News from Bulgaria / Mar 6, 96

From: [email protected] (Embassy of Bulgaria)

Bulgarian Telegraph Agency Directory

EMBASSY OF THE REPUBLIC OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

6 March, 1996

CONTENTS

[01] AGRA '96 SHOW

"Agra is the largest specialized exhibition organized by the Plovdiv Fair company and the most important event in the area of agriculture staged in Bulgaria," Atanas Kaloudov, Executive Director of the International Plovdiv Fair company (which hosts the farm show) said in his greeting address.

For the first time this year the farm show is held under the sign of the Union of International Fairs (UFI). Agra joined it in November 1995. Machinery and accessories for animal and crop husbandry, plant protection preparations, fertilizers, selection seeds and planting stock are exhibited on an area of 3,599 square metres.

One hundred fifty four companies from 22 countries are taking part in Agra '96. Germany, Greece, Israel and the United States occupy the largest exhibition space. The Agra Show was held for the first time in Plovdiv in May 1992. It was attended by 120 Bulgarian and 80 foreign companies. Since 1993 the show has been held on an anual basis. In 1994 an intellectual exchage for scientific achievements and technological developments in plant growing and food processing was set up. The prices of technological developments were from 150,000 to over one million leva.

Private Bulgarian producers show great interest in the show. In 1994 most of the foreign farm machinery were purchased by Bulgarian farmers even before the opening of the Agra Show. Statistics indicate that taking part in the Plovdiv farm show has become a tradition for German, Austrian, French, Israeli, Greek, Dutch, Italian and US comapnies. Agra '96 will focus on farm machines and equipment, farm services and information. The latest developments in agritechnology will be presented at the intellectual exchage. Almost all the institutes with the Bulgarian Agricultural Academy will participate in it.

[02] BULGARIA, GREECE SIGN PROTOCOL ON BORDER GUARDING

Sofia, March 5 (BTA) - Chief Secretary of the Bulgarian Interior Ministry Major General Georgi Lambov and First Deputy Chief of the General Staff of the Ground Forces of the Greek Army Atanasios Karandzikos, who is on a visit to Bulgaria, today signed a protocol on cooperation in the joint guarding of the Bulgarian-Greek border, the Interior Ministry's press office said. The two officials signed a programme on bilateral cooperation in 1996 which envisages exchange of expertise between staff officers of border posts, the press release says.

[03] BULGARIA STILL WITHOUT COAT OF ARMS

According to the new Bulgarian Constitution, passed in 1991, the coat of arms of the Republic of Bulgaria depicts a golden lion rampant on a dark jules shield. Dozens of designs have been made so far and some reached the debating chamber in Parliament but the political forces have so far failed to achieve a consensus and Bulgaria still uses its national emblem of the totalitarian period. The principal dispute is on whether the coat of arms should depict a crown. The main arguments against the crown are in their essence anti-monarchist.

Artist Hristo Tanev announced today that he has designed a coat of arms. He claims that his coat of arms bears no foreign signs and symbols and is for the first time based on the faith of the Bulgarians and Bulgarian national traditions. The design is centred around Christian insignia - Glagolitic characters, the sign of the cross and the sign of the holy writ. The artist submitted his design in Parliament last December but has received no answer so far. Tanev called on the MPs to pass the new coat of arms by March 15 because this would be fateful for Bulgaria. Ten ESPs have confirmed the beneficial power of the signs included in his design.

One of the first coat of arms designs to attract relatively broad support was that of artists Georgi Chapkunov and Kiril Gogov and bore a distant resemblance of the coat of arms of monarchist Bulgaria. This and several other designs were rejected. The Cabinet of Lyuben Berov sponsored a coat of arms depicting a golden lion against a red shield supported by two more lions with oak twigs and a ribbon reading "United We Stand, Divided We Fall". After the Socialists came to power in December 1994, the Socialist Government introduced in Parliament a design of a coat of arms depicting a lion without a crown. This sparked strong political and public debates. The opposition insisted on a crowned lion as a symbol of Bulgarian traditions before communist rule. The largest opposition formation - the Union of Democratic Forces (UDF), declared itself for restoring the coat of arms of the Third Bulgarian Kingdom (1879-1949). Before the vote in Parliament, President Zhelev addressed the MPs declaring himself in support of a crowned lion. After his address the MPs of the Socialist majority removed the coat of arms from the agenda proposing that consultations be held for achieving consensus. So far the consultations have failed to bring about such a consensus.

