News from Bulgaria / Feb 08, 96

From: bulgaria@access1.digex.net (Embassy of Bulgaria)

Bulgarian Telegraph Agency Directory

EMBASSY OF THE REPUBLIC OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

8 February, 1996

CONTENTS

[01] ENHANCING STABILITY, SECURITY AND COOPERATION IN THE BALKAN REGION

Sofia, February 7 (BTA) - Following is the full text of the official translation of a statement made by the Prime Minister of the Republic of Bulgaria Zhan Videnov at the "Future of the Balkan Region" Session of the World Economic Forum in Davos, Switzerland, on February 6, 1996.

"At present there is nothing more urgently needed than a genuine effort to build 'stability through co-operation' in Central and Southeastern Europe. Economic reconstruction and reintegration of the war-devastated areas can be successful and viable only if considered as a part of a broader regional process. And this will determine the future of the Balkans. "There is a growing recognition among the countries in the region that they need to join their efforts (without any hidden agendas) with the aim of long stabilisation and economic dynamism. Indeed these are the two sides of the same coin: economic reconstruction and reintegration into the world economy enhance stability; stability breeds dynamic economic growth and business opportunities. "Bulgaria is ready to provide her own contribution; to come up with her own share in the effort. We feel that this is also the prevailing attitude among our neighbours. "In 1995 the Bulgarian Government has developed the elements of a comprehensive plan for 'regional stability, security and cooperation' including five possible lines of action. "1. good-neighbourly relations - a reaffirmation of the fundamental principles of interstate relations in accordance with the Helsinki and Paris Charter documents; "2. transborder co-operation - enhancing integration across borders (at the intergovernmental and interregional levels) through multilateral and bilateral arrangements; "3. infrastructure development transport, telecommunications and energy networks and transregional projects - for modern communication, investment attraction and political stability; "4. trade and investment promotion - facilitating free trade and promoting public and private international investment in the region; "5. humanitarian, social and cultural cooperation - joint efforts to ensure free movement of the peoples from the region, cultural and social interaction, thus helping to permanently overcome possible ethnic, religious or other regional tensions. "We have discussed a number of options for further action. In the final analysis we have proposed that in the post-conflict period activities designed to bring about regional stability, security, co-operation should be undertaken in three main formats: "Firstly, Balkan co-operation (bringing together the states that took part in the all-Balkan cooperation conferences held up to 1990) - that is Albania, Bulgaria, Greece, Romania, Turkey and the successor states of the former Yugoslavia. "Cooperation in this format could include elaboration of joint efforts in support of the implementation of the framework agreements for peace in Bosnia. A further item on the Balkan co-operation agenda could be the implementation of bilateral and multilateral projects along the five lines of action for regional stability, security, co-operation as outlined above. "Bulgaria stands ready to implement a decision taken at the last all-Balkan conference at Tirana at the level of foreign ministers where it was agreed to hold the next ministerial meeting in Sofia.

