1. ECONOMIC AND TRADE RELATIONS BULGARIA - KOREA
Korea - Bulgaria
2009
Your Excellency, ladies and gentlemen, I would like to present in few slides the economic and trade relations between Bulgaria and South Korea and will try to outline some of the sectors that are of mutual interest.
Bulgarian Chamber of
Commerce and Industry

2. Bulgarian Chamber of Commerce and Industry
Contents
Bulgaria and Korea – similarities and differences
Legal Base
Bilateral Trade
Investments
Perspective sectors for economic cooperation
Cooperation in IT
The role of BCCI
BCCI address
This is in short the content of my presentation today. I will present some of the facts about Bulgaria and Korea that are similar and will outline some of the differences in the economies of the two countries. I will go quickly through the legal base that contributes to the development of the economic relations. We will have an overview of the bilateral trade and the investments. Further on we will outline the perspective sectors for economic cooperation – what has been done and what could else be done to develop further the cooperation. I will stress on the It sector as a prosperous one. At the end I will explain shortly the role of the Bulgarian Chamber of Commerce and Industry in the promotion of economic relations.
Bulgarian Chamber of Commerce and Industry

3. Bulgaria – Korea similar and different
It is quite obvious that both Bulgaria and Korea are relatively small countries. What is different here is the number of the population. There is also difference in the GDP produced in the two countries. Economic growth in Bulgaria is stable reaching 6,3% in The Korean economy marks economic growth throughout the last 30 years. The average economic growth is kept around 8,6% per year. South Korea is number 11 in the world economy. Korea is a key economic partner for the European Union being on 8th place among its trade partners.
Area: 111,000 sq km
Population: 7.7 mln
GDP per capita: USD
Economic growth: 6,3% /2007/
Area: 98,480 sq km
Population: 48.3 mln
GDP per capita: USD
Economic growth: 5% /2007/
Bulgarian Chamber of Commerce and Industry

4. Bulgarian Chamber of Commerce and Industry
Legal Base - I
Agreement for avoidance of double taxation – March 1994
Agreement for removing visa requirements – July 1994
Agreement for cooperation between the Executive Agency for promotion of SMEs and the Korea Trade Investment Promotion Agency (KOTRA) – April 2002
Agreement for mutual protection and promotion of investments in power since18 November 2006
Agreement for cooperation between the Executive Agency for Trade Promotion at the Ministry of Economy and the Korea International Trade Association /KITA/– August 2002
Agreement for cooperation between the Bulgarian Branch Chamber of Machine building and the Korea Association of Machine Industry (KOAMI) – January 2003
The legal base between the two countries is exhaustive and determines the development of economic relations. There is an agreement for avoidance of double taxation since 1994, agreements for cooperation in investment field and for protection and promotion of investments since 2002 and 2006 respectively.
Bulgarian Chamber of Commerce and Industry

5. Bulgarian Chamber of Commerce and Industry
Legal Base - II
Agreement for cooperation in the field of IT and communication technologies – April 2003
Agreement for cooperation between the Bulgarian IT Association and the Korean agency for IT promotion – April 2003
Agreement for cooperation between the Bulgarian Export Insurance Agency and the Korean Export Insurance Corporation (KEIC) – July 2003
Cooperation agreement between the Bulgarian CCI and the Korea CCI - 1 October 2004
Memorandum of understanding for creation of a Committee for industrial cooperation between the Ministries of Economy of Bulgaria and Korea – in power since 28 March 2008
Agreement for economic cooperation signed on 30 October 2008 in Seoul by the Ministers of Foreign Affairs of Bulgaria and Korea
Several cooperation agreements in the field of IT, export and specific economic branches outline the good base for joint business.
Bulgarian Chamber of Commerce and Industry

6. Foreign Trade Bulgaria – Korea m USD
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
І-VІІ 2007
І-VІІ 2008
Export
22.2
24.6
9.5
8.1
6.2
10.5
14.1
12.8
20.1
36.4
38.2
9.6
34.9
Import
20.4
31.8
48.0
27.0
30.3
46.6
73.7
109.9
144.4
195.3
103.6
55.5
70.3
Total
42.6
56.4
57.5
35.1
36.5
57.1
87.8
122.7
164.5
231.7
142.8
65.1
105.2
Balance
1.8
-7.2
-38.5
-18.9
-24.1
-36.1
-59.4
-97.1
-124.3
-158.9
-64.4
-45.9
-35.4
Let me make an overview now of the bilateral trade between Bulgaria and Korea. The recession at the beginning of the period – 1997 – 1998 explains the drop of the turnover and the minimizing of the Bulgarian export to Korea. On the other side since 2001 the import from Korea rises gradually till In 2006 the turnover reaches record value – mil.USD.
Source: Ministry of Economy and Energy
Bulgarian Chamber of Commerce and Industry

7. Turnover Bulgaria - Korea
In 2006 the Bulgarian export rises 81%. In 2007 there is a decrease in the numbers with 39% that is due to the smaller import of goods from Korea. Still the perspective for this year is positive because there is an increase with 67% for the first 7 months in 2008 in comparison to the same period last year.
Source: Ministry of Economy and Energy
Bulgarian Chamber of Commerce and Industry

