Bulgarian Telegraph Agency (BTA), 96-12-02

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From: Embassy of Bulgaria <bulgaria@access1.digex.net>

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

2 December, 1996

CONTENTS

[01] BULGARIA FULL W.T.O. MEMBER AS OF TODAY

[02] BULGARIA WANTS OBSERVER STATUS IN SCHENGEN GROUP

[03] UN THIRD COMMITTEE ADOPTS RESOLUTION ON BULGARIAN MINORITY

[04] U.S. AEROSPACE FIGURES VISIT BULGARIA

[05] PRESIDENT ZHELEV: TODAY O.S.C.E. HAS MORE GLOBAL FUNCTIONS ON SECURITY MATTERS

[06] NUCLEAR ENERGY COOPERATION WITH RUSSIA

[07] BULGARIAN-MACEDONIAN TALKS ON TRADE LIBERALIZATION

[08] BULGARIAN, YUGOSLAV DEFENCE MINISTRIES SIGN COOPERATION PLAN

[09] LIBERAL-DEMOCRATIC ALTERNATIVE PARTY FOUNDED, PRESIDENT ZHELEV AMONG FOUNDERS

[10] STAGE OF DON PROJECT COMPLETED

[11] PRIVATIZATION SODI SALE TO BE SIGNED IN EARLY DECEMBER

[12] FOREIGN COMPANIES INTERESTED IN BULGARIA'S GOLD FIELDS

[13] TRADE SURPLUS IN 1996

[14] ECONOMIC ENVIRONMENT FOR SMALL BUSINESS

[01] BULGARIA FULL W.T.O. MEMBER AS OF TODAY

Entering the WTO Bulgaria gets a chance to be an equal partner in international trade which in turn opens up an opportunity to start negotiating for accession to the Central European Free Trade Agreement, Bulgarian Trade Minister Atanas Paparizov yesterday told an interviewer of the Bulgarian National Radio. The country has already signed free trade agreements with the Czech Republic, Slovakia and Slovenia and negotiations to that effect are underway with Poland and Romania.

Reduction of customs duties for some imported goods and duty- free import of other as of next year are some of the steps Bulgaria is committed to take as WTO full member. The customs duty for 263 industrial goods must be reduced to under 35% as of today, BTA was told by Yuliana Nikolova of the Industry Ministry International Integration Department.

The customs duty for some types of pulp will drop to 5-0% and the Industry Ministry will demand that as of next year pulp be imported free of duty. There will be a pronounced markdown of customs duty for jewelry, bottles and jars for the food processing industry; machines for the mining industry and medical equipment will be imported free of duty. As of today, no customs duty will be charged for wool while fresh and tinned fish, among others, will be imported at lower duty.

Quotas have been allocated for duty-free import of 83 tonnes of quality beef, 42 tonnes of pork at 15% duty, 83 tonnes of cheese and curds at 17% duty, as well as low-duty import of chocolate and haricot beans, among other goods. The quotas are valid only for the December 1-31 period.

In compliance with Bulgaria's obligations as WTO full member, the government last Thursday decided to drop the 10% charged on the taxable value of imported used cars. It also decided to appoint a permanent representation at the WTO as part of this country's representation at the United Nations and other Geneva-based international organizations.

[02] BULGARIA WANTS OBSERVER STATUS IN SCHENGEN GROUP

A meeting of EU interior and justice ministers with their colleagues of the EU-associated states from Central and Eastern Europe was held on Thursday in Brussels. Bulgaria was represented by Deputy Justice Minister Radka Yossifova and Paraskev Paraskevov, Secretary of the Interior Ministers.

On the agenda of the meeting were also issues concerning drug smuggling.

The Bulgarian delegation reported on the adopted National Drug Control Programme Drugs for the period 1996-1998, the implementation of the agreement for combat against organised crime and drug-trafficking in the framework of the Black Sea Economic Cooperation and about the different forms of bilateral cooperation. The meeting focused in particular on the progress of improving immigration legislation as part of the joint efforts to combat illegal immigration.

