Bulgaria’s competitive ICT and business process outsourcing sectors are waiting to be tapped by Korean companies, Bulgarian Ambassador to Korea Petar Andonov told The Korea Herald last week.

At a time when Korea’s IT industry profits are dwindling amid a sagging economy, Bulgaria offers a blue ocean of well-educated workers and a business-friendly environment, particularly for small and medium-sized enterprises, Andonov said.

“Korea’s strength in developing computer hardware and Bulgaria’s strength in software can be harmonized as part of President Park Geun-hye’s ‘creative economy’ road map,” he said. “Despite Bulgarian workers’ high education credentials, operational and labor costs remain one of the lowest in Europe.”

Bulgaria has a myriad of small and medium-sized companies doing contract programming for multinational firms, including BMW, SAP, HP, IBM, Boeing, Nortel, Microsoft, Cisco and Oracle. 

The country has a strong tradition in informatics education from the communist era, as it was the largest manufacturer of personal computers within the Council for Mutual Economic Assistance alliance.

To this day, an “unusually high number of students” major in electronics, engineering and computer sciences in university, giving Bulgaria its reputation as the Silicon Valley of Eastern Europe, he said.

The ICT sector in Bulgaria has taken up a growing share of the national economy through exports: Bulgarian ICT companies work as subcontractors in foreign projects or specialize in importing, assembling and selling hardware and software.

Bulgaria joined NATO in 2004 and the EU in 2007 ― matters of “civilizational choice,” according to Andonov. The country is currently positioning itself as a regional transport and logistics hub at the crossroads of Europe and Asia, he added.

“We are trying to diversify our energy sources as part of European Union’s Juncker Plan and Energy Union (a massive 315 billion euro scheme to boost investment and create jobs),” the ambassador explained, stressing that energy security has been a vital national concern in light of the country’s total dependence on Russia for natural gas import.

The ambassador noted that Samsung C&T, Hyundai Heavy Industries and Korea South-East Power Corporation have invested in Bulgaria’s solar energy sectors. “More Korean companies can participate in various energy infrastructure projects, including hydropower generation facility construction along the Danube,” he added.

Investing in Bulgaria gives companies wider access to markets in Europe, the Middle East, Central Asia and the Commonwealth of Independent States, and Southeastern European countries not yet part of the EU ― Bosnia and Herzegovina, Serbia, Macedonia, Montenegro, Kosovo and Albania.

Bulgaria’s currency board arrangement has kept the foreign exchange rate fixed at 1.95 lev per euro, preventing currency fluctuation and ensuring predictability for investors. Both corporate and personal income taxes are 10 percent.

After the EU-Korea free trade agreement came into force in July 2011, trade between Bulgaria and Korea increased 35 percent annually, reaching the highest volume at $273 million. Cumulative Korean investment in Bulgaria is around $254 million.

In 2013, Bulgaria exported $175 million worth of precious metals, electronic microchips, agri-food and seafood to Korea; Korea exported $126 million euros worth of cars, tires, electronic goods, home appliances and semiconductors to Bulgaria.

“I wish to export more of our rose oil, organic food, pharmaceutical products, meat products and wine to Korea,” Andonov said.

Bulgaria and Korea established a diplomatic relationship in 1990 and strategic partnership in 2010. The approaching 25th anniversary of ties on March 23 will set a benchmark for further cooperation in all fields, he said.

“The last 25 years of our relationship was spearheaded by the market opening, but the next 25 years and beyond will certainly depend on our younger generation,” Andonov said. “People-to-people exchanges through traditional and popular culture can do what governments and businesses cannot.”

The Sofia University in Bulgaria has a Korean language and culture center and Hanguk University of Foreign Studies in Seoul has a Bulgarian language department.

Andonov was a foreign policy and economy analyst at TV Europe (2006-09) and U.S. Radio Free Europe (2003-06), Bulgarian ambassador to Japan and the Philippines (1998-2003), economic adviser to the prime minister (1991-92) and president of Bulgaria (1997-98).

By Joel Lee (joel@heraldcorp.com)