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Speeches, 9/3/2007

The Address by Minister Väyrynen at the Finland-Bulgaria Business Forum in Sofia

Keynote Address by Dr. Paavo Väyrynen, Minister for Foreign Trade and Development of Finland, at the Finland - Bulgaria Business Forum in Sofia on September 3, 2007.

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Your Excellency, Minister Dimitrov, Excellencies, Ladies and Gentlemen,

I would like to start by thanking the Bulgarian Industrial Association for co-organising this event. And I would like to thank Minister Dimitrov for his interesting and inspiring address.

Ladies and Gentlemen,

It is a great pleasure for me to have this opportunity to visit Bulgaria accompanied by a high-level Finnish business delegation. This is my first business promotion visit abroad in my capacity as the new Minister for Foreign Trade and Development of Finland. I am especially glad to be here, because I still remember very well my discussions in Sofia last year as a Member of the European Parliament and the Vice-chair of the EU-Bulgaria Joint Parliamentary Committee.

The purpose of my visit is to enhance trade and economic relations between our two countries. It is high time that the challenges expressed by our Presidents during their visits in 2003 in Sofia and 2004 in Helsinki, respectively, are finally met, that is, bilateral commercial relations have to correspond better with the traditionally excellent bilateral relations between our countries.

Ladies and Gentlemen,

My visit to Bulgaria takes place at a time where innovative responses to the challenges - and opportunities - created by globalisation are in high demand everywhere. Globalisation has brought the different corners of the world closer to each other and made new kind of interaction possible.

On the other hand, this process has made all of us begin to face the limitations that increasing economic activity on a global scale brings about. Typically, relocation of businesses and jobs towards a few large rising economies - China in the first place - has been seen as the primary expression of globalisation. This has been felt in Finland, as well, but this is not the end of the story.

Rapid economic growth in Brazil, Russia, India and China has entailed intensified rivalry for raw materials and energy around the globe with the consequence of ever-rising prices of these productive assets. And all this constitutes an increasing burden on the ecological sustainability of this global development. So, the name of the game is to balance the opportunities created by globalisation with the challenge of economic, social and environmental sustainability.

The European response to these global challenges has been the ever-gathering economic integration and the creation of a single market. We in Finland have had the honour to play a role at the turning points of the Bulgarian path into the European Union and the single market. In 1999, during Finland's first EU Presidency, Bulgaria was invited in Helsinki to start the membership negotiations with the European Union. And during the second Finnish Presidency last year it was confirmed that Bulgaria will join the Union at the beginning of 2007.

It is this common single market that is the context in which Finnish and Bulgarian companies search for niches and untapped business potential between themselves. I strongly believe that Bulgaria and Finland can together gain a lot from the enlarged European Union and the internal market. Common regulatory foundation and standards within the single market make life for entrepreneurs a lot easier. And later, after that Bulgaria has entered the Euro zone, the benefits to business relations will be even greater. I encourage the Bulgarian authorities to continue on the reform path and especially in the efficient implementation of the reforms.

Ladies and Gentlemen,

Trade between Finland and Bulgaria increased rapidly in 2006. The Finnish exports to Bulgaria doubled and Bulgarian exports to Finland tripled. The mutual trade is in balance, but still only some 60 million euros in each direction.

The major Finnish export items are telecommunications equipment, forest products, metals and machinery. In our imports from Bulgaria, the share of minerals and metal scrap is about 60 per cent, but the textiles are also important. The amount of Finnish investments in the Bulgarian economy is so far very modest, only some 3 million Euros, mostly in construction and trading sectors.

Where is that untapped business potential between our countries to be found that I referred to earlier? We should look at our respective strengths - the different aspects that make our respective markets attractive.

Bulgaria has many undisputable trumps in view of increasing trade and investment from Finland: your vibrant domestic market and your geographical location close to Central European markets and as a bridge to the markets in the Balkans, Middle East and wider; your strong macroeconomic performance, political stability, traditionally high IT talent, industrial experience in some important areas, low cost labour, Europe's lowest profit tax. The list is long.

I would like to compliment Bulgaria on her constructive role in fostering regional co-operation in the Western Balkans. As the Chair-in-Office of the South Eastern European Co-operation Project (SEECP), Bulgaria will play a crucial role in supporting the transition of the Stability Pact for South Eastern Europe into the Regional Co-operation Council by the end of February 2008.

From a broader regional perspective, Bulgaria's efforts to intensify the co-operation between the EU and the Black Sea region have been welcomed by Finland. This is beneficial from the business angle, as well. The European Neighbourhood Policy (ENP) provides a central framework and instrument for these endeavours. Increasing co-operation on cross-border issues such as telecommunications, energy and environment is relevant for the development of fresh business connections in the region, as well. I hope that the EU's Northern Dimension Policy as well as the co-operation in the Baltic Sea region can offer useful experiences and ideas to be built on in the Black Sea region.

Ladies and Gentlemen,

The overall image of and knowledge about the country play an important role in international investment decisions. The predictability of the business environment and beneficial social and economic development are of importance. Processes like ongoing liberalisation of the Bulgarian energy industry, forthcoming new Forestry and Telecommunications Acts, implementation of the Kyoto protocol, privatization of the Bulgarian Stock Exchange and municipalities´ increasing financial role, are of great interest to foreign business including Finnish companies.

Predictability and access to information are most important for smaller companies which are less eager and able to take risks. In this respect, it is good news for Finnish SMEs that Bulgaria is going to extend the investment promotion benefit to smaller companies, as well. While welcoming big investors, it is good to remember that small companies may turn big in the future and SMEs provide most jobs in all countries.

There are many sectors in Bulgaria which are interesting to Finnish companies: for example, infrastructure, energy and environmental technology, agriculture and forestry and particularly their mechanisation, information and communications technology, machines and equipment of the defence industries, and restructuring projects of industrial plants. On my business delegation, there is high-level Finnish know-how in these sectors present here today.

Ladies and Gentlemen,

As I wrote in my message in the business delegation brochure, commerce is a two-way street, and I believe that Finland is an increasingly interesting trade and investment destination for Bulgarian companies, as well.

The Finnish economy is today in good shape for international business. Last year our GDP grew at the rate of 5,9 per cent - almost as high as in Bulgaria. Finland continues to rank among the top countries in the world in economic and business competitiveness as well as in environmental sustainability. Luckily and as a result of clever governmental and private sector decisions, Finland has now three "legs" to maintain its economic success story: forest sector, metal and engineering and, as the latest one, high technology. Telecommunications equipment is today our number one export item.

The key to the Finnish success story has been investment in education, research, development and innovation. Investment in R&D in Finland - 3,5 per cent of the GDP - is one of the highest in the world. The share of the private sector in R&D investment is more than 70 per cent today, but it was the Government which initiated the process in the 1980´s with big public investments. Finland has had the best ratings in the OECD´s comparison of the quality of education. And our administrative system is also ranked one of the best in the world. Finland has had the best ratings in Transparency International´s Corruption index. The very close communication and co-operation between the public and private sector and various interest groups is the key of the Finnish openness and transparency.

Ladies and Gentlemen,

I would welcome a rising number of Bulgarian businesses to Finland to benefit from our excellent business environment and the technological know-how that can complement your current supply in the world markets. There is a lot of good will towards Bulgaria in Finland, and the increasing knowledge about Bulgaria in Finland hopefully contributes to strengthening Bulgarian business presence in the Finnish market.

In conclusion, Ladies and Gentlemen,

I would like to wish you productive business-to-business encounters at this Forum and all future success in your businesses. Thank you.

This document

Updated 9/3/2007

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