[03] UN THIRD COMMITTEE ADOPTS RESOLUTION ON BULGARIAN MINORITY

The resolution, adopted by the Third Committee (on social, humanitarian and cultural matters), calls upon the authorities in FR Yugoslavia to take urgent measures to protect the rights of persons belonging to the Bulgarian minority. The document also insists for respecting the rights of minority groups in Kosovo, Sandjak and Vojvodina. The resolution outlines the existing humanitarian and human rights problems in the post-war period in former Yugoslavia, and recommends measures to be taken by the countries in the region.

[04] U.S. AEROSPACE FIGURES VISIT BULGARIA

Dr Sega informed president Zhelev about the international programme for space exploration. It envisages the launching of an international space station into orbit and the building of a facility on the Moon by 2008 where astronauts will prepare for a mission to Mars. According to the programme, people should set foot on the red planet in 2016.

According to the American guests, Bulgaria can participate in space exploration by supplying space food and devices and conducting medical and biological research. President Zhelev said that a Bulgarian space greenhouse was being used on a US space station at the moment.

During the meeting with National Assembly Chairman Sendov the American guests dwelt on the most important moments in the US space research programme. The sides discussed the possibility of cooperation in this area. The meeting was attended by Prof. Boris Bonev, President of the Bulgarian Aerospace Agency.

Later today McLeod and Sega had a meeting with representatives of the Atlantic Club, politicians, diplomats and public figures.

[05] PRESIDENT ZHELEV: TODAY O.S.C.E. HAS MORE GLOBAL FUNCTIONS ON SECURITY MATTERS

"The OSCE underwent a serious evolution. When it was called Conference on Security and Cooperation in Europe, the two military blocs met to negotiate peace matters. Today the organization has much more global functions on security matters," the President said upon his departure for Lisbon. Dr. Zhelev expects that the forum will discuss security and security architecture, the responsibilities and the links among regional security systems.

The Bulgarian President believes it is also important to outline the priorities of the other European organizations as the OSCE is not the only one dealing with security: NATO, the Western European Union, the European Union and the Council of Europe, too, are competent on these matters.

"We are supportive of a development of the all-European process within the framework of the OSCE and believe that it gives ample opportunities for the Bulgarian national interests," Deputy Foreign Minister Irina Bokova said adding that "we stand by the position taken by President Zhelev and there are no differences on this matter".

[06] NUCLEAR ENERGY COOPERATION WITH RUSSIA

At a news conference today, Bulgarian Energy and Energy Resources Minister Roumen Ovcharov said that the sides had reached agreement not only on the remodelling and updating of Kozlodoui Units One to Four but also on the overall conditions for cooperation in atomic energy. Russia is providing 150 million US dollars for participation of its companies in a European consortium which is planning to remodel Kozlodoui Units Five and Six and to build a spent nuclear fuel storage.

Mr Ovcharov said the problem of spent nuclear fuel must be settled at a meeting of officials of the two countries' ministries in Moscow in mid- December. The transportation of nuclear fuel, not only across Russia and Bulgaria but also across Moldova and Ukraine, will also be arranged at that meeting. Bulgaria has already signed an agreement to this end with Romania, Mr Ovcharov specified. The final results of the testing of samples from Kozlodoui Unit One will be available early next month.

[07] BULGARIAN-MACEDONIAN TALKS ON TRADE LIBERALIZATION

At a meeting at the Macedonian Ministry of the Economy Kurpachev and his Macedonian counterpart Blagoi Petrusevski considered the possibilities for boosting bilateral relations in economy, banking and the construction of infrastructure projects of mutual interest. The sides stressed the necessity of liberalization of trade. Sofia and Skopje have already signed agreements to this effect with other partners.

The Macedonian side said it wants to establish free trade areas with all its neighbours. Bulgaria and Macedonia decided to specify the differences in the two countries' legislations which vary only in technicalities, according to the two parties' shared view. A joint expert group will be set up and it will draft a bilateral agreement on the establishment of a free trade area.