The Bulgarian Government is ready to host such a conference during 1996 and is approaching the respective States to his effect. "Secondly, Central European-Black Sea transregional cooperation. This should focus on infrastructure development and bring together the countries of the Central European Initiative and the Black Sea Economic Cooperation on transport/telecom/energy projects. "It has become an axiom that economic growth and infrastructure development are intrinsically linked. From this point of view it must be borne in mind that the Central South Eastern European region is crossed by four of the nine trans- European corridors established at the European ministerial meeting in Crete in March 1994: "TC IV - Central Europe - Eastern Mediterranean; TC VII - the Danube ; TC VIII - the Adriatic - the Black Sea; TC IX - the Baltic - the Eastern Mediterranean "At present both the CEI and the BSEC are doing work on infrastructure projects which should be aligned and developed in the context of trans- European networks. Bulgaria has proposed her capital, Sofia as the seat of a 'focal point' - a regional centre for exchange of information and contacts on infrastructure projects by countries from CEI/BSEC and other interested countries. It also stands ready to host joint meetings of the existing 'working groups on infrastructure' from the two groups of countries. "Thirdly, Danube and Balkan Euro cooperation (the main purpose of which will be to bring together the Central Southeastern European countries that are either members of the EU or associated to the EU). "Thus, last August Bulgaria, Greece and Romania agreed on subregional cooperation in the context of their European Union affiliations. "Austria, Hungary and Slovakia have entered into a similar subregional Euroarrangement last July, also envisaging interaction on economic matters, infrastructure issues, foreign policy and home affairs. "The six countries together could develop further these two trilateral Euroinitiatives. The two 'troikas' could jointly contribute substantially towards developing a regional 'arc of stability' enhancing the European input for regional stability, security and cooperation in Central- Southeastern Europe. This could strongly enhance peace efforts in the phase following the initial stages of implementation of the Dayton accords. At the same time it will open new business and investment opportunities along the Danube. "We believe all these to be the prerequirements for both post-conflict reconstruction and for long-term stabilisation in Central-Southeastern Europe. "The results of the reconstruction and stabilisation efforts can only be lasting if they promote sustainable economic growth in the whole region. On the contrary, economic stagnation and deprivation may soon lead to resumption of hostilities and enlarge the circle of those involved. "Today we are more confident that there is growing awareness that stability and security in this region are of crucial importance for Europe and indeed, the world. This is neither an exaggeration nor overstating the obvious. There is a growing recognition of the immensity of the stakes. If we, as the world community, are genuinely determined not to allow future conflicts on religious or ethnic grounds to get out of control, this is the region, the time and place where we could both prove and test it. And it is in the accomplishment of this historic mission that Bulgaria sees the future of the Balkans."

[02] PM VIDENOV MEETS DIPLOMATS

Today at a traditional annual meeting with the chiefs of diplomatic missions in Sofia Prime Minister Zhan Videnov officially announced the Government's initiative to organize a meeting of the Balkan foreign ministers in 1996. In Videnov's view the meeting will give impetus to other two initiatives: infrastructure projects of mutual interest and cooperation of the countries of the Central European Initiative and the Black Sea Economic Cooperation.

"Bulgaria extends an invitation for joint seeking of a lasting and efficient formula for regional stabilization, security and cooperation. We believe in the prospects for a new and better future for the Balkans as a part of the 21st century Europe. Bulgaria is ready to work untiringly and to the best of its abilities to translate this policy into reality," Videnov stated.

In his address the Prime Minister made an analysis of the Cabinet's one year tenure in the field of foreign policy. The Government consistently fulfilled the goals it had announced a year ago: European orientation, regional stability, regional security and cooperation, Videnov stated.

Videnov said that there was continuity in all aspects of the Bulgarian foreign policy in the past few years, as promotion of relations with the USA and a number of the Far East countries. "We made efforts as to activate our contacts with traditional partners such as the Russian Federation and the other countries of the Commonwealth of Independent States, the Central European states and a number of countries of the Middle East and Latin America," the Prime Minister stated.

In his opinion the fact that Bulgaria officially presented its application for membership in the European Union during the Madrid summit in December 1995 was very important for its foreign policy.

Speaking on regional stabilization PM Videnov recalled that last year the Government consistently stuck to the policy it pursued throughout the conflict in former Yugoslavia: one of consistent restraint and noninterference, equal treatment of all states participating in the conflict, parallel approach towards phased lifting of the economic sanctions together with progress in the peaceful resolution of the conflict. At the same time Videnov said that Bulgaria paid high price, considering the heavy losses it sustained from the UN sanctions. "We believe that the issue of overcoming the consequences from the sanctions is not to be forgotten," Mr Videnov said. In his view, the signing of peace accords has opened new prospects for activating the efforts to gain regional security and cooperation, which is the third among the priority directions in the Government's foreign policy.

