing the Explore USA conference this April. We presented the Bulgarian success stories in America, we did our stake to inspire those who still hesitate and to overcome the myths about the capabilities, entrepreneurial spirit and pessimism of Bulgarians.
This was our attempt to foster the bilateral trade relations and to show the perspectives of the giant American market to some of Bulgarian business dreamers.
But we didn’t stop there.
Our Board’s priority is utilizing the platform of AmCham for constant flow of ideas, knowledge and capital. An excellent baseline is to make a bridge between talented people and the venture capital from the United States and Israel.
Why Israel, some might ask? There are deep historic links between both countries. We have discovered that the successors of Bulgarian Jews who migrated 50-60 years ago to the new-born State of Israel, are today’s top-managers and influential politicians there. We were surprised to find out that in their hearts they carry the love to Bulgaria that was planted by their parents.
On the other hand, Israel, just like the USA, sees Bulgaria as a friend. If you add innovation, inspiration and desire for progress in that mix, we can create one new form of cooperation and growth. So, in AmCham we believe that it is worth exploring those relations in high-value added sectors in future.
As a result, we organized the InnoStart Forum in June. Then we welcomed 300 guests from 10 countries to exchange, share experience and to inspire each other for the sake of making Bulgaria innovation and startup nation.
For us these are true evidence of the importance of the role of AmCham in the development and the upgrade of the future of the Transatlantic relations. And we will continue to work towards more tangible results in terms of joint projects, venture capital attraction, technology transfer, startup nurture and institutional exchange.
Business Climate Upgrade
The second tendency is related to some specific and important questions that we would like to discuss with the government – the business climate upgrade.
Digital Sustainability Forum
We are in the era of digital transformation. Industry 4.0. is here, and the development of the artificial intelligence in Bulgaria is among the keys for country’s positioning in the global digital economy.
In May and July AmCham initiated two round tables that resulted into a draft proposal for the strategic development of AI in Bulgaria. AmCham led a group of tech leaders and the list will be soon presented to the government. In the context of the European AI Strategy, Bulgaria has to decide which industries it plans to develop with AI in order to find competition advantages and business niches.
So, to recap this section: pushing for innovation and cooperation with the USA, EU and Israel, promoting Bulgarian business in the USA and enhancing AI into key-sectors are the three of the most visible initiatives that AmCham developed since our last meeting with the Government.
We are certain that they are long-term and already create opportunities to the Bulgarian and American companies. AmCham continues to promote Bulgaria before other AmChams, European institutions and the global venture capital in order their rediscovering of the country as the digital gateway and hub of Europe.
Main global issues – Brexit, China
However, today’s topic has number of challenges. With all due respect to our British partners, but “Brexiting” has become part of the new-slang in Europe. Now we all are watching the way Britain, its business and people departure from the EU. No-Deal in end of October is not acceptable to anyone. Agreement must be made in order to have certainty for both the transatlantic business and the European citizens.
Also, the recent new tariffs that Washington imposed on a set of European goods, shows that there is a need of change of how the World Trade Organization is working.
We believe that Bulgaria has its own stake and role to play in these processes.
The trade disputes between the United States and China are hot news for years now. AmChams across Europe support the American companies in their attempts to win the trust of institutions and enterprises across Europe to provide secure, reliable and trustworthy hardware and software.
We will not be tired to repeat that on the mutual agreement between Washington and Brussels depends not only the prosperity of the Western World, but of our Planet too. Trade wars might only weaken both Europe and the States eliminating their advantages gained for more than half a century and business opportunities.
Cyber-security, Data protection, E-Government
Coming to that point I would like to emphasize that cyber-security is critical to any country or organization in the XXI century. Again, America is well-known with its pioneering and capacity to innovate, create and protect the digital economy. American companies are always on their watch to provide non-stop services, support and solutions to their customers. Moreover, the international cooperation in the field of cyber-security lies in the essence of preventive and proactive measures any government can apply.
Data protection, e-governance and the technological cooperation are among the priorities of AmCham. I would like to assure you, Mr. Prime Minister, and Dear Ministers, that you can rely on our support, know-how and solutions, in order to build, improve and upgrade the policies and technological base of the digital sphere of Bulgaria.
Now I am going to touch a topic that is dear to my heart – Energy. We cannot avoid discussing energy security and supply in the region, including Bulgaria.
The country is still heavily dependent on single energy provider in gas, oil, and nuclear fuel. There are some single independent lighthouses that either just flicker or still shine despite all odds: recently we have witnessed the first LNG import from the United States to Bulgaria and the two American power stations continue to provide electricity to people and stability to the national energy system. They both guarantee the power generation and supply, as well they utilize local fuel thus securing jobs, local businesses and social investments.
In the sub-sector of nuclear energy, Westinghouse has declared their readiness for more active participation in the energy diversification of Bulgaria.
American business in Bulgaria always showed good will and determination for constructive dialog to provide solutions for the mutual benefit and understanding with the government.
Education, Culture, Archaeology
Excellent areas in such long-term cooperation are education, culture, and archaeology. Earlier this year the government and the Fulbright Foundation extended the period of the educational exchange program for Bulgarian and American students. America for Bulgaria Foundation invested 13 million leva for preservation of the Bishop Basilica in Plovdiv. Many American artists performed before Bulgarian audience and fans.
In short, there are areas where we do cooperate well, and there are sectors that need attention, upgrade and changes. AmCham and its leadership is ready to dialog and to provide support.
So, on behalf of our more than 350 members I would like to thank the Prime Minister Borissov and the distinguished ministers for being here with us today. We are looking forward to having a fruitful discussion now and some substantial follow-up and new initiatives. Also, I would like to thank the ministers that could not attend today but with whom we continue working on the common agenda.
I would like to encourage our membership to seize the moment and to ask constructive questions, as well as to share concrete solutions for the sake of the business climate improvement, enhancement of investments, education and digitalization of Bulgaria.
Each meeting of such a format must lead to some positive change. The message of AmCham is clear – we have embraced all progressive features of our predecessors and we are governing our businesses and AmCham with the will and vision to boost the economy, to improve the lives of the Bulgarian citizens, and to present the advantages Bulgaria before the global capital.
Just like last year this introduction was long. I do believe that it was important since it aims to shape the conversation with the government and shows what we have done so far and what we aim to achieve.
The key word here is – TOGETHER.
Once again – Thanks to our Gold sponsors and supporters. I would like to thank the media for being at the Official part of the event.
It will be our second event of AmCham this year, in which the famous African proverb echoes from a stage: if you want to go a long journey, you’d better go together.
So, if we want to succeed and our children and grandchildren to be proud of what we have achieved in our careers – both politics and business, – we must cooperate, communicate and work together.
And we should do it not now, but yesterday.
Thank you for your attention.