[04] PRECONDITIONS FOR ECONOMIC RECOVERY

The economic recovery in 1995 is chiefly attributed to the growth in the branches which consume much energy, metals and capital and which are subsidized by the state, Angelov told the press. The views included in the study do not reflect those of the state institutions in which three of the team's experts work. Their forecasts about a number of macroeconomic indicators do not coincide with the projections of the Cabinet included in the budgetary macroeconomic framework. The experts' conclusions indicate a more unfavourable economic situation than that projected by the Cabinet's forecasts. If, however, this country fails to sign an agreement with the international financial institutions, it will prove unable to achieve even the more unfavourable indicators, the economists warn.

According to the BAS experts, in 1996 Bulgaria will post a three- per cent growth in the gross domestic product. The economists say that the private sector's share in the GDP will increase from one third in 1995 to 40-41 per cent in 1996. According to them, the annual inflation in 1996 will reach 35 per cent, against 20 per cent projected by the Cabinet. The economists project an annualized base interest rate of 30 per cent, against 25 per cent estimated by the Cabinet. According to the study, the average annual lev/dollar exchange rate will reach 82 leva to the dollar. This means that the dollar will trade at 93-94 leva in late December, Angelov said. In his view, the budget deficit will amount to 6 per cent, against 5.2 per cent provided by the 1996 national budget.

The economic analysts offer a recipe for a way-out of the crisis whose first item consists of changing of the philosophy behind the economic policy and replacing the restrictive policy pursued so far with an investment-oriented macroeconomic policy. Investments in Bulgaria in 1994 amounted to a mere 13.8 per cent of GDP, while preliminary data for 1995 set them at an even smaller figure. This is why attracting foreign investment should be our primary goal, the experts conclude. Bulgaria will not achieve economic recovery unless there are fresh funds flowing from abroad, Angelov said. Despite this, however, introduction of such drastic measures as for instance tightening of the foreign exchange regulations and blocking of savings accounts is not necessary, Angelov stressed.

This is the fourth consecutive year when the BAS experts make similar analysis and forecasts about the development of Bulgaria's economy. The analyses proved a lot more correct than those conducted by international institutions, Angelov said. The experts projected that this country's GDP in 1995 will amount to 851,000 million leva, while the actual figure calculated by statisticians was 852,000 million leva. The actual annualized base interest rate proved just 0.1 per cent higher than the projected 50 per percent by the team, Angelov said. There was a four-per cent difference between the team's projections about the annual inflation and the actual figure, as well as the lev/dollar exchange rate which remained considerably lower than the projected level. According to the economists, the differences are attributable to the central bank's policy which, in their view, will increase the tension on the foreign exchange market in 1996.

[05] DEFENCE MINISTER PAVLOV: MILITARY FACTOR STILL PLAYS DECISIVE ROLE IN BULGARIA'S NATIONAL SECURITY

Sofia, March 5 (BTA) - The military factor will continue to play a decisive role in guaranteeing the normal life of the Bulgarian nation in the present changing world and in the unstable military political situation in this region. It will also play a decisive role in neutralizing risk factors and various threats to this country. This is the stand of the Bulgarian Government, set forth by Defence Minister Dimiter Pavlov at a seminar with the leadership of the ministry which opened at the Defence Ministry yesterday.

Defence Minister Pavlov underscored the need for Bulgaria to maintain sufficient military power. Since his appointment to this post a year ago Pavlov has repeatedly expressed alarm over the imbalance of armaments in the Balkans and Bulgaria's lagging behind in this sphere. It is imperative that in the future too the armed forces preserve their key position in guaranteeing national security and to regularly appraise the factors of importance in this respect, Pavlov also said.

The "National Security Policy Problems and Prospects" seminar was covered in detail by the daily of the Defence Ministry - "Bulgarska Armiya". It is held in implementation of the annual plan of the Defence Ministry and the programme of the National Security Research Centre. It is attended by deputy ministers of defence, chiefs of the general staff of the Bulgarian army, commanders of the armed services, chiefs of departments and sections of the Defence Ministry and the general staff.

The dynamic changes in Europe and the world have undermined a number of until now stable categories such as security, borders, self determination, sovereignty. The collapse of the bipolar model deterrent created conditions for the escalation of a number of local crises, ethnic, religious and territorial disputes, Pavlov said in his lecture on national security and military policies.

The gulf between the developed North and the poor South in broadening, international terrorism and smuggling are on the rise and the environment is deteriorating, the Defence Minister said. In these complicated conditions Bulgaria needs a new national security policy providing real guarantees and defending Bulgarian interests and ideals in the process of European and universal development, he said.

Deputy Foreign Minister Irina Bokova, journalists, political analysts and Prof. Nansen Behar, Director of the National Security Research Centre also dwelled on political alternatives in national security. The seminar continues its work today.