Videnov stated the Government's view that in the post-war period the international community and particularly the states in the region are faced by two sets of tasks: to apply successfully the framework peace agreements for Bosnia and Herzegovina and to create conditions, and later mechanisms, for ensuring lasting security and intensive cooperation in the region. "In connection with the first of these tasks Bulgaria already confirmed its readiness to cooperate in applying the military aspects of the peace process. We expect as a result of the talks to coordinate the concrete conditions for Bulgaria's contribution to the mission of the multinational forces in Bosnia," the Prime Minister said. He said that the Government attaches great importance to the civil aspects of the peace process. "Today we more confidently state our proposals for Bulgaria's active participation in the various, short and long term reconstruction programmes," Videnov said and added that Bulgaria has been encouraged by the first positive response on part of the EU, but expects to move on to active and practical realization. "Bulgaria has all capacities, potentials and conditions. We are close in geographical terms, we know well the region and its conditions for work. We have proved our competitive advantages which would better be used in the programmes for reconstruction in the region," Mr Videnov said.

Mr Videnov dwelled in detail on the Government's concepts on security, development and cooperation between the states of the region: establishing lasting good neighbourly relations, trans- border cooperation, intensified development of infrastructure in keeping with the European standards, encouraging trade and investment, settling legal, cultural and social issues.

Videnov voiced the stand that Bulgarian capital, Sofia, may become a 'focal point' - a regional centre for exchange of information and contacts on infrastructure projects by countries from CEI/BSEC and other interested countries.

Other initiatives for European cooperation should also be promoted, Videnov said. According to him, active role to this effect will play the EU member or associated countries. "Bulgaria already felt the privileges of the subregional cooperation with Greece and Romania. We will naturally try to enlarge this circle of cooperation by making permanent contacts with Austria, Hungary and Slovakia, which recently entered into similar tripartite cooperation," Videnov said. The six countries together could jointly contribute substantially towards developing a regional 'arc of stability' enhancing the European input for regional stability, security and cooperation in Central- Southeastern Europe, Videnov stated.

Mohammed Farah Al-Gamudi, Head of the Libyan Diplomatic Mission, spoke on behalf of the foreign diplomats. He said that the diplomats highly assess the Bulgarian Government efforts to secure stability and peace in the Balkans and the balanced Bulgarian foreign policy.

[03] BULGARIA, ROMANIA HOLD TALKS ON ENVIRONMENT PROTECTION

Giurgiu, February 7 (BTA) - The second session of the interdepartmental Bulgarian-Romanian commission for cooperation in environment protection started today in Giurgiu. At the beginning of negotiations Bulgarian Environment Minister Georgi Georgiev and Romania's Minister of Water, Forestry and Environment Protection Aurel Konstantin Ilie exchanged information about the current state of the environment in the regions of Rousse-Giurgiu, Silistra-Calarasi and Nikopol-Turnu Mugurele. The two ministers expressed satisfaction with the tendency of the last few years for abatement of trans-border pollution. Minister Aurel Ilie voiced Romania's intention to bring industrial pollution in line with the European standards. Minister Georgiev emphasized Bulgaria's position that to synchronize the work of the two ministries Romania will have to switch from point monitoring to remote monitoring. The negotiations also considered certain nuclear safety problems. The ministers exchanged information about the N-plant in Kozlodoui and the Romanian nuclear power plant in Cernavoda. The two delegations formed a working group to draft a joint memorandum to the EU's PHARE programme for financing investment projects on environment protection in the region of Lower Danube. The negotiations are continuing in a spirit of good neighbourliness.