A two-day seminar was held at the Chamber of Economy of Macedonia with the participation of businessmen and economic managers from the two countries. The two parties arrived at the conclusion that commercial exchange between the two countries may be increased if the existing administrative barriers are overcome and agreements on economic cooperation, on the avoidance of double taxation and on mutual protection of investments are urgently signed. The sides evaluated as abnormal the drop in the commercial exchange which last year alone fell from 400 million US dollars to 100 million US dollars.

A seminar on the problems Bulgaria and Macedonia encounter in the transition to market economy took place at the Macedonian Academy of Sciences and Arts. The participants discussed common and specific problems in the restructuring of the two countries' economies. Bulgarian experts noted as major problem for Bulgaria hyperinflation and the Macedonians - unemployment which is the highest in Eastern Europe.

[08] BULGARIAN, YUGOSLAV DEFENCE MINISTRIES SIGN COOPERATION PLAN

[09] LIBERAL-DEMOCRATIC ALTERNATIVE PARTY FOUNDED, PRESIDENT ZHELEV AMONG FOUNDERS

Among the founders of the Liberal-Democratic Alternative (LDA) are politicians, outstanding intellectuals and journalists. Boris Gulubov, a professor of chemistry at the St. Kliment Ohridski University of Sofia, was elected LDA Chairman.

There is room for a new party in the political space of Bulgaria, for an alternative to the status quo in politics, President Zhelev said upon the LDA founding. He believes that the model of transition adopted with the 1991 Bulgarian Constitution, is essentially wrong and has exhausted itself. He said that his idea is proven by the fact that after seven years of democratic government the International Monetary Fund is proposing a currency board that will influence directly both economy and politics. Dr. Zhelev, who emerged an ardent advocate of the presidential republic about an year ago, said that Bulgaria needs both new personalities and a new form of government.

A presidential republic or a republic with strong presidential powers will help the country get out of the grave crisis and complete successfully the reforms, said novelist Georgi Mishev, also a LDA co- founder.

The LDA will work for the adoption of a new electoral law based on the majority principle and new modern laws on referenda, local government and government employees. The founders stressed that setting up the LDA they seek to offer an alternative to the status quo closely guarded by the proponents of the bipolar model. In a declaration of intent the LDA says it will try to create a broad public movement for amending the Constitution, holding a referendum to decide on the presidential republic and summoning a Grand National Assembly to vote the change in the form of government.

[10] STAGE OF DON PROJECT COMPLETED

"The western optic fibre ring is one of the largest telecommunication projects ever realized in Bulgaria. It allows the transmission of high- quality voice, picture, data and multimedia," BTC Chairman Mihail Danov said at the opening ceremony. The implementation of this project is an example of good economic cooperation between Bulgaria and Great Britain, said British Ambassador to Bulgaria Roger Short who also attended the opening. Mr Short wished successes in this area in the future.

The optic fibre cable of the ring was supplied and installed by a consortium of the Nortel and Pirelli British companies. A number of Bulgarian companies, including Telecomplekt-Sofia, Teleco Consortium, Montazhi Inc., took part in the building up of the system. The western optic cable ring covers a 818 km-long section in Western Bulgaria. The cable is 840 km long. It links 26 population centres in the country, including Sofia, Pazardjik, Plovdiv, Haskovo, Svilengrad, Stara Zagora, Kazanluk, Gabrovo, Veliko Turnovo, Lovech, Pleven, Vratsa, Montana, Kostinbrod and others. The Stara Zagora-Veliko Turnovo section was built by Alkatel.

The system comprises 12 digital exchanges of which 7 are transit, 4 local and one international. An atomic clock installed in the international digital exchange based in Sofia provides stability of the voice transmitted. The cable has 24 optic fibres. The equipment in the central and multiplex facilities are supplied by Siemens and Ericsson.

According to Pirelli and Nortel representatives, the western optic fibre ring is one of the largest modern digital systems in Europe. It can be used to transmit international traffic.