[06] OUTSTANDING BULGARIAN ECONOMIST OFFERS WAY OF REPATRIATING CAPITAL

Sofia, March 5 (Ekaterina Kazassova of BTA) - An outstanding Bulgarian economist advocates "amnesty" of Bulgarian capital smuggled abroad. Prof. Ivan Angelov of the Institute of Economics with the Bulgarian Academy of Sciences says this means to provide conditions for repatriation of the capital syphoned off abroad over the past 10-15 years. The proposal envisages that transfers be made with no need to prove the origin of the capital.

Prof. Angelov told journalists he is aware the idea is morally controversial but he believes that amnesty of capital is necessary whatever the corruption behind it. He also said the proposal has not yet been discussed with government institutions and binds them in no way. The last remark was made in a view of the position Prof. Angelov takes as economic advisor to the Prime Minister.

Noone can say exactly how much money has been smuggled abroad. Estimates vary from 2-3,000 million to as much as 10-15,000 million US dollars. They were generated during the communist regime as well as over the past few years and certain people took care to transfer them to foreign banks, Angelov said.

The repatriation of capital, according to Prof. Angelov, is enhanced by the liberal foreign exchange regime in this country over the past years, and the high interest rate payable on foreign exchange deposits. Repatriating the capital does not spell backing down from the commitments taken before the European Union. As for the possibility of dirty money entering Bulgaria, Prof. Angelov says a mechanism can be found to make sure this does not happen.

"Money has no smell" has probably been the guiding principle for the advocates of amnesty of capital. "In economy you don't work with emotions, particularly in difficult moments such as this one," Prof. Angelov says. He admits the moral side of the idea is vulnerable but adds it is worth the effort to attract this money to work for Bulgaria, provided it is not narcodollars.

Only a month ago, the cabinet approved a bill on money laundering and amended the Penal Code criminalizing all premeditated action aimed at legalizing dirty money. With the passage of the bill Bulgaria meets its commitments under the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime.

[07] JUSTICE MINISTER EXPECTS LOBBYING AGAINST THE ANTI - MONEY LAUNDERING BILL

Sofia, March 5 (BTA) - Minister of Justice Mladen Chervenyakov expects lobbying against the anti-money laundering bill which the Government submitted to Parliament for approval a week ago. "I think that some institutions concerned will try to prevent the application of measures provided for in the bill," Minister Chervenyakov said. In his view, the MPs will be lobbied against the bill before it reaches full-house stage.

The anti-money laundering controls will be compulsory for banks, insurance and investment companies, bodies conducting privatization transactions and persons who organize tenders for awarding government contracts. The institutions concerned have submitted their positions to Parliament, with the Association of Commercial Banks lodging a sharp-worded objection against the bill.

"Of late each one of those institutions appears to have been pressing for independence and uncontrollability so that no information about its activities be obtained. It seems that banks, which consider the bill to be an attempt at gaining access to their bank secrets, have been trying to deter even the little which is done for the prevention and detection of money laundering," Minister Chervenyakov said, explaining the strong reaction of banks against the bill in an interview on national radio.

The ant-money laundering bill was drafted as early as in September 1995. By decision of the Government, it was discussed with representatives of the Association of Commercial Banks and other financial and lending institutions in Bulgaria. Before approving it, the Cabinet sent it to the ACB for final observations. "As to fairness, they were treated quite fairly in this respect," the Justice Minister, who introduced the bill before the Government, said.

By passing the bill Bulgaria will fulfil its obligations under the Council of Europe's Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime which entered into force for Bulgaria in October 1, 1993. "Oviously the authors of the Convention expected a similar response in some countries and included an express provision according to which no country can invoke bank secrecy to avoid the commitments assumed by joining the Convention," Chervenyakov said.

According to him, Bulgaria did not opt for the extreme version which allows access to banks' computer information, monitoring of telecommunications and other measures which would have met much stronger resistance. "On finalizing the bill, the Government sought to maximally guarantee the rights of banks and financial institutions, meet the national need of attracting investments and protect the state interests in the prevention and exposure of money laundering," according to Chervenyakov.

The controls which the bill provides for the prevention and detection of the laundering of ill-gotten gains include determining the customer's true identification as well as storage and disclosure of information. These are countermeasures that comply with the Financial Action Task Force recommendations, laundering, the Basle Statement of Principles on Money Laundering of 1988 the European Union's Directive 93/308 on tightening banking supervision to prevent the use of the financial system by money launderers.