[04] LONDON CONFERENCE ON BUSINESS WITH BULGARIA

London, February 7 (BTA exclusive by Natalia Ilieva) Tuesday's conference on doing business with Bulgaria was the centrepiece of a four-day official visit here by Bulgarian Deputy Prime Minister Roumen Gechev. It was organized by the London Chamber of Commerce, the Department of Trade and Industry, the Confederation of British Industry and the Bulgarian Chamber of Commerce and Industry (BCCI). The presence of some 50 British companies at the event was seen as a sign of growing interest in Bulgaria. The Bulgarian participants were representatives of 27 companies, of which 12 private, BCCI President Bozhidar Bozhinov and Vladimir Pavlov, Chief Secretary of the Union for Private Economic Enterprise. A similar conference will be held at the Birmingham Chamber of Commerce on Wednesday.

Roumen Gechev and British Minister of State for Trade and Industry Lord Fraser gave keynote addresses. Gechev described Bulgaria's economic policy as "a combination of growth and financial stabilization". The Bulgarian Government takes credit for a drop in inflation to 32% in 1995 from 120% in 1994 and a trade surplus of 150 million dollars last year. Gechev cited preliminary figures, putting GDP growth in 1995 at 2.5% to 3% which is a sign that the downturn in the economy is being reversed, albeit slowly.

Other macroeconomic indicators also point to stabilization. With a 1,000 million dollar foreign exchange reserve in 1996 Bulgaria is in a very good position to meet its foreign debt payments of 1,250 million dollars this year. Gechev confirmed the Government's resolve to remain firmly committed to these payments.

Gechev quoted projections for 20% to 25% inflation and a 4% to 5% rise in the dollar against the lev in 1996.

The Bulgarian Deputy Prime Minister elaborated on the rehabilitation of the financial system and privatization, the two subjects in which many British businessmen showed great interest. Bulgaria is trying to create an environment attractive to foreign business, Gechev said. In 1996 the Cabinet will put up for sale several big enterprises, targeting foreign investors with a proven potential for technical renovation. He referred to chemical enterprises worth between 500 million and 1,000 million leva. Several leading European companies have launched bids for the Devnya chemical plant. Telecommunications is another attractive sector of which a 25-30% share may go private in 1996, according to Gechev. He stressed that foreign investors may take part in cash privatization. Six months after the privatization process the new owners may sell their shares on the stock exchange. Gechev said France had confirmed that it would extend 3.5 million francs in grant aid to Bulgaria for the development of a national stock exchange.

Lord Fraser, Minister of State for Trade and Industry, confirmed Britain's political will to persist in encouraging British- Bulgarian trade and economic relations. As proof of this he cited the appointment of an expert on export to Bulgaria at the Department of Trade and Industry to encourage British companies not only to trade with Bulgaria but also to seek long- term presence in this country.

British-Bulgarian economic relations switched to higher gear when Rover entered Bulgaria and set up the Rodacar joint venture, Lord Fraser said. Now British business should capitalize on the success of already established companies in Bulgaria like Mobifon, Rover and British Petroleum. Commercial exchange growth is a positive sign in bilateral relations but in the case of Bulgaria and Britain it is far below the actual potentials, the British minister of state believes. He assured the participants in the conference that the British Government is viewing Bulgaria as a market of growing importance.

With its resolute anti-inflation policy and its efforts to step up privatization, Bulgaria is sending adequate encouraging signals to foreign investors, Lord Fraser said. He recalled that Britain has always supported a speedier integration of the East European countries into the European Union and will continue to insist before its partners that it is in their interest to expand the union eastwards as soon as possible. The British side believes that Bulgaria's integration into the EU is of vital importance for its future and stability.

Evidence of the British companies' more serious attitude to Bulgaria can be found in several directions. The joint group on electronics, telecommunications and informatics resumed its work after a five-year break. British companies have bid to implement major projects such as the reconstruction of Sofia Airport, a consortium of British firms is studying interest in Bulgaria in building a distributor network for gas deliveries.

