Yuriy Isakov: South Stream Key Direction in Moscow-Sofia Interaction

Diplomatic Channel | September 19, 2014, Friday // 17:24|  views

Novinite.com is interviewing Sofia-based ambassadors of Bulgaria’s largest trade partners. Here is the interview with Yuriy Isakov, Ambassador Extraordinary and Plenipotentiary of the Russian Federation to the Republic of Bulgaria.

What major bilateral projects are currently in the making?

Undoubtedly, a key direction in our bilateral interaction is the implementation of the strategic South Stream project on Bulgaria’s territory. Currently Bulgaria has suspended work on the construction of the gas pipeline but in our view all issues, including those relating to bringing the project in compliance with the requirements of the EU’s Third Energy Package, will be resolved in the nearest time possible and construction will commence.

I would like once again to highlight the fact that our Bulgarian partners and the other transit countries are interested – for two reasons - in having no problems standing in the way of the implementation of the project and the commissioning of the pipeline according to planned deadlines.

First, the repeated statements coming from Kiev about a possible suspension of Russian gas transit through the territory of that country reaffirm the importance of South Stream for guaranteeing Europe’s energy security. This project eliminates risks to gas transit by linking Russia directly with European Union consumers.

Second, construction of South Stream means considerable investment in Bulgaria’s economy plus revenue from transit fees, taxes, etc. which will total about BGN 5 B for the period to 2040. This amount is quite considerable, especially taking into account the problems associated with meeting state budget targets and absorption of EU funds. This is why this project will undoubtedly give a strong boost to Bulgaria’s economic development.

At the same time, economic cooperation between Russia and Bulgaria is not limited to the construction of South Stream. The ongoing modernization of Russian company Lukoil’s petrochemical complex in Burgas stands out among other big investment projects.

I would also like to highlight the expansion of Gazprom’s filling stations network and the completion with funding from Moscow’s regional government of the unique health and recreation complex Kamchia near Varna. A number of Russian companies have shown interest in taking part in the development of Bulgarian transport and logistics sector.

What are, in your opinion, the greatest challenges in bilateral relations?

Relations between Russia and Bulgaria have been faced with a number of challenges which hinder the full-scale use of their potential.

Actions against Russia undertaken by the EU in relation to events in Ukraine have inevitably impacted the development of the Russian-Bulgarian dialogue. For example, our Bulgarian partners have decided to postpone the meeting of the Intergovernmental Russian-Bulgarian Commission on Economic, Scientific and Technological Cooperation planned for April 2014 in Sofia. The visit of the Chairman of the State Duma of the Federal Assembly of the Russian Federation scheduled for May has also been postponed.

The EU’s policy of imposing sanctions also has negative consequences for our bilateral relationship. Russia was forced to ban imports of EU agricultural products in response to the restrictions imposed by Brussels. As a result, Russia’s market was closed for Bulgarian fruit and vegetables.

In addition, the difficult political situation existing in Bulgaria over the last year and a half hasn’t been supportive to the expansion of the capacity of Russian-Bulgarian economic relations.

It is not easy at all to build a constructive dialogue on key items of bilateral agenda amidst protracted instability and changes of government.

Nevertheless, I am convinced that momentary, ad hoc developments can’t shake the fundamental values – the feelings of brotherhood and close emotional relationship, our common interest in developing mutually beneficial cooperation in all spheres. I am sure this is fully in line with the strategic interests of both Bulgaria and Russia. I don’t doubt that through joint efforts we’ll succeed to overcome negative trends and take cooperation between Bulgaria and Russia to a rising trajectory.

Where do you see the greatest potential for cooperation and untapped opportunities?

I think the potential for developing bilateral trade hasn’t been used in full yet. In the past few years the bilateral trade volume has shrunk for the first time. And this happened against the backdrop of old imbalances such as domination of energy resources in Russian exports to Bulgaria and low volumes of Bulgarian exports to Russia.

In particular, according to data of the Bulgarian National Statistical Institute bilateral trade turnover for January-June declined by 24% year-on-year to BGN 3.93 B with Russian exports down 26.5% to BGN 3.43 B and Bulgarian exports to Russia down 6.3% to BGN 500 M.

The situation can be improved with the help of the first Bulgarian ferry having been commissioned - in addition to the two Russian ferry boats already in use – to operating a direct Varna-Caucasus rail link.

We see good opportunities for stepping up bilateral contacts in the high-tech sphere, for example in technology parks. The mutual interest is there.

We should boost the dynamics of other directions of our bilateral interaction through joint efforts. Russian investment in Bulgarian property has dwindled by 30-35 percent year-on-year in the first half of 2014. In addition, Russian tour operators have registered a drop in Russian tourist numbers this summer.

To improve things, greater attention should be paid to providing better safeguards of the legal rights of Russian property owners and potential buyers. Additional advertising of Bulgaria’s tourism landmarks – particularly in Russia’s regions – would also help. And those landmarks exist not only along the Black Sea coast.

In short, there is a wide field for joint work with Bulgarian partners in a number of directions. A suitable venue for discussing prospects for joint activities will be the 15th meeting of the Intergovernmental Commission, the timeframe of which we are going to define together with the Bulgarian side after the formation of the new government of the Republic of Bulgaria.

How are Bulgaria and Bulgarians being perceived by your compatriots?

Our two nations are members of the united Slav family. Many things unite us. Not only the Orthodox faith, the Cyrillic alphabet that had come to us from Bulgaria, the similarities in traditions and mentality but also our common, centuries-old history that had bound our kinship on genetic, blood level.

As I’ve already said, the understanding between the people of our two countries is a constant value not depending on the development of the foreign policy situation. Both Russians and Bulgarians are very open and emotional people. We easily find common language, half a word will suffice to understand each other.

Many of my compatriots have earnestly loved your country and give their preferences to hospitable Bulgaria when choosing where to spend their holidays or buy second home. In doing this, Russians are showing an ever growing interest in specific kinds of tourism. Your country is phenomenally rich in monasteries and churches unique in their beauty and spirituality, it is rich in architectural masterpieces of various ages, natural wonders.

Honestly speaking, I myself try to pursue every opportunity to discover new interesting places in Bulgaria and most importantly – new interesting and benevolent people.

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Tags: Russia, Bulgaria, ambassador, Yuriy Isakov, South stream, European Union, property owners, Russian investment, Russian tourists, Varna-Caucasus, Kamchia, Gazprom, Bulgarian property, Lukoil, trade turnover, Russian exports, Bulgarian exports


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