GOOD NEWS FROM BULGARIA

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:  [email protected]. 

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.