Bojidar Loukarsky: We have the ambition to introduce e-tenders by the middle of 2015

A third package of measures for lighting the administrative burden to reduce costs for companies by BGN 113 million is under preparation

Mr. Loukarsky, what are the main priorities in your work this year?

The overall aim of the Ministry of Economy is to contribute towards improving the business environment and reducing the administrative burden on business. The Ministry’s efforts will be directed towards conducting electronic public procurement procedures to ensure transparency and reduce corruption risk. Our ambition is to implement measures for the introduction of e-services package at the end of 2015. An important objective is to simplify the procedures for starting up a business.

Another crucial priority in the Ministry’s programme is encouraging small and medium enterprises. In this regard, the operation of our trade representative and Agency for Export Insurance will be strengthened to process exports and to improve access of SMEs to third country markets, mainly in Asia, the Middle and Far East and North America. Of course, OP “Competitiveness and Innovation 2014 – 2020” will be the primary instrument to support enterprises, whose approval by the European Commission is expected. We will ensure openness and transparency in the implementation of the operational program through a broad information campaign.

Our next major task should be to encourage investment in sectors with high added value. We will prepare changes in the Law on Investment Promotion, taking into account the specific features of individual sectors to improve the image of Bulgaria and encourage private investment in innovative enterprises. We will also work to improve the link between education, labor market and business through the implementation of the dual system, promoting entrepreneurship among learners and developing training firms in schools.

I am confident that the fulfilment of these priorities will result in increasing in competitiveness, accelerating economic growth and sustainable job creation, including areas with high unemployment, which will require advanced skills and will be highly -income. Particularly, it will motivate young people to stay in Bulgaria and to unleash their potential and skills.

You said that a focus will be placed on the work towards the development of small and medium-sized enterprises. How will you accomplish this?

I have repeatedly mentioned that one of the main goals of the Ministry is to stimulate SMEs, which are the backbone of the economy through providing access to finance and supporting their foreign markets uptakes. The measures being undertaken have been approved by the National Strategy for Promotion of SMEs 2014-2020.

Financial instrument to support the fast-growing small and medium-sized enterprises is under consideration. They represent about 6% of all SMEs, but contribute about 40% of the added value generated by SMEs. Here I would like to mention the compulsory SME testing in the legislative process. This is our main goal. It’s implementation is a key tool to improve the business environment.

I would like to draw attention to training for entrepreneurship even at school. Our goal is to introduce a new legal entity – training firms able to carry out business activities. This will bring the students’ preparation for entrepreneurship significantly closer to real business environment.

What are the possibilities of our country to make use of opportunities provided under from the plan “Junker””?

The basic idea is to provide more than € 300 billion investment aimed at creating jobs, growth and investment in the EU. At this stage, Bulgaria has proposed projects amounting to EUR 1.5 billion, which are mostly infrastructure ones. As far as we have commented with representatives of the European Commission, the aim is rather to drive private investment capital to innovative ideas in sectors with high added value, creating growth and jobs. In this respect, I think we need businesses to help us with projects related to science, innovation, technology, and thus as quickly as possible to include in the plan.

What measures will you take to facilitate the work of the private sector?

They will be directed at lighting the administrative services and reducing licensing and permits, of course, where they do not affect safety and health. Our ambitions is to assess the impact on the business type of benefit – cost whilst we are dealing with each legislative initiative or act. A third package of measures for lighting the administrative burden to reduce costs for companies by BGN 113 million is under preparation. We hope that the companies will be actively enrolled in this dialogue through employers’ organizations , which will be presented to the Council for Economic Growth, which activity will be recovered.

The regulations impact on small and medium-sized enterprises will pass through the so-called SME test, whose main purpose is to determine the potential effects of the implementation of legislation and regulations on them. The introduction of such a check as a mandatory element of the legislative process is one of the priority areas of the Small Business Act (SBA). The European Commission invites Member States to systematically assess the impact of legislation on SMEs using the test, taking into account differences in the size of enterprises, where appropriate. The Commission reinforces the burden of proving the need for special regulations on small-sized enterprises.

You mentioned OP “Competitiveness and Innovation 2014 – 2020”. There were some comments from the European Commission.

Its final version was officially submitted to the Commission s on 12December, 2014. Currently, there are no open questions regarding the text of the program, and we have been assured by the Commission that it will be officially approved within the first quarter of 2015. Meanwhile, the Managing Authority of OPIC has completed the necessary preliminary actions related to its launching.

A Committee for monitoring has been set up , an Indicative Annual Work Programme for 2015 has been approved, a methodology and selection criteria as well as a package of documents required for the approval of the first procedure planned to start in March 2015 are under preparation. It will focus on the improving the productive capacity of SMEs.

Is there a risk of losing money under the program for the period 2007 – 2013?

As of 31.12.2014, the total amount of funds agreed under OP “Development of the Competitiveness of the Bulgarian Economy 2007-2013” is of EUR 1,195 billion or nearly 103% of its budget. The total amount of funds disbursed is of EUR 904 million, or 78% of total funding under the OPDCBE.

The Managing Authority carries out continuous monitoring of the risk projects under the program, as no risk of losing funds has been identified up to now.

What should be done to increase foreign investment in the country?