In an interview for BTA Lord Fraser said that on the whole there is a great improvement in macroeconomic indicators in Bulgaria but that the department competent to provide export guarantees to British companies trading with Bulgaria is still not fully convinced in economic stability in Bulgaria and will wait for the completion of the negotiations with the International Monetary Fund before providing such guarantees for Bulgaria. According to Lord Fraser, Bulgaria made a late start in its efforts to attract Western investors and was left behind by the Czech Republic and Hungary but now there is considerable progress in economic reform obviously thanks to the Government's courage in adopting unpopular measures such as the ones to curb inflation. "A drop in the inflation rate from 120 to 32% is a step in the right direction but a hard decision for any Government to make because of its high social price, the British minister of state said.

[05] FIRST NEWS CONFERENCE OF TRADE AND FOREIGN ECONOMIC MINISTER

Sofia, February 7 (Vanya Ivanova of BTA) - Active participation in the talks on Bulgaria's admission to the World Trade Organization, streamlining the arrangements for the sessions of the Bulgarian-Russian and the Bulgarian-Turkish mixed economic commissions, assistance to the Bulgarian companies taking part in tenders for supplies to Bosnia and Herzegovina these are some of the priorities on the programme of the new Minister of Trade and Foreign Economic Cooperation, Atanas Paparizov, which he listed at his first news conference today.

Paparizov took office on January 23 after the resignation of Kiril Tsochev. He succeeded to the Ministry of Trade and Foreign Economic Cooperation which last year took credit for a trade surplus of 500 million US dollars, as Socialist Prime Minister Zhan Videnov said on January 26, reporting on the performance of the Government during its first year in office. Videnov noted this was Bulgaria's first surplus in five years.

Preliminary talks with Russian officials on the liberalization of trade between Bulgaria and Russia are opening late this week, Paparizov said. His Ministry will insist on the Russian side granting Bulgaria preferential tariff treatment.

Bulgarian cigarette sales on the Russian market is the other issue the Ministry of Trade and Foreign Economic Cooperation will raise at the preliminary talks. The Bulgarian side will launch the idea of setting up Bulgarian-Russian joint ventures for the production of cigarettes. According to Paparizov, it is quite possible to sort out the technicalities concerning two of the joint production projects before the meeting of the mixed economic committee which is to be held on February 27 in Moscow.

According to Paparizov, the sides should specify the terms and conditions for the export of medicines to Russia and consider the continuation of gas deliveries after the expiry of the Yamburg agreement.

The Ministry of Trade and Foreign Economic Cooperation will seek activation of the dialogue with Turkey on the establishment of a free trade area. Bulgaria will insist on the liberalization of tariffs and the movement of capital, the setting up of joint ventures and the exchange of manpower.

The Ministry will activate talks on the establishment of free trade areas with Poland and Hungary with the hope of the agreements entering into force in early January 1997. Assistance will be given to the Bulgarian companies participating in the tenders for the reconstruction of Bosnia and Herzegovina, Paparizov said.

[06] BULGARIA, RUSSIA COOPERATE IN TELECOMMUNICATIONS

Director General of the Bulgarian Telecommunications Company Vladimir Poptodorov and Deputy Chairman of Rostelekom Vladimir Vassin signed a contract on international telecommunications services between Bulgaria and Russia, the Bulgarian national radio said at midday today.

The document was signed during the visit to Moscow of Bulgarian Committee of Posts and Telecommunications Chairman Lyubomir Kolarov. The visit takes places at the invitation of the Russian Federation Minister of Communications Vladimir Bulgak.

[07] NORSK HYDRO ENTERS BULGARIA

Norway's major industrial company, Norsk Hydro is entering Bulgaria. Norwegian Foreign Minister Bjoern Tore Godal, who is paying an official visit here, today inaugurated an office of this company in Sofia.

Norsk Hydro's main fields of operation are agriculture, light metals, oil and gas, petrochemicals. Based on production and utilization of Norwegian energy resources, the company enjoyed strong international growth during the 1970s and 1980s, first and foremost in Europe. During the 1990s, greater focus was directed towards increasing the activity in the growing markets outside Europe.

