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Belgium in Bulgaria: The view from Brussels

Author: Clive Leviev-Sawyer Date: Fri, Jul 17 2009 26015 Views
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One of the most important aspects of Belgian investments in Bulgaria is that companies with long-standing involvement in the country have chosen to make investments anew, says ambassador Marc Michielsen.

Belgian has a long and proud history of involvement in Bulgaria, dating back to the late 19th century when it reached out in Europe as one of the first and foremost industrial powers. Belgium was among the first countries to recognise the Bulgarian state, in 1879, meaning that this year the two countries celebrate 130 years of formal relations.

Among Belgian investors, there is an appreciation of the advantages of Bulgaria – this country’s strategic location, and relatively affordable labour costs coupled with an educated skills base that boasts crucial specialisations such as information and communication technology.

In an interview with The Sofia Echo, Michielsen tells just one of several stories that illustrate the potential of Belgian-Bulgarian co-operation.

About seven to eight years ago, an entrepreneur came to Bulgaria with a view to specialist production of electronic circuits. Drawing on local skills and the ability to get quality work while facing a salary burden less than that he would have faced in Belgium, the entrepreneur has seen the business grow to the point where he employs 100 people in Bulgaria and 13 in Belgium – a scale that the operation might not have achieved had it been attempted in Belgium only, Michielsen says.

The interview took place amid days of change as Bulgaria prepared for a newly-elected government.

Asked about Brussels’s perspective on this change in terms of bilateral relations, Michielsen said that he did not see it as the government of Belgium that was "waiting for change" because the question had to be seen in the context of Bulgaria’s membership of the European Union.

He referred to the European Council meeting’s conclusions in December 2006, on the eve of Bulgaria’s accession, that the member states welcomed Bulgaria as an EU member, but they said that there were some shortcomings to be dealt with.

Dealing with these shortcomings was taking place under the Co-operation and Verification Mechanism (CVM) by the European Commission and Bulgaria. Progress was required, according to the European Council conclusions, in rule-of-law and in combating corruption and organised crime.

The reports from the European Commission that had emerged so far showed that progress is still needed and said what Bulgaria had to do.
"Linked to this, of course, is also the utilisation of EU funds. I think that it is the expectation of the European taxpayer that this money will be used, to quote a term from Roman law, in the way of a bonus pater familias ("the good head of household"), which, in modern terms, you could call good governance."

Asked about the perceptions of Belgian investors towards Bulgaria in the context of the financial and economic crisis, Michielsen said that Bulgaria was seen as a place of interest, even amid an economic crisis of a scale not seen for decades; Bulgaria is part of the EU, it is not too far away from Belgium, and in the context of globalisation, Bulgaria is well-placed to serve the needs of Belgian business people.

"Everybody knows that in Belgium, on the one hand, salaries are about the highest in the world, productivity too – which is why we are still surviving – but if you want to continue to do business, you have to look for new markets and to make your goods more competitive.

"Bulgaria is interesting for business people, to ‘de-localise’ parts of their business to Bulgaria, especially because here you find qualified people, companies of standards matching the hi-tech of Belgium. ICT companies come here because Bulgarian universities are at a level that the students are suited to their needs."

This creates a win-win situation, Michielsen says – telling the story about the entrepreneur’s success.


In the long run
In the long run, Bulgaria being a member of the EU and knowing the philosophy of the EU internal market, which is to try to narrow down the differences between the respective economies, within 10 to 15 years Bulgaria will join the middle range of economies and even move up from there.

He cites the example of Ireland as a country that ascended economically in this way.
Apart from being Belgium’s ambassador in Sofia, Michielsen is also accredited on a non-resident basis in Skopje, Tirana and Pristina.

"This embassy is a kind of regional embassy. When I receive Belgian business people, they not only ask me about how good it is to do business in Bulgaria, but also ask, ‘can we export to neighbouring countries?’ They see destinations as regional hubs, and if you look at geography, Bulgaria is well situated to be just such a regional hub."
Noting EU large-scale regional projects such as Corridor VIII and Corridor X, Michielsen says that when these projects are fully implemented, this will enable Bulgaria to fulfill its potential as a regional hub.

"I drive almost once a month to Skopje, but if you see how long it takes to do those 200km or so…the day that you have a good road connection from Sofia to Skopje, and then from Skopje a good road connection to Tirana and Durres; when the same happens from Nis, Belgrade to Skopje and then from Skopje to Athens, this will be an enormous stimulus for economic development in the region."

