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Competitiveness and investments

The President of BCCI Tsvetan Simeonov took part in the first meeting of the Economic Development and Social Policy Council with the Administration of the President of the Republic of Bulgaria






 
The President of BCCI Tsvetan Simeonov took part in the first meeting of the Economic Development and Social Policy Council with President Plevneliev and presented a Position-paper. The full text is available below:
DEAR MR. PRESIDENT,
The Bulgarian Chamber of Commerce and Industry (BCCI) would like to express the following position with regard to the materials for discussion on theme “Competitiveness and investments”:
We reckon that Bulgaria’s position in international classifications concerning competitiveness is not satisfactory and therefore all discussions dedicated to this theme are always useful because they help elaborate purposive and efficient actions and policies. 
The main reasons for the unsatisfactory position are not only related to the effects of the global crisis on Bulgarian economy, but also to some flaws of our system, which have had their impact (Appendix 1). 
There is no need to reach consensus on the choice of priority sectors. The idea to promote certain sectors of economy is not an equitable solution. In this case, questions are raised as to what the attitude towards the other sectors of economy which are not considered priority would be. Instead, it is necessary to create conditions which would increase the general attractiveness for businesses. 
Sectoral policies, supported by the state are not sustainable in their character. Investors bear responsibility for their activity and when profitability from the made investments is below their expectations, they must look for other solutions. Therefore, sectoral policies must be confined to specifying which the sectors with successful investments are and promoting them. 
The idea for sectoral development must be initiated by the local authorities according to the specific resources available in the various villages and towns, but doesn’t need to be promoted at national level. The priorities of Bulgaria’s National Development Programme 2020 include precisely activating the specific potential of regional and local economies. 
Clusters as an organizational form are a great idea, but need to be established on the initiative of the investors or sectorial organizations.
Quickly reducing insurance thresholds is an important measure for attracting not only large investors, but also SMEs. In this line, BCCI supports the development of industrial zones and believes that zero corporate income tax in municipalities with high unemployment rates must be more actively promoted in order to attract more investments in them. In Appendix 2, BCCI also proposes measures for growth and improvement of competitiveness. 
Education and training must be bound with the needs of businesses, but also should encourage entrepreneurial skills and attitudes in young people of the earliest possible age.
Yours sincerely,
TSVETAN SIMEONOV
BCCI President
Appendix 1
Survey of BCCI (October 2011) concerning the problems faced by companies in the course of their activity: 
o The largest number of companies – 81,5% complain about the slow administrative services as a problem they have encountered;
o Secondly, companies specify the lack of qualified labour force – 64,2% of the participants in the survey;
o Corruption and unfair competition from companies in the grey sector of economy are pointed out by the same percentage of companies, participating in the survey – 60,4%;
o 58,5% of companies say that they had difficulties finding financing;
o 52,8% of businesses faced obstacles when starting to execute activities under EU projects;
o 50,9% specify as a problem they have encountered the joint liability they have born because of other inaccurate companies;
o A lot of companies (41,5%) say that late payments from the state are also a problem, but it is important to bear in mind here that not all of the surveyed companies have contracts with public institutions.
Appendix 2
A survey of BCCI held in February 2012 found out that Bulgarian companies expect a growth in economy as a result of the improved business climate and increased competitiveness of companies, while observing the following 10 most important measures:
1. Maintaining the corporate income and personal income tax rates and not allowing their increase under foreign influence;
2. Accelerated VAT recovery;
3. Reducing the number of regulatory regimes;
4. Shorter terms for payment of obligations of the state towards companies under signed contracts.
5. Increasing the number of services provided by the state and municipal administrations electronically, including electronic filing of documents and reports for EU projects.
6. Reducing administrative fees and providing arguments when determining their size, while applying the approach that the fees must be just enough to cover the expenses made for the provision of the services.
7. Effective battle against corruption – taking preventive actions and restricting the possibility of public officials to take decisions at their own discretion.
8. Simplifying procedures under EU Operational Programmes. Accelerated payment of the sums due under Operational Programmes to beneficiaries, accelerating existing and launching new schemes. 
9. Property (personal and institutional) responsibility for public officials who have failed to respond in time to complaints, appeals and inquired filed.
10. Removing the administrative increase of the minimum insurable income in the sectors for which no agreement has been reached. 

03.05.2012

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