News from Bulgaria / Apr 9, 96

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

Bulgarian Telegraph Agency Directory

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

9 April, 1996

CONTENTS

[01] BULGARIAN AMBASSADOR IN RUSSIA DELIVERS A VERBAL NOTE

[02] BULGARIA HAILS NORMALIZATION OF YUGOSLAV-MACEDONIAN RELATIONS

[03] HEADS OF STATE and GOVERNMENT EXPECTED TO EBRD MEETING

[04] BULGARIAN GOVERNMENT TO PRESENT REPORT ON ENHANCED DIALOGUE WITH NATO

[05] COUNCIL OF MINISTERS DECISIONS

The cabinet sitting adopted an ordinance regulating the duplication and distribution of sound and video recordings. The ordinance is aimed at harmonizing the Bulgarian and European legislation in this field. It is consistent with Bulgaria's commitments under the 1961 International Convention for the Protection of Performers and Producers of Phonograms and Broadcasting Organizations, known as the Rome Convention, and the 1971 Convention for the Protection of Producers of Phonograms against Unauthorized Duplication of Their Phonograms, known as the Geneva Convention, both of which Bulgaria ratified last year.

The ordinance introduces a specific mechanism for the implementation of the effective legislation in this field. Under the approved rules, contracts awarding a right for the duplication and distribution of sound and video recordings should be registered with the Copyright Department of the Ministry of Culture. The ordinance also regulates the rights of those who concede copyright for the duplication and distribution of phonograms and those who take over a copyrights. Foreigners conceding copyright for the distribution of phonograms, too, should register with the Ministry of Culture. Access to the copyright registers will be free and they will be open for reference. Persons who own facilities for duplication of phonograms should also register with the Ministry of Culture.

[06] BULGARIAN GOVERNMENT REGRETS ROVER'S FAILURE

During the one year of its existence, the Rodacar plant assembled some 2,200 Rovers selling a mere 200 of them, according to figures of the company. The business plan envisaged that the 1997 output reach 10,000 cars. Deputy Prime Minister Gechev dismissed accusations that the Bulgarian government is responsible for the decision of Rover Group. Nothing in Bulgaria's foreign investment legislation has changed from the time when Rover Group came to Bulgaria, said Gechev. With no action or inaction did the government change the conditions under which the joint venture started operating, he said. 'We regret that the project failed as it is not only a failure for the joint venture but for us as well," said Gechev. The Bulgarian partner in the joint venture, Daru Car, practically ceased to exist after the Bank for Agricultural Credit, faced with serious troubles, suspended the financing of the project. This alone is sufficient for closing down the partnership, said Gechev. According to Gechev, whose view is shared by the British company, one of the major causes for the problems with the production of Rover in Bulgaria is the difficult, if not impossible selling of the product on the Bulgarian market. Costing nearly 650,000 leva (some USD 8,200 at the current exchange rate), the model is too old and inviable and there is no demand for it in Bulgaria.

The suspension of Rover Group's business in Bulgaria is not an isolated case, according to the Confederation of Independent Trade Unions in Bulgaria (CITUB) which is one of this country's two major labour organizations. CITUB believe the decision of the British company is symptomatic of the aggravating economic conditions in Bulgaria and other foreign investors here will soon follow suit. According to CITUB, the major reason for what has happened is the high tax payable on the import of parts and components and the unfair competition.

Rodacar blackmailed the government with a weak project, the popular "Capital" weekly wrote today. According to this daily, the British car manufacturer wanted from the Bulgarian government what it has been denied by the Thatcher government. "Rodacar's idea was to sell its cars to government institutions, in other words to get Bulgarian taxpayers financing the British carmaker," the story reads further. "It is preposterous to expect the Bulgarian government to offer market support to the company," Gechev said today. Rover is not withdrawing completely from Bulgaria, according to Gechev. It could launch other projects. Meeting Rover officials last week the government voiced readiness to help the British company find another Bulgarian partner, including a state-owned company. According to Gechev, Rover is interested in cooperation that would minimize the risks accompanying production. Another way of boosting joint businesses in Bulgaria is through the contemplated reduction of duties for the import of parts and components for products assembled in Bulgaria, Gechev also said.

[07] FOREIGN INVESTMENT WILL EXCEED 1,000 MILLION LEVA

According to Gechev, the dynamics of foreign investment in January-March is almost two times higher than the average one for 1995. The amount of foreign investment in the first three months of 1996 is the highest since the start of the reform in Bulgaria, he stressed. According to Gechev, there has been a growing interest recently towards the Bulgarian financial sector and the banking system. Investments in financial institutions amounted to more than USD 11 million, or about 20 per cent of the total investment in January-March. With 35.5 per cent of the total amount of investment in Bulgaria Germany tops the list of foreign investors, followed by the Netherlands - 10.7 per cent, Switzerland 6.3. per cent, and Belgium - 7.1. per cent. The bulk of foreign investments went to industry - USD 258 million, followed by trade - USD 112 million, transport USD 68 million, finance - USD 51 million and tourism - USD 44 million. Direct foreign investment in Bulgaria since 1990 totals USD 578 million, while direct and indirect investment amounts to USD 900 million. Taking into account the preliminary applications made by foreign companies, foreign investment in Bulgaria in 1996 is expected to total USD 1,200 million.