He believes that leaders in the region understand the need for these connections, road and rail, to be completed.
Michielsen notes that there have been transitions in Belgian business engagements in Bulgaria, in part through global trends as some companies that started out as Belgian changed hands to be part of other nationalities’ ownerships.

He adds that some of the major Belgian investors, including Interbrew and Solvay, are continuing with their investment programmes even in these difficult times.
Michielsen says that medium-sized and smaller companies have come too, and while they may be less prominent, they are very important because of their potential for growth.
SMEs, he believes, are the real backbone of the Belgian economy.

"The fact that those companies are exploring other markets and some of them are now entering Bulgaria is a very good development. The economy of a country needs different kinds of enterprises, not only big ones. You cannot have a good viable economy with only big players, you need different layers to have a well-functioning economy and an economic network."

He emphasises that this mindset, of staking the future solely on big players, is not present in Bulgaria.
However, there are important players in the finance industry that are Belgian. KBC, owner of DZI and EIbank, is present directly while Dexia is present via its regional operation in Austria.


The social field
Belgians are also closely involved in Bulgaria in the social field, assisting in areas from care for the physically and mentally challenged through to bilateral co-operation in health care.

The British documentary that showed conditions in Bulgaria’s Mogilino facility struck a chord when it was shown in Belgium, galvanising work by an NGO, Save the Children, that is currently sponsoring and working on about 10 different projects in Bulgaria.

"They work very, very well with the local partners," Michielsen says.
The Belgian involvement started well before the Mogilino documentary.

He adds that recently, he visited a project in Batak started by a Belgian NGO in 2002. This project has seen a change from the old-era practice of isolating people in need of care from public view. By 2004, matters had progressed to a small centre being opened in the town of Batak, enabling people from the centre to be part of the life of the town, and even have light jobs.

The mindset of isolating people had also been seen in Belgium a long ago, but the country’s change of approach had spawned experience that could be shared to the benefit of others.

"This is only one small example, but in the social field, you have more general examples of co-operation between Belgium and Bulgaria."
Bulgaria’s  national centre for social  rehabilitation has been co-operating since the end of the 1990s with Belgium’s federal government and the Flemish community government, with the latter passing on skills and expertise.

Since 2000, money from the Flemish community has supported a centre for people with disabilities in Pomorie. "Now, in 2009, this centre is working independently, but if you visit it or just saw photos, it would be difficult to figure out whether you are in Belgium or in Bulgaria."
Standards had been maintained from the beginning, he says.

Michielsen says that he has also visited a day centre of the national centre for social rehabilitation in Burgas where children with disabilities are given care and treatment either full-day or for some hours of the day, for example speech therapy. This was, in the beginning,  also a Flemish-funded project and is still doing excellent work.

He says that one of the criteria for proposed projects to get funding is whether they are sustainable, with the embassy playing a role in contributing an opinion.
Another good example of co-operation involved a hospital in Belgium and the regional hospital in Gabrovo, with the latter receiving equipment, from specialist equipment to beds, and with skills transfers.

Nurses from Gabrovo spend some months with their counterparts in Belgium, learning Belgian practices and standards, and this in turn progressed to the involvement of surgeons and doctors, with doctors going to the Belgian partner hospital to broaden their experience and with, to give the most recent example, a Belgian urologist coming to Gabrovo to practise in the town’s hospital.


Brewing co-operation
Like the financial sector, the brewing business in Bulgaria also has a significantly large foreign participation, of which one is Belgian’s Inbev. Not to forget Belgian beer importers and a Belgian Micro brewery in Triavna.

Inbev’s involvement, Michielsen says, has helped produce beers of technical standards and quality to keep contemporary consumers satisfied. Overall, the brewing industry in Bulgaria maintains high professional standards and is an impressively "clean" business: "there are no dirty tricks among the companies," he says.

Along with ambassadors from other countries that are involved in breweries in Bulgaria, he attended an event in which brewers stood together against drunken driving.
With a Belgian’s expert taste in beers, although he generally only samples it in summer but prefers wines with meals in winter, Michielsen says that he is impressed by standards, and – apart from Belgian-backed products, was favourably struck after a tasting of the local product at Veliko Turnovo’s independent Bolyarka brewery.

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