Norsk Hydro regards Eastern and Central Europe as an important region for future expansion. The needs of this region fit well with Hydro's areas of activities and expertise. Such expansion depends on close cooperation with local companies and organizations, as well as with central and local authorities, especially in a view of the ongoing and planned privatization process in these countries.

Over the past few years Norsk Hydro opened offices and subsidiaries in Riga, Sczeczin and Warsaw, Prague, Bratislava, Budapest and Ljubljana. An office in Bucharest was opened yesterday. The company has launched several projects for industrial cooperation.

The opening of an office in Sofia is seen as a good sign for the future of Bulgarian-Norwegian commercial and business contacts. This step is expected to attract more Norwegian companies to Bulgaria.

[08] CONSTITUTIONAL COURT SAYS CONCESSIONS LAW IS CONSTITUTIONAL

The Constitutional Court ruled that the Concessions Act does not violate the Constitution. Last October MPs of the opposition Union of Democratic Forces (UDF) challenged the constitutionality of the Concessions Act passed the same month. The MPs of the UDF also asked the Court to make a binding interpretation of Article 18 of the Constitution enumerating the units and natural resources over which the state has exclusive ownership rights.

The Court ruled that the above article of the Constitution lists exhaustively all units of property and activities over which the state shall grant concession or establish monopoly. The Court was one vote short of ruling that the law on concessions must apply only to the units and activities provided for by the Constitution. It decided that their list can be expanded only by the law on concessions.

The Constitutional Court ruling placed with the Government the power to determine the procedures, units and activities for which concessions may be granted: civil airports, power plants, oil and gas pipelines and telecommunications services. They are all specified by the law on concessions but do not figure in the Constitution. All licences issued by the Government will be reviewed by Parliament.

"The Court ruling gave the green light to the Bulgarian- Russian joint venture Topenergy. If the Court had limited concessions to the units listed in the Constitution, it would have allowed Prime Minister Zhan Videnov to block negotiations with Topenergy, citing the Constitutional Court's decision," said Judge Milcho Kostov, a rapporteur on the case. He took a stance contrary to the Court ruling. "Saying that this decision gives the green light to Topenergy shows a total lack of understanding of the problem," said Judge Georgi Markov, former MP of the Union of Democratic Forces. In his view, the Concessions Act promotes investment in Bulgaria.

The Constitutional Court was unanimously in favour of a provision of the Concessions Act, according to which a concession agreement terminates on the death of the person who received it. The constitutionality of this provision had been challenged by the MPs. The real right to use is not inheritable or subject to conveyancing, the Court ruled.

[09] MPs DEMAND PARLIAMENT CHAIRMAN SENDOV REMOVAL

Eighty one MPs of the opposition Union of Democratic Forces (UDF), Popular Union, ethnic Turks' Movement for Rights and Freedoms and independents moved a resolution in Parliament on the removal of National Assembly Chairman Blagovest Sendov because of his statements during a recent visit to Moscow, BTA was told by Sasho Stoyanov, MP of the UDF.

Last week during an unofficial visit to Moscow Sendov met with Russian President Boris Yeltsin. After the meeting the ITAR- TASS news agency reported that Yeltsin and Sendov agreed that there was no need for NATO's enlargement eastwards.

"Academician Sendov grossly infringed the Constitution voicing a stand on an issue of primary importance for the country's foreign policy, without being authorized to do so by Parliament," reads the resolution. As another motive for the demand the opposition MPs point that, assuming the role of a mediator between Prime Minister Zhan Videnov and Russian President Yeltsin, Sendov committed another violation of the Constitution. Through Sendov the Russian President conveyed an invitation to Bulgarian Prime Minister Videnov to visit Moscow.

According to the parliamentary rules of procedure, a written motion for the removal of the chairman of the National Assembly or his deputies should be put to a secret-ballot vote at the first plenary sitting, following the day the motion was submitted. More than half of the MPs attending the sitting should vote for the motion so that it be accepted