[11] PRIVATIZATION SODI SALE TO BE SIGNED IN EARLY DECEMBER

The technical parametres of the deal were coordinated last week, Deputy Prime Minister Gechev said. Ten percent of the amount will be paid on signing the deal, the rest of it is payable within a month's time, Gechev said. Bulgaria invested about 260 million US in the construction of the Sodi chemical works. The Deputy Prime Minister pointed out that its privatization would not disrupt supplies to Sodi's consumers in the country.

Gechev described the contract for Sodi with the US company as the largest single successful privatization deal. In his words, the negative reactions on the part of certain circles alleging in the Bulgarian press that Sodi has been sold for a song and that the US company will not be able to meet the payment are "undisguised anti- Government policy". Roumen Gechev stated expressly that the deal does not harm Bulgaria's national interests.

[12] FOREIGN COMPANIES INTERESTED IN BULGARIA'S GOLD FIELDS

Apart from oil, major international companies have recently been showing interest in Bulgaria's ore occurrences as well, and above all in the gold fields. Concrete intentions are being expressed for conduct of feasibility studies, prospecting and exploration work, formation of joint ventures and investments in the order of millions of US dollars, Mr Kalaidjiev said. He specified that new prospective terrains and shows of gold and gold-silver ores have already been identified. The eastern part of the Rhodopi Mountains (South Central Bulgaria) show the best prospects for the time being, with gold reserves of over 200 t of metal proven so far.

Mr Kalaidjiev said that the findings of a second drill of the gas field off Capa Galata (in the Black Sea shelf) will be announced before the end of the year. The data so far suggests a diurnal gas discharge similar to that in the first drilling, i.e. some 1 million cubic metres. By international standards, the deposit will most probably qualify as medium-large in reserves.

The Committee of Geology and Mineral Resources has drafted a Subsoil Natural Resources Bill which will be submitted to the Council of Ministers shortly, reporters learnt at today's news conference. The adoption of a modern law on the matter will attract foreign investment, considering the keen interest which foreign companies take in Bulgarian mineral deposits, mainly of precious metal ores, non-metal resources and rock facing, Mr Kalaidjiev said.

[13] TRADE SURPLUS IN 1996

The drop of Bulgarian exports is not tangible. Compared with last year the decrease is 100-150 million US dollars. Bulgaria exported goods of 3,288 million US dollars' worth and its imports equalled 3,122,500,000 US dollars.

Chemical products accounted for the largest share of exports and the share of ferrous metals was reduced by two percent. The EU countries are Bulgaria's largest market with a share of 40.3 percent. Bulgarian exports to Russia account for 19 percent of total exports and 29-30 percent is the share of Russian imports in Bulgaria, which runs some 300 million dollars' worth trade deficit with Russia. This tendency is alarming considering that the Yamburg agreement expires in late 1996 and after that Bulgaria should have to buy natural gas at international prices, the Bulgarian Trade Minister said. Negotiations on additional export of Bulgarian goods to Russia are under way, Paparizov added.

[14] ECONOMIC ENVIRONMENT FOR SMALL BUSINESS

Addresses to the participants were made by President elect Peter Stoyanov; John Tenant, Head of the US Agency for International Development Mission; Rose Likins, Charge d'Affaires of the US Embassy in Sofia; and Ognyan Shentov, Director of the Center for the Study of Democracy.

Kiril Velev, economic adviser to President Zhelyu Zhelev, presented a report that commended specific changes in the economic policy and the legislation to promote small business. No policy of encouraging small business has been formulated so far, Velev said. He cited a World Bank source that the involvement of Bulgarian entrepreneurs in corruption rings is rather a question of survival than of making higher profits. Small and medium-sized business can be promoted by appropriate legislation and appropriate tax and administrative policies. Velev suggested the establishment of a state agency for the encouragement of small business and activation of crossborder cooperation.

In the opinion of Gancho Ganchev, President of the Agency for Economic Coordination and Development, if a currency board mechanism is applied successfully, small businesses will operate in better conditions because there will be stable prices and better opportunities for saving and investment.

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