|
Archived Articles
Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
|
 |
Fresh capitals from West,fresh capitals from East Eastern Europe cannot complain about its current economic situation. It's now in the epicenter of financial interests unheard since the fall of the communism. Western pension funds and Russian 'oil' dollars are competing for space under the sun. Not all countries are enjoying the same influx of fresh capitals. Thos who are have only to secure reasonable capitals returns and enjoy the ride.
Western rationaleThe reasons why big Western capitals, e.g. West European pensions funds, are looking toward Eastern Europe, is simple; they look for higher long-term returns. There are several reasons why they don't find sufficient the existing returns in their home countries. There is a whole combination of factors and it wouldn't be correct to enumerate and elaborate on them all in such a short article; they jump from almost every financial and economic analysis we can find these days. Most of continental European economies are stagnating, which may or may not be temporary phenomenon. The European population is aging fast, which isn't temporary phenomenon for sure. With no bright expectations of increasing the capital returns from within these countries the right question is where to invest it with highest possible returns. Some parts of Asia, Eastern Europe, the Untied States and couple of other places here and there offer right combination of sufficient economic growth and adequate level of economic and financial freedom, making these investments both secure and relatively more profitable.Eastern Europe is just one of the places where such long-term investments may move to. Caring not about short-term returns these capitals may go to big infrastructure projects, roads, power stations, ports, and also to new real estate projects. The East European countries that may benefit mostly from this capital transfer are first of all the new European Union members, but also the countries considered as future members. Not all countries within these groups will equally benefit from this financial bonanza. In additional to considerations such as the