issue 25 / march 2020 InvestBulgaria Agency InvestBulgaria Agency March Bulgarian investment agency 2020 Economic news Edition 25, year 7 Sector analysis Interview Bulgarian chambers of commerce Macroeconomic indicators Online edition Upcoming events INVESTBULGARIA AGENCY OPERATIONAL MODE InvestBulgaria Agency conducts online meetings and consultations in the event of an emergency In fulfillment of the declared state of emergency in the country by an act of the National Assembly of March 13, 2020 and in order to protect your health and that of the employees of the Agency, for the period from 16.03.2020 to 13.05.2020, we introduce the following mode of communication with citizens and businesses in connection with the administrative services we provide: 1. INVESTBULGARIA AGENCY (IBA) is restricting the meetings with citizens and business representatives, while remaining available in a convenient way for you from the following: Online meeting platform „ZOOM“; Skype: live:.cid.fd540fb86f1ccf17; E-mail: [email protected]; Facebook /InvestBG/; Linkedin /InvestBulgaria Agency/; tel.: (+359 2) 985-5500. Instagram : investbulgariaagency 2. The administrative services provided by IBA will be accessible through the Secure Electronic Service (e- Service) system, which allows sending and / or receiving and storing electronic documents to / from public authorities, individuals as well as legal entities. This will replace the classic method - mail delivery. The system is available at: https://edelivery.egov.bg/. The access will be available after registration with your identification info (Qualified Electronic Signature (QES), NSSI PIK and others, adopted by a state act). For the period of the introduced state of emergency INVESTBULGARIA AGENCY will accept electronic documents, signed with QES and sent through the e-Handing System. This will be processed, and after the restraining measures abolished, they will be requested in paper form to comply with the regulatory requirements of the procedures. Applications and declarations are available at: https://iisda.government.bg/adm_services/services/from_central_administrations?search=1&subSectionId=935 Please send us the additional documents required for the provision of the respective administrative service, as electronic documents and / or scanned files again through the above system. Thank you for your understanding! page 1 fom 20 InvestBulgaria Agency (IBA), Vrabcha str. 23, Sofia 1000 Tel.: (+359 2) 985-5500 e-mail: [email protected], http://www.investbg.government.bg issue 25 / march 2020 InvestBulgaria Agency ANALYSIS THE “ECONOMY IN CRISIS” SEQUENCE PART 1 We live in peculiar times, times in which the moment has come for us to deal with great problems, to deal with huge economic challenges and worldly tragedies. Times of fear and uncertainty. The major European economies are experiencing dislocations, which is potentially a great opportunity for Bulgaria as an investment destination. Many global manufacturers could choose Bulgaria as their destination for new investments, thanks to the lower costs they would incur to grow their businesses and escape the crisis. As the virus spreads and countries take respectable measures to limit to some extent production activity in their regional centers, we can offer competitive conditions for development and sustainability. As a result of a weak activity, the United Nations (UN) predicts that FDI flows may fall between 5 and 15 percent to their lowest levels since the 2008-2009 global financial crisis, and therefore for us it is so important to find the right approach to encourage investment in Bulgaria. But let's look at the world and the country from which everything started. In China, the epicenter of the outbreak, officials announced billions in special- purpose loans to companies facing liquidity constraints as well as financial support to specific sectors such as aviation. In terms of coordinated action, on March 6, the G20 finance ministers and central bank governors pledged to take “appropriate” fiscal and monetary measures but made no specific commitments. China is the largest exporter of medical devices to the United States, and about 80 percent of the active pharmaceutical ingredients in American drugs come from China and India. “Chinese pharmaceutical firms have captured 97 percent of the U.S. market for antibiotics and more than 90 percent of the market for vitamin C. In 2018 95 percent of ibuprofen, 91 percent of hydrocortisone, 70 percent of acetaminophen and 40–45 percent of [the blood thinner] heparin imported to the United States came from China. That has already forced India, the world’s leading supplier of generic drugs, to restrict its own exports of some commonly used medicines. Almost 70% of the APIs for medicines made in India come from China. If China’s pharmaceutical plants do not return to full capacity soon, severe global medicine shortages will become likely. But if big pharma doesn’t get back manufacturing on full capacity, there is a possibility of serious shortage of medicines. While