8. Main export and import items 2007
Export from Bulgaria
Import from Korea
Copper
Cars
Mollusca
Polyesters
Alluminium scrap
Refrigerators
Electrical transformers
Electrical instruments
Engines
Synthetic yarns
These are the top 5 items imported and exported between Bulgaria and Korea. For the last two years Bulgaria exports mainly raw materials and stuff – non-ferrous metals and textile material. We import from Korea mainly cars and consumer goods.
Bulgarian Chamber of Commerce and Industry

9. Investments in Bulgaria mln euro
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Total
137.3
570.2
605.1
866.0
1103.3
903.4
980.0
1850.5
2735.9
3152.1
5961.0
6108.9
South Korea
28.0
35.0
1.3
4.0
3.9
-10.2
0.4
-0.1
6.0
2.3
4.6
0.1
Till the end of 2001 Korea was the biggest Asian investor in Bulgaria being on the 15th place in the top investors list. In 2002 the investments fall down after Daewoo sold its shares in Sheraton and Interpred. The Korean company Hyundai Heavy Industries invested in Bulgaria 3.9 mln.USD in the factory Elprom trafo. At the moment there are over 550 employees working in the factory.
You could judge for yourself that this is just the top of the iceberg and there are great possibilities for the Korean investors in the IT sectors, communications, machine building, electronics, tourism in Bulgaria.
Bulgarian Chamber of Commerce and Industry

10. Bulgarian Chamber of Commerce and Industry
Investment Climate
Stable business and political environment
EU membership
Free trade with the EU preferential trade partners, including EFTA, Turkey, Mediterranean countries, Western Balkan countries, South Africa, Mexico, Chili, etc.
10% corporate income tax rate
VAT exemption on equipment imports for investment projects over EUR 5 million
Excellent climate, natural scenery, food and hospitality
These are only some of the reasons why Korean investors should do business in Bulgaria. I am sure that the colleagues form the Invest Bulgaria Agency will stress later on them.
Bulgarian Chamber of Commerce and Industry

11. Perspectives in the bilateral economic relations
IT Industry
Spare parts for cars
Textile
Environmental industry
Agriculture
Tourism
It is not a secret that Bulgaria is a gate for the European Union, being at its south-east border. I have listed here the sectors that are most promising in the bilateral relations. There is a great potential in the production of auto spare parts in Bulgaria as well as assembling on the spot. The experts in this field are numerous and a future joint work between Korean and Bulgarian companies will be beneficial for both sides. The capacity of the Bulgarian textile industry is well known and it proves itself all round the world with quality and reliability.
The environmental industry is among the top targets of all economies and we believe the expertise of the Korean companies in it will be of help.
The agricultural sector is traditional in Bulgaria and understanding the needs of the Korean market there can be mutual benefit too. We have information that in 2005 in Korea a yogurt production line was opened in the Mail Dairy Industry Corporation. So the start has been set up already.
Last but not least there could be cooperation in the tourism sector because both countries have a lot to offer – nature, culture and exotics.
Bulgarian Chamber of Commerce and Industry

12. Bulgarian Chamber of Commerce and Industry
Cooperation in IT
Long traditions in the IT and communication – liberalized telecommunication market and competitive IT industry
Over people employed in the IT sector
The average wage in IT companies in Bulgaria is two times higher than the average wage in the country
8.65 % share of IT sector in GDP (2007)
The average growth of IT sector in Bulgaria in the last 5years is 15 % - two times more that the real GDP growth
Fast developing external market of IT industry, which marks 57.7 % growth in 2005 and 63.6 % - growth for 2006
High gross profit of IT companies in 2007, reaching more than 0,5 bil USD
I believe all f you know that Korea and Bulgaria already cooperate in the IT sector. It 2004 the first Bulgarian-Korean Internet center was opened at the NDK. Recently a new Bulgarian-Korean Internet center with 58 computers was opened in the presence of the Minister of administration and security of Korea Von Sei-Hun and the Minister of state administration Nikolay Vasilev. The center is situated in the building of the State agency for information technologies and communications.
The potential of the IT sector in Bulgaria is huge. There are highly qualified experts in IT and communications. The world is getting smaller and smaller with the new technical solutions and outsourcing is one of the possible ways for cooperation between Korea and Bulgaria.
The share of IT in GDP in Bulgaria in 2007 is 8,65% and the profit in this field is high, reaching more than 0,5 bil USD.
Bulgarian Chamber of Commerce and Industry

13. The role of the Bulgarian Chamber of Commerce and Industry
Promotion of the international economic relations
Joined activities with Korea CCI
Equal services for Bulgarian and foreign companies
At the end I would like to explain the role of the Bulgarian Chamber of Commerce and Industry in the whole picture. We are cooperating very well with KOTRA, the Embassy of Korea in Sofia and of course with our partners from the Korean CCI. Our main goals are to promote the international economic relations and to foster joined activities. The policy of the BCCI states that we give equal service for Bulgarian and foreign companies.
Bulgarian Chamber of Commerce and Industry

14. The Bulgarian Chamber of Commerce and Industry
more than members
28 regional chambers
90 sectorial / branch chambers
good contact with the Government
“open doors” policy
What we are honored with are our members – more than companies, 28 regional chambers and 90 sectorial ones. We keep our doors opened for everybody that needs support and information in business.
Bulgarian Chamber of Commerce and Industry

15. Bulgarian Chamber of Commerce and Industry
Thank you!
Bulgarian Chamber of Commerce and Industry
1000 Sofia, Bulgaria, 9, Iskar Str.
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Web:
Thank you for your attention!
Bulgarian Chamber of Commerce and Industry