Bulgaria: Mobsters scare foreign investors away to Romania

Luni, 12 mai 2008, 9:12 English | Regional Europe

Corruption is omnipresent and everybody knows it, but nobody reacts to it, a foreign investor in Bulgaria who opted not to reveal his identity has declared, quoted by Reuters. A Reuters report published by the International Herald Tribune describes the situation in the neighboring country, dismantling the myth of foreign investments there: the biggest part of foreign funds are located in construction works and real estate, sectors seen as optimal for money laundering.

Economic analysts and players on the market, quoted in the article, sustain that the situation in Bulgaria is very tense. All actors on the market underline the lack of institutional reforms, especially after entering the European Union.

Another characteristic of the Bulgarian corruption is the entanglement between politics and organized crime. In Romania, a diplomat argues, this issue is not a real problem. Sources argue that links between magistrates and organized crime heads are intertwined with former KGB officers, according to Reuters.

Eurasia Group analyst Jon Levy says that the situation is serious for investors. He adds that this explains the low foreign direct investments in Bulgaria as compared to other East European countries including Romania. Currently, corruption has become a major issue in Bulgaria.