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GOOD NEWS FROM BULGARIA |
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Written by Dr. Jack Wheeler
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Friday, 25 July 2008 |
I fell in love with Bulgaria when I was first there as the
Soviet empire was collapsing in early 1990.
There's thousands of years of history - Bronze Age tribes,
the Ancient Greeks, the Romans, medieval Christian kingdoms, hidden monasteries
protecting Christianity from centuries of Moslem oppression by the Ottoman
Turks, finally gaining independence in 1908 only to lose it to the Soviet Union
during World War II, and now free at last.
And all through this, Bulgarians forged and kept a Christian
culture and heritage. Hundreds of
thousands of people come from all over the world to visit the extraordinary
monasteries such as Rila
the Bulgarians built to preserve their culture from Moslem imperialism.
Even more visitors - millions in the height of the summer -
come to vacation on the gorgeous beaches of Bulgaria's Black Sea coast. In the winter, skiers flock to ski resorts
high in the Balkans.
It's a country of such profusion of flowers everywhere
there's an entire valley called the Valley of Roses. You couldn't ask for a more hospitable warm-hearted people - or
ask for a better way to be shown hospitality, for Bulgarians really know how to
make good wine and are more than happy to share a glass with you at every
opportunity.
And speaking of opportunity...
There are more opportunities to make a lot of money
in Bulgaria than almost anywhere else in the world. Especially because a major obstacle of those opportunities was
removed this week.
On Wednesday (7/23), the European Union suspended $750
million in aid to Bulgaria for fraud and corruption regarding EU aid
disbursement.
Bulgaria became a full member of the EU in January 2007,
qualifying for enormous amounts of EU subsidies to bring its government
services and economy up to EU standards.
The $750 million aid suspension is only a shot across the bow.
Bulgaria is due to receive a total of $10 billion - $10
billion - in EU aid between now and 2013.
And the Eurocrats in Brussels who are dispersing it are determined to
end the graft and corruption within the Bulgarian government agencies receiving
it.
Bulgaria's Prime Minister, Sergey Stanishev, couldn't be
happier.
Widely recognized as the smartest man in Bulgaria, Stanishev
is determined to maximize the attractiveness of his country to international
investors. Since becoming PM in August
2005, Bulgaria now has a 10% flat tax on income, 0% (yes, zero) capital
gains tax, 100% foreign ownership of land and businesses, and no limits on
repatriation of profits.
But he knows that isn't enough, that his country and
investors need a dependable rule of law, with government crooks and gangsters
not in office but in jail. So he is
celebrating the EU aid freeze.
Bulgaria's President, Georgi Parvanov, is not.
While Stanishev is a pro-American pro-capitalist, Parvanov
is a pro-Russian pro-communist. Six
months after he was elected to a second five-year term, in July 2007 the
Bulgarian Commission on Communist State Security Files released documents
proving that Parvanov was a secret agent for the Soviet KGB in Bulgaria
code-named "Gotse."
Further, the commission released documents proving that a
number of Parvanov's key advisors and government appointees were also KGB
agents during the Soviet-rule 1980s.
Impeachment proceedings were launched by opposition
parliamentarians, and now thanks to the EU freeze, can no longer be stonewalled
by Parvanov's lackeys. The EU has made
it very clear that it will not be satisfied, that it will not release any more
aid, until "high government officials" are imprisoned.
Thus the way is being cleared for what is perhaps the best
set of investment opportunities in the world right now. Here's one example.
Agricultural land.
An acre of good farm land in Bulgaria ("Bg ag-land") has doubled in
price since joining the EU in January 2007 from $500 to $1000 today, compared
to $6,000 in northern France/southern Germany which have similar soil and
rainfall conditions.
By 2012, Bg ag-land is expected to approach 80-85% of
European levels while labor costs will remain less than 50%. The world-wide need to produce more food is
growing ever more acute. McKinsey is
now predicting that e.g., the world demand for meat will increase five-fold in
the next few years as hundreds of millions of Chinese and Indians, who have
never had much of it in their lives, will afford it.
The stumbling block: Bg ag-land is broken up into tens of
thousands of small farms that cannot be farmed economically. The solution is to know how to consolidate
land holdings into major ag-production facilities. An acquisition team could purchase and consolidate several
thousand acres into farms capable of EU economies of scale.
A 10,000 acre consolidation for $10m would have an expected
value of $50m (80-85% of $6k per acre or average of $5k) by 2012.
But it won't cost investors into a Bg ag-land investment
fund $10m - because, if structured properly, the EU will subsidize 50% of
the land purchase cost. Thus $5m can
be worth $50m, ten times, in four years.
A thousand-acre purchase of $500k (with the 50% EU subsidy) would be
worth $5m. A fifty thousand acre purchase? It's doable. Do the math.
There are many other examples: food production, canning factories, cheese and meat processing,
real estate development. There is
enormous potential for "medical tourism" - international certified
state-of-the-art medical facilities for cosmetic surgery, sports medicine,
laparoscopic surgery, for which there is an average two-year wait in Western
Europe. All of these investments can
qualify for a 50% EU subsidy.
So - want to come to Bulgaria with me and learn about it
all?
I'll be taking a small group of 8-10 qualified folks to
Bulgaria at the end of September. In
one week - leave home Friday September 26, back home Sunday October 5 -
we'll meet Prime Minister Stanishev and his key officials, plus the country's
top bankers and businessmen. We'll tour
the country to see the best ag-land, plus tourist wonders like the magic medieval
capital of Veliko Turnovo, the 3,000 year-old Black Sea now-luxury resort of
Nesebar, the monasteries of Troyan and Rila.
We'll also consume copious amounts of Bulgarian wine. Who says you can't make a lot of money and
have a lot of fun at the same time?
It'll cost $7750.
You get to Sofia, Bulgaria's capital on 9/26 and I'll take care of
everything else. If you want to come,
don't waste any time letting me know:
This email address is being protected from spam bots, you need Javascript enabled to view it
.
An opportunity of this magnitude has a short life-span. Everything came into focus this week with
the EU freeze - and Moody's
on the same day (7/23) giving a thumb's up approval of Bulgaria's banking
system.
That's why I put this investment trip together in the last
48 hours. We have to move quickly. By late September, all of my arrangements in
Bulgaria will be set - and all the summer crowds will be gone. The weather will be great, the opportunities
enormous, the place to ourselves. Time
to take advantage of the good news from Bulgaria.
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