Together with the bill, the Government approved amendments to the Penal Code which will criminalize actions that hinder the location, detection and seizure of proceeds known to have originated from crime. This is required by the Council of Europe's Convention.

"Conventional, white-collar and organized crime are merging. Gangland groups pursue a monopoly over 'illegal business', including smuggling of fuels, alcohol, cigarettes and other goods, gambling, distribution of pirated videos, prostitution, smuggling of antiques and cultural property. Racketeering is taking on new forms, such as protection contracts and insurance against defaulting debtors. A monopoly is being forced on a number of profitable economic activities. Dozens of millions in dirty money have been invested in legitimate business. In the coming years, illicit money will continue to be amassed and moved through financial institutions because of the exceedingly favourable opportunities, among other things for greenwashing proceeds from international organized crime."

[08] BUSINESS PRESS

About 1,000 million US dollars are needed for the Bourgas- Alexandroupolis oil pipeline, "Douma" writes citing Bulgarian Socialist Party MP Andrei Loukanov, Co-chairman of the Board of Directors of Topenergy, a Bulgarian-Russian gas joint venture. According to Loukanov, the problems Bulgaria, Greece and Russia had have already been clarified at government level. Their final solution is expected after Prime Minister Zhan Videnov's official visit to Moscow, Loukanov is quoted as saying. The conditions for the construction of the pipeline, which should comply with the recently adopted Concessions Act, as well as the amount of oil to be carried via Bulgarian territory, will be specified then.

Topenergy is on the verge of collapse, "Standart News" writes referring to the Balkan Agency which cites the Russian paper "Segodnya". According to a Topenergy source, last week's talks of Gazprom chief Rem Vyahirev and the Bulgarian Government were "rather nervous" because of the dispute over transit fees. An agreement was reached on the transit of 18,000 million cubic metres of gas across Bulgaria, the paper says. "Topenergy will inevitably collapse if a concession to use the Bulgaria gas transmission system is not granted," Topenergy Co-chairman Sasho Donchev states.

"Bulgaria's Gas Energy Can't Do Without Foreign Investment", reads the headline of an article by Nikita Shervashidze, former chairman of the National Electric Company (until November 1994) and former member of the Topenergy Supervisory Board (until November 1995), puyblished in "Standart News". Dwelling on the future of Bulgaria's energy industry, Shervashidze emphasizes the need to attract investment for the construction of new gas and thermoelectric power stations, the expansion of the existing gas transmission and distribution system and the construction of new facilities. In his view, the elimination of the state monopoly over the energy sector is of key importance for the future of this industry.

[09] TRANSPORT MINISTER STAMENOV VISITS MACEDONIA

Sofia, March 5 (BTA) - Transport Minister Stamen Stamenov, who arrived in Macedonia at the invitation of his counterpart Dimitar Buzlevski on Monday, today met with Prime Minister Branko Crvenkovski, national radio correspondent Kostadin Filipov reported from Skopje. Stamenov and Crvenkovski discussed the construction of a railway and roads between the two countries, emphasizing the need to expedite their completion.

At a meeting today Stamenov and Macedonia's Transport and Communications Minister Dimitar Buzlevski agreed that experts of the two countries' transport ministers should formulate rules designed to improve road transport and road haulage; they should also work for the upgrading of the existing border crossings and the opening of new ones. The transport ministers also agreed that it would be in the mutual interest to improve the organization and functioning of personnel at the border checkpoints, the radio correspondent said. Stamenov and Buzlevski addressed air and road transport issues which should be resolved by the two countries.

The visit is seen as a good sign of the overall state of economic cooperation between Bulgaria and Macedonia. Stamenov conveyed an invitation from Bulgarian Foreign Minister Georgi Pirinski to his Macedonian counterpart Ljubomir Frckovski to make an official visit to Bulgaria at his earliest convenience.

[10] ENVIRONMENT MINISTER GEORGIEV BACK FROM BRUSSELS

Sofia, March 5 (BTA) - Bulgaria was highly praised for hosting the October 1995 Third Ministerial Meeting "Environment for Europe", said Environment Minister Georgi Georgiev on his return from Brussels today. There he attended a meeting of the ministers of the environment of the EU member states and the associated countries.

The Sofia Conference has been the most fruitful forum so far, the Danish environment minister said in Brussels. Denmark will host the next ministerial conference on Environment for Europe.

The Brussels meeting devoted special attention to Sofia initiatives including the financing of environmental projects in Central and Eastern Europe, and the link between business, industry and the environment. An ECU 10 million fund was set up with the PHARE programme, earmarked for helping the associated countries bring their environmental legislation into line with that of the EU member states.