much of the world’s attention is rightly focused on the human toll of COVID-19 – including the 1,4652 deaths reported as of 24 March – the economic fee of the outbreak also has potentially disastrous implications. A clarifying moment: COVID-19 has revealed cracks in Southeast Asia’s widely advertised growth models. Many countries in the region have leaned too heavily on external demand from their larger neighbour, and on China- centric supply chains. Compared with the SARS era, China’s economy now relies to a much larger extent on consumption and services. According to one government economist, that means the domestic economic impact of COVID-19 could be significantly bigger. Historical precedents, like the Genovese merchants who brought the Black Death home to Europe from Asia, suggest the spread of COVID-19 should halt trade with China. But in reality, boosting trade with the country may help both China as well as other economies better cope with its impact. page 2 fom 20 InvestBulgaria Agency (IBA), Vrabcha str. 23, Sofia 1000 Tel.: (+359 2) 985-5500 e-mail: [email protected], http://www.investbg.government.bg issue 25 / march 2020 InvestBulgaria Agency It‘s important to remember that we are just entering the COVID-19 crisis and that the upcoming months will be both very difficult and very instructive. We are having the great chance to see and live in times when the history modern economy is being written. New technologies and processes will be born from this and many things will change. Let’s grow together. In our new sequence “ECONOMY IN CRISIS” our team at IBA will upload each week one new article about this intersting economic reality we live in. And dear readers, life, as Lennon said, is what happens while we make plans, so let's look at our here and now and work for a better tomorrow! Sources: Center for Strategic and International Studies (CSIS) - The Global Economic Impacts of COVID-19; The Wall Street Journal - China’s Coronavirus Response Toughens State Control and Weakens the Private Market; CNN Bisiness - Coronavirus devastates China's economy and the 'nightmare' is not over; CNBC - The coronavirus outbreak may have a two-quarter hit on China’s economy. And etc.. INTERESTING ECONOMIC MEASURES TAKEN BY THE TURKISH GOVERNMENT TO DEAL WITH COVID-19 $ 15.4 billion economic package presented Insurance payments in 11 sectors will be frozen for 6 months (including retail outlets, malls, metallurgy, automotive, logistics and textiles) Loan payments to affected companies will be suspended for 3 months Reduced VAT for domestic flights from 18% to 1%. Hotel accommodation tax (tourist tax) suspended until November (8 months) 7 billion TL in support of people with minimum wages 0% customs duty on imports of ethyl alcohol for the production of disinfectants. Erdogan's package has come under fire for prioritizing companies and banks, while offering little to the working class and the poor who have to bear unemployment and income losses in the pandemic crisis. The biggest gesture to the workers was nothing more than the so-called partial payment of work from the Unemployment Insurance Fund to employees of companies forced to quit. To poors were promised a partial increase in existing social benefits, while citizens over 65 had to settle for free masks page 3 fom 20 InvestBulgaria Agency (IBA), Vrabcha str. 23, Sofia 1000 Tel.: (+359 2) 985-5500 e-mail: [email protected], http://www.investbg.government.bg issue 25 / march 2020 InvestBulgaria Agency INVESTOR OF THE YEAR 2019 - WINNERS „ Dundee Precious Metals Krumovgrad “ EAD is „Investor of the year“ 2019 For the 14th time, InvestBulgaria Agency (IBA) gave away the Oscars for investment. During the Investor of the Year 2019 ceremony BAI honored the most significant projects implemented in the country in the past year. The official event was held on February 27, 2020 in Hall 3 of the National Palace of Culture. The event was attended by Deputy Prime Minister Mariana Nikolova, Ministers Nikolina Angelkova, Petya Avramova, Deputy Minister Lachezar Borisov, Deputy Minister Zhecho Stankov, business representatives in Bulgaria. As well as many ambassadors, trade attaches to countries accredited by our representatives in Austria, Azerbaijan Republic, Algeria, Argentina, Greece, United Kingdom, China, Pakistan, Poland, South Africa, USA, Slovakia, Ukraine, Egypt, Morocco, The Netherlands, journalists, many trade representatives, presidents of bilateral Chambers of commerce and industry. "Bulgaria is currently the recipient of the 'Number One Investment in Central and Eastern Europe Award'. I thank you all for what you do for the Bulgarian economy, for page 4 fom 20 InvestBulgaria Agency (IBA), Vrabcha str. 23, Sofia 1000 Tel.: (+359 2) 985-5500 e-mail: [email protected], http://www.investbg.government.bg issue 25 / march 2020 InvestBulgaria Agency investing in new technologies, for enabling the development of talents in Bulgaria so that they can operate on the global markets. Thank you all for showing Bulgaria as a serious investment destination.".