[08] BULGARIA, LITHUANIA TO SIGN FRIENDSHIP and COOPERATION TREATY

[09] PROF. YUHNOVSKI ELECTED ACADEMY OF SCIENCES PRESIDENT

The newly elected BAS President believes it is important now that research institutes, production units, business circles and society pool efforts for the development of fundamental and applied science in the conditions of the transition. According to him, the Academy should attract more young researchers. An academic centre for PhD course trainees is due to start operating with the Academy by year's end. "It will be good if each of the 1,600-plus degree-holding scientists at the BAS take over the training of at least one PhD course member," said Prof. Yuhnovski. A total of 260 young researchers have entered PhD programmes at the BAS. The BAS President believes it is essential for the Academy to address its financial problems to ensure its normal functioning.

The 59-year-old Yuhnovski has been working at the BAS since 1963 and was appointed its vice president in 1989. He is member of the Presudium of the Supreme Commission for Academic Awards and chairs the National Fund for Scientific Research. He is also member of the Nobel committee on chemistry and the US-based International Scientific Foundation. Prof. Yuhnovski's 32-year research career is linked with the BAS, its Institute of Organic Chemistry and the centre of photochemistry operating with it. He founded a laboratory on structure organic analysis with the Institute and in 1989 was appointed its chief. Prof. Yuhnovski was awarded a PhD in 1982, became a Professor in 1984 and BAS corresponding member in 1989. He is the author of over 135 research papers, including a series of monographs on Chemistry of Functional Groups. He holds 18 copyright certificates and 15 of his inventions have been implemented in industry. Prof. Yuhnovski is winner of the Honorary Inventor and many other national awards.

[10] BULGARIA'S ECONOMIC MODEL NOT CLEAR?

"Through GF we have prospects for unlimited contacts with potential foreign investors," Mr Katsanis said. "We not only mobilize capitals, but also coordinate the activities of other investors, so that we can raise more money than we alone can invest in the enterprise," he adds. Together with another three deals whose signing is upcoming, the total financing for Bulgaria provided by the GF will amount to 7 million US dollars," Mr Katsanis emphasized. "The European Commission nominated the GF to act as mediator in investing funds, granted by the EU under the PHARE programme," Mr Katsanis said. In his view this will practically double the amount of capitals on the different projects.

"The GF shows considerable interest in the process of mass privatization in Bulgaria in two lines: the company may act as investment manager and in the post-privatization period it can meet the companies' needs for fresh capitals," Mr Katsanis says. In his view, if 65 per cent of one enterprise have been privatised by vouchers, the GF may pay the remaining 35 per cent.

"Despite the availability of all these prospects, however, it should be taken into consideration that Bulgaria is still a country difficult to invest in, because the rules of the game are not clear," Mr Katsanis believes. In his view it is not difficult to see a chaotic tax legislation and banking system. He believbes that until an agreement is signed with the IMF, the investment risk in Bulgaria will remain sserious. "The weakness of the private sector in Bulgaria is easily seen, but the state's strength in pursuing some definite policy is not observed," Mirolyub Voutov, Director of GF's representation office in Bulgaria said, also interviewed for "Pari".

[11] PROSOFT RAISES CAPITAL

[12] MONDAY NEWS BRIEFS

Foreign Minister Georgi Pirinski today issued an order warning Bulgarian Ambassador in Britain Stefan Tafrov of his dismissal, Foreign Ministry Spokesman Pantelei Karassimeonov said. The order was prompted by Tafrov's third coming to Bulgaria without the Ministry's permission, the ambassador's systematic breach of the working discipline and of the Labour Code. The Ministry reserves the right to introduce more stringent measures if Tafrov commits another breach of discipline, Karassimeonov said. Pirinski issued a similar order to Bulgarian Ambassador in Cyprus Alexei Podlesni.

The Foreign Ministry has received seven approvals of ambassadors' appointments, Foreign Ministry Spokesman Pantelei Karassimeonov today said. Future ambassador in Switzerland Professor Todor Vulchev also received an approval. It is not clear when Vulchev will depart for Switzerland as the President is yet to issue a decree relieving Elena Kircheva of her post as Bulgarian Ambassador to Bern, Karassimeonov said. He went on to say that according to information in the Swiss press, Kircheva plans to give a news conference in the Bulgarian Embassy on Wednesday during which she is expected to strongly criticize the Bulgarian Foreign Ministry and the Cabinet.

The President was presented a list of 11 future ambassadors. Three European countries are yet to confirm the approval of Bulgarian ambassadors: the Netherlands, Belgium and the Czech Republic, Karassimeonov said.