Incentives that Bulgaria offers to foreign investors are competitive to the incentives of our neighboring countries with which we compete in attracting new money. In order to bring quality projects in Bulgaria, we should draw attention to investment marketing – presentation of our country as an attractive destination to potential companies in the target countries and sectors. We will develop a “Program for promotional initiatives and events”, which will be implemented by the InvestBulgaria Agency (IBA).

How will keep companies in the country?

Political stability and foreseeable economic environment are the most important for investors. The absence of currency risk and low taxes are good prerequisites for long-term settlement of companies in the country. The recent changes in the Implementing Regulations of the Law on Investment Promotion(IRLIP) adopted by the Council of Ministers, aim to reduce the administrative burden on investors. The work of the IBA will be intensified so that to turn Bulgaria into as a suitable investment destination.

Do we need other legislative changes?

The Ministry of Economy monitors proposals for changes in legislation relating to economic activity and investment process in order to create favorable conditions for business. A new strategy for investments is being developed. Following the recent amendments to the Law on Investment Promotion, an interest of international companies is increased. The amendments also resulted in significant decrease of the amounts required for issuance of a raised capital certificate through which foreign enterprises are able to obtain state incentives. New activities in the service sector to benefit from incentives under the LIP such as release of software, accounting and combined office activities, providing shared services (Call centers) have been included. The companies are permitted to recover the costs associated with social security of workers for a period of two years, or as a percentage of approximately 17.9% of gross salary of the employee.

What is the state position on Transatlantic Trade and Investment Partnership? How will it be useful for us, considering the visa regime with the USA?

Bulgaria, together with other countries – EU members, supports the negotiations for the conclusion of a single, ambitious and comprehensive agreement – Transatlantic Trade and Investment Partnership (TTIP) with the USA.

There are two tendencies, which Bulgaria follows in the conversations. As a first is the possibility for favorable and balanced agreement with the USA to ensure improved and expanded access of Bulgarian goods and services to the continent market, procurement procedures and commitments in other areas, attracting investments, reduction of non-tariff barriers to trade, convergence of regulatory approaches and facilitating the application of regulatory regimes to considerably ease the activity of commercial operators. The aim is also to ensure adequate protection of intellectual property rights, without leading to a reduction of high environmental, labor, health standards and the EU safety standards. Secondly, the TTIP will provide more political and economic weight of the EU, including Bulgaria as well, in view of a dynamically changing global system in which the impact of economic forces (especially in Asia) is growing very rapidly.

USA is among the Bulgarian top 20 foreign trade partnerships and is an important market for the internationalization of SMEs, which had a share of 99.8% of the total number of companies and provide 76% of jobs in Bulgaria. Their internationalization and involvement in the transatlantic trade is of priority for our country because our native economy is heavily dependent on foreign trade and the country has an interest to maintain a growth model based on export orientation and strengthening the competitiveness.

Regarding visa regime, I would like to say that this is a matter of utmost importance to us, and it should be listed s a priority among the relations – not only on a bilateral basis between the USA and Bulgaria, but also in the context of dialogue the EU – USA. The scope of the future agreement does not involve issues of visa policy. This does not mean that the Bulgarian side is not seeking and will not seek facilitating and abolishing visas for Bulgarian citizens to the USA. Visa waiver is a major precondition for Bulgaria to be equal to the other EU countries in the use of the potential and opportunities of the future agreement: the provision of goods and services, promotion of investment, implementation of direct business contacts and partnerships, cultural, educational, scientific, tourist and all other possible exchange with the USA.

When will the draft of a new Public Procurement Law be ready?

The deadline to incorporate the new directive in the field of tenders into national legislation is April 2016. The National Strategy for development of “Procurement” sector in Bulgaria for the period 2014 – 2020 and the plan thereto have been set for January 2016.

Currently, the activities relating to the elaboration of the draft version of the new framework Public Procurement Act are under completion and it shall be further be provided to the attention of all stakeholders for public discussion through the Portal for public consultation to the Council of Ministers.

Will the standard tender documents be introduced?

Yes, they are provided for in the National Strategy for development of “Public Procurement” sector. As far as the process of development and approval requires coordination and coherence of different departments and branch organizations, their gradual establishment is intended.

Will we keep the deadline for the introduction of e-tenders?

The Directive allows Member States to postpone the mandatory introduction of electronic procurement in respect of central purchasing bodies to April 2017 and to October 2018 for the other employers. Terms in the National Strategy are in compliance with EU requirements. Meanwhile, the Ministry of Economy implements a joint project with the European Bank for Reconstruction and Development, which will contribute to the introduction of electronic procurement. Our ambition is to introduce e-tenders to middle of 2015.

Will the administrative burden be reduced?

As I said, this is our top priority. European directives also contain a number of provisions aimed at reducing the administrative burden on businesses. Other benefits related to procurement assigned in compliance with the national thresholds are envisaged in the national legislation.

Bulgarian Construction Chamber is the largest professional organization. How will you run your interaction with it?

Undoubtedly, the BCC is our partner. I rely on active dialogue with all industry organizations. Therefore, the Ministry of Economy initiated the resumption of the Council for Economic Growth. My idea, and that of my team as well, is that to able the business to expose timely issues before us and together to find common solutions. Moreover, we are relying on proposals and projects by business to be implemented in Bulgarian economy.