The president of the Bilateral Chamber of Commerce Bulgaria-Romania has given this interview on the effects ot the COVID-19-generated crisis, on the necessary actions against it, on the chamber’s vision for the development of infrastructure and on the promotion of the bilateral economic relations
Doru Dragomir is the president of the Bilateral Chamber of Commerce Bulgaria-Romania, which has offices in Sofia and Bucharest. He has worked for more than 20 years in the private sector. He has passed through the great inflation of 1996 in Romania and the international economic crisis, which hit Southeastern Europe in 2008-2009. Dragomir has EMBA at the Asesbuss & Michael J. Coles College in the University Kennesaw State in Georgia, USA in 2007. He also has a degree in Law in Romania.
This chamber of commerce has more than 40 members from both countries, which are active in 25 economic sectors. It is one of the two bilateral chambers with focus upon the Romanian-Bulgarian economic relations.
Mr. Dragomir, the coronovaris-caused crisis led to changes in life and economy of our countries. How has it influenced the members of the Bilateral Chamber of Commerce Bulgaria-Romania (BCCBR) and the economic relations between Romania and Bulgaria?
This crisis has certainly influenced the whole economy. Our members are present on both markets. They didn’t have a problem in their activity between Romania and Bulgaria. Each of our members however had problems on a national level, in function of their domain of activity.
The problems at the level of the members of the Chamber appeared among those companies, which wanted to open branches in the other country or to find partners and could. The identification of partners was more difficult in the first month and a half. It was more difficult until 20 April, because of the lack of communication. The world temporarily halted. The companies tried to concentrate upon what they have to do in order to survive. Nobody thought about development, about relations with other zones.
On the other hand there was a problem, related to transport and commerce. A lot of the companies, which were making commerce, had to block their trade, because of the pause in communication. It was simply difficult to communicate. It was difficult to make online trade. There was a sharp decline in the commercial domain.
From our point of view, the part, which was related strictly with logistics and transport functioned well. We could pass the danube at 3-4 crossing points. There were no delays at the customs. But no work was done on developing new businesses. Both in Romania and in Bulgaria at the national level there was a lockdown in the case of companies, because of the fears for health. It was difficult to work on a national level.
Will the decline in the volume of business activity be recovered?
I tend to believe that there will be a fall in the bilateral trade between Romania and Bulgaria. We will not be able to think about the level of bilateral commerce, which we reached in 2019 – 5 billion euro.
I don’t think that the falls in business activity will be recovered. But it is clear that things have improved a lot in comparison with March of April. A lot of things depend on what will happen on medical level. If Romania and Bulgaria enter again in a lockdown, we will probably see a fall of 25% in comparison with 2019. The last statistical data of the Ministry of Finance in Romania estimates that the economic decline of Romania at the end of 2020 will be 5-6%, which is smaller than the earlier estimations of 9% of GDP. I hope the new expectations will be confirmed. I don’t know how the calculations are being made.
What I know is that if Romania’s economic decline is higher than 9% of GDP, a very long period will be necessary in order to recover this fall.
BCCBR has done various activities in order to ameliorate the negative effects of the crisis upon its members and upon the bilateral economic relations. Could you tell us something more about those activities? What have you managed to do? What were your failures in this regard?
We had a period, in which we stopped the operation of our two offices in Sofia and Bucharest, because we had to see what will happen with the health crisis. As soons as the immense fear of the public started to get smaller, it was obvious that we had to start to work again. The main problem was logistics. We didn’t have requests from our members on the issues of transport and transit of goods. The problem was with the labour force.
Unlike the situation in 2014, when the number of Romanian employees in Bulgaria and of Bulgarian employees in Romania was up to 100 people, until 2020 their number had already grown significantly. The inability to pass the borders created problems for the businesses on the two parts of the Danube. In the second month of the emergency situation in Romania and in Bulgaria we initiated a series of actions towards the two governments, in which we asked that if the businessmen can prove their significant economic interest, to be allowed to pass the border without a quarantine of 14 days. We explained to the both governments that in this category could fall people, who can prove that they have businesses in the other country, which have to verified and supervised, Romanians and Bulgarian, who are employed with a labour contract, and citizens of the two countries, who can prove with a contract that they have commercial relations with firms from the other country.
That meant that a series of pleas and proposals was sent to the Ministry of Health in Bulgaria, to the Ministry of Economy of Bulgaria and towards the Bulgarian embassy in Bucharest. Also, we sent them to the Romanian embassy in Sofia, to the Ministry of Interior in Romania (which is the competent institution in the reaction to the coronavirus) and to the Ministry of Economy. I can say that we had success. The authorities in the two countries understood our point of view.
Romania allowed that businessmen, who can prove commercial interes, enter in Romania, starting from 18 May 2020. Starting from 22 May 2020 Bulgaria allowed the entrance of businessmen without quarantine.
When you have business interest, you can’t lose 14 days at the entrance in the other country and 14 days upon your return in your country. The governments understood and allowed the acces. In Bulgaria the declaration, which I signed at the entrance in the country, had almost completely contained our proposals for gathering data in the address, which we sent to the Ministry of Health.
Why wasn’t this relaxation for businessmen reported a lot in the media?
Most probably it is our fault. We couldn’t popularise our success. We communicated about it in our networks, in the network of the Regional Chambers of Commerce, in the professional chambers in Bulgaria, among the companies with which we work. I admit that I didn’t understand very well why the Bulgarian press didn’t react to our initiative. The Romanian press reacted much better
I tend to think that everything is due to the fact that the press was busy with health problems. Presently, Romania is the second largest trading partner of Bulgaria in the EU. Therefore, it is an important country. We have a lot of companies, which created these 5 billion euro of bilateral commerce in 2019.
But I understand what you say. Next time we will try to be better in communication.
What does this crisis change – not only the health one, but also the economic one, for the two countries in their bilateral relations?
I think that there are a few things, which do change. BCCBR thinks especially about the business. In the short term, we will have a fall in the trade volume, because of the restrictions. Most likely, we will have a reduced level of investment on both sides of the Danube. This reduced level comes from the companies’ desire to reduce their costs and to survive.
A lot of industries saw great fall in sales. These are not only the hotels, restaurants and cafes, but also the companies, which supply services to them. Very few of them will think about development of their business and investment.
Another unfortunate thing, which we will see, is the high level of unemployment in comparison with the previous year. Once that unemployment level grows, the potential employers might consider finding job opportunities on the other side of the Danube. In fact, that might be good.
In the end of 2018 BCCBR organised an event in Rousse at the University “Angel Kanchev”. We brought ten firms from Bucharest, which are active in different domains – from construction to IT. They presented in Rousse 40 jobs. These were jobs that were especially for Bulgarians and required settlement in Bucharest. Our surprise was that we found a very small number of people, who are interested in these jobs. Only 300 people came. They came out of curiosity – in order to see what the talk was about. Very few people continued their discussions with the companies after this event.
This growth of unemployment could encourage the people to renounce their sedentary mentality and to look for a job, where it might exist. This is where I see opportunity.
The second major opportunity in this situation is that Western European and American companies can no longer allow to be hostages of the Asian zone for their production. This means that Romania and Bulgaria could represent together (not separately) a very good solution for relocation of some representative industries for the Western economic space. Romania and Bulgaria are part of the common market and have an European culture. The companies from the German automotive sector have had an enormous fall. They might start to consider finding suppliers in our zone.
BCCBR does believe in this idea. I started to discuss with different entities from both countries so that we could prepare a strategy for attracting investors, of partners, which is supported also at the level of the two counties’ governments, and will help the potential investors in this type of industries.
This is an old dream of mine and of the Chamber of Commerce. I have always supported the finding of Romanian and Bulgarian companies, which have complementing services and can offer packages of services at third markets. That could be a great opportunity of ours.
What did you manage to accomplish as relations between companies from Romania and Bulgaria? I know that you have realised some projects…
Our history as a chamber gives us a lot of grounds to be proud. The most important thing is that we have increased the zone in which Romanians and Bulgarian start to have information about one another. Until 2010 the main commercial area between Romania and Bulgaria was represented by the border zone. Starting from 2010, things started to change. We made efforts to promote the Romanian market in the entire territory of Bulgaria and to promote the Bulgarian market in the entire Romanian territory.
That meant that we developed a project with the Executive Agency on Small and Medium Enterprises in Sofia, which included a tour of the main cities of Bulgaria. We made presentations before the main producers in these countries about the homologues in the same sectors in Romania. This made a huge number of small and medium companies obtain information about the suppliers and potential clients in Romania and to develop interest in them. So dynamics in the bilateral economic relations was created.
We also accomplished a project, which is dear to my heart, and dealt with businesses in the zone of traditions and culture. Together with the Ministry of Tourism in Sofia and the Romanian embassy we made a caravan, which presented the Romanian traditions and culture and to which we added the business space.
Presently, the name of BCCBR and the name of Romania are well known in all the principal cities in Bulgaria. At the same time in Romania together with our partners – the other bilateral chamber and regional chambers of commerce, we had a series of events, in which Bulgarian business was presented in zones, where Bulgaria is just a distant name on the map: such as Cluj Napoca, Iasi. They are away from the border with Bulgaria. Brashov is the closer, but it is away from the standing point of information. The people there didn’t know anything about businesses and companies in Bulgaria.
Also, Romanian tourism in Bulgaria has grown significantly. This led to better acquaintance with Bulgaria in Romana. Romanians saw that Bulgarian food is just as good as the Romanian one, that Bulgarian wine is also very good. Then people started to be interested in such food and in other products. That is how the interest towards Bulgarian products grew.
At the same time we tried, in the limit of our possibilities, to contribute to the development of the business and of business education. Two years ago we created a mobile application for entrepreneurs’ education as part of an European project. Both the Romanian South and the Bulgarian North have a big number of mobile phone users, who want to be entrepreneurs, but lack education for that. We made a thorough study – almost 6 months, and the results have shown that these men would like to develop alone, but don’t have the necessary instruments for that. On the other hand, all of them didn’t have access to computers.
This application is on the application market Android. It offers base information for any entrepreneur: how to make a budget, how to make a prognosis, how to calculate the risk, etc.
Each of the topics of this application offer small insights that can open the mind of any entrepreneur. We didn’t put legal matters in the database, because there are legislative differences in Romania and Bulgaria. But wherever you are, the managerial matters are the same.
The second platform, which we constructed is for craftsmen from Romania and from Bulgaria. Wherever we are in our countries, the local producers and craftsmen exist, but can’t sell their products, because they don’t know where to go in order to sell them. Then within this platform, we created a market, in which the craftsmen could offer their products and the clients could buy them directly from the producers. We eliminated the intermediaries.
In the context of the pandemics, we prepare a platform, through which the experts in the different domains could transfer their knowledge towards the interested people through video lessons. This project became necessary in the times of lockdown. Through this a platform for transfer of information on an individual level will be created. Now the platform is in a period of testing. Experts in various domains have already registered – sports, music, marketing, business, foreign languages. We hope that we will be ready for a launch in August. At present we translate the platform in English, Romanian and Bulgarian.
We think that a lot of people will have problems with having a job. We think that the unemployed will pass through a difficult period. For example, a Romania actor can’t work now, because the theatres are closed. He registered as a piano teacher on this platform.
Until the end of the year the platform will be free to use by experts and by those who want to learn from them.
The level of infrastructure development between Romania and Bulgaria is insufficient. What does BCCBR do in order to resolve this issue? What is your vision?
We can’t do anything else but make proposals and communicate the business’ point of view towards both governments. We have entered in partnership with two important organisations in Romania – The Romanian Business Leaders and The Coalition for Development of Romania. Both entities have as their primary goal the promotion of a strategy for national development. We found a lot of understanding in both organisations on the issues of infrastructure and transport. The Romanian experts from this domain think that the advantages of thinking on infrastructure on regional level are greater than if we think on infrastructural in national limits.
Romania and Bulgaria are the door for entrance in Europe from Turkey and the Eurasian space. They are part of the Black Sea region and through their territory pass 5 European corridors TEN-T. One of them is the Danube and offers great advantage from the standing point of cost reduction.
Along the entire current of the Danube there are 350 bridges. Between Romania and Bulgaria there are only 2 bridges, while these countries represent ⅕ of the total length of the river. We have a big problem here. At the political level it is said: “The Danube unites Romania and Bulgaria”. In reality it keeps us isolated. That is why the people on both sides of the river don’t speak the other language, even at a beginner’s level. It is one of the few areas in Europe, where the people at the border don’t understand one another. It is because the Danube keeps the people separated.
In the area of Vidin there is a Vlach community, which speaks Romanian language. But in the Oryahovo-Bechet area there are very few people, who speak the other language. We also have the problem with the transport on Danube. Romanians are unhappy that Bulgarian don’t dredge the river. The Bulgarian river bank is in medium 2 metres higher than the Romanian one, which means that Romania has flooded areas on an annual basis. The simplest solution would be the construction of a hydro power station, which could adjust the level of the river.
We also have other issues, where we can’t reach an agreement.
What prevents the parties from reaching an agreement?
One of the things which have prevented a better cooperation between Romania and Bulgaria is that the respective authorities discover their cooperation interest without mutuality with the other other party, without coordination with it. When the Bulgarian party assumes this idea, Romania is not interested. When the Romanian party assumes it, the Bulgarian party is not interested.
The second thing that hinders closer cooperation is the lack of trust, which exists and which comes from the common history and from our Balkan past. We know negative stories in bilateral relations. On the basis of these negative examples, some legends were created. And they lead to reduced trust.
We had a case of understanding: the place of the third bridge between the two countries was set at Svishtov-Zimnicea…
There has been talk about this bridge for 2-3 years. The local authorities in this area want it. But such a level of investment must be interesting also at the governmental level. As I said before, the two countries have other priorities on this issue. In my view, there is no sense in constructing this bridge as long as there is no completed infrastructure on the both sides of the Danube.
The bridge at Vidin-Calafat is wonderful. But in order to reach to it from Sofia you need 3-4 hours. You also need a lot of time to reach it from Drobeta-Turnu Severin and Craiova. It is necessary to think also in economic terms. Is it worthy to make a bridge at Svishtov-Zimnicea so that 100 cars pass it on a daily basis? My answer is affirmative, but only if we would be able to construct at the same time 10 bridges on the Danube. But if we have to choose just one bridge….
Is there any kind of work that is being done right now on the project Svishtov-Zimnicea?
As far as I know, no.
Is there understanding that the bridge was built there?
As far as I know no.
It was just an idea. It was discussed at governmental level. It was a project that was discussed. The Bulgarian party was very interested in the construction of such a bridge. The Romanian party was not so interested, but participated in the discussions. Or better said, the Romanian party was interested, but didn’t have a budget.
From the standing point of economy and logistics, this bridge doesn’t make a lot of sense. It is much closer to Rousse and Giurgiu. The bridge at Rousse-Giurgiu has difficulties to bear the existing traffic.
According to the Coalition for Romania’s Development the normality would be to construct a bridge at Nicopole – Turnu Măgurele. Once that there is a bridge there, it could connect easily to the highway, which is being constructed between Sofia and Pleven. And through Turnu Măgurele it would be able to reach the express road Piteşti-Craiova. From the point of view of logistics, there is a sense to make such a bridge, because it would reduce the distance between Bucharest and Rousse – the two big centers.
If such a bridge could connect to the hydro power station project, it would allow for European funding and would have a big added value.
We do what we can to support the development of infrastructure. We are partners for a third consecutive year of the National Conference of Transport Infrastructure in Bulgaria – the largest event in Bulgaria in this domain. We have brought participants from Romania in every year of our cooperation with it. We find partners in both countries annually in at least ten infrastructural projects. We address our points of view towards the authorities.
What is on the horizon for BCCBR in terms of activities in the context of the coronavirus-generated crisis?
Obviously, the online medium starts to be very important for each economy. On the other hand, in my view more than 80% of the Romanian-Bulgarian economic relations are commerce, not investment. It is logical to predict that more and more of this commerce will take place online.
We have a whole series of projects, which develop this online zone. One of the members of the chamber is eMag, which is the main player on both online markets. We hope that until the end of the year we will realise a series of technical solutions, which will help online work and business.
There is also the issue of industries’ relocation from Asia to Romania and Bulgaria. We make a series of efforts in order to promote the advantages of our countries. We have a close relationship with companies from the Asian area, which could come here. One of the main partnerships, which we have is with the largest commercial organisation in India. We try to organise the coming of a delegation of businessmen from India in Romania and Bulgaria.
We want to think regionally, when we speak about Romania and Bulgaria. Each country has its advantages. But the investor’s view is that they don’t come in an individual country, they come in Eastern Europe. They don’t discuss the specifics of any country.
Bulgaria has fiscal advantages. Romania has a larger market than Bulgaria. In order to think about them in a package, you need to be able to transport goods from one country in the other.
We are looking for solutions to that. Possibly, a Romanian-Bulgairan “mini-Schengen area”. Such a solution is too distant. But we need to find our version of such a solution.
What hinders the realisation of such a solution?
The main problem comes from the European legislation. The EU doesn’t allow for regional custom solutions. You are either part of the Schengen area, or you are not. We don’t want to think about the Romanian-Bulgarian relationship exactly in the structure of the Schengen area. We are interested to try to develop a little bit the efficiency with which the transport of people or goods, the passing of the border is being made. Bulgaria was transited until 2020 by 4 million Romanians annually. These numbers are a chance for infrastructure development. They stop along the roads to buy stuff, to visit different places. We are also interested in the tourist areas.
Six years ago I made a proposal to both ministries of transport to reduce the price for passing of the bridges. It is not possible for a businessman, who passes the bridge 1-2 times a day to pay as much as a tourist, who passis it 2 times per year. It is not lucrative for the citizens of Rousse and Giurgiu too.
What answer did you receive?
I made this proposal in 2014 for the first time. Then at our table were representatives of the both ministries. Our proposals are still being discussed. But we are stubborn and we will succeed.
I hope that the other chambers of commerce – the national ones, the regional ones, the bilateral ones and other organisations, which support the business will join our effort. There is not a big coherence between these structures right now.
This idea of Bulgarian-Romanian mini-Schengen was presented at my blog too. What would such a solution mean – that the visas of a country would be valid for the other one, probably it means reciprocal access to the data bases…
With regard to the visas – we can’t resolve the issue, because of European legislation. We think about this solution less through the prism of the citizens of the third countries and more as a solution for the citizens of the two countries – Romania and Bulgaria. What interests us is what happens with the bilateral business. The reality is that both border police services already have access to the common database of the Schengen area. Neither Romania, nor Bulgaria are members of this space. But we have the Schengen system installed.
What we think that must be done somehow is to support the business, when it has to pass the border. We hope that there will be a more rapid solution for it. At this moment our priority is the businesses. We will think after that for the tourists. We don’t want to enter the area of European mechanisms on such an issue as a mini-Schengen. It is not part of our competences. But we can (and we are a voice of the business community of both countries) and we want what is necessary for the business community to be done. We want to make things, which are possible from a juridical point of view. Only when the juridic frame is respected, we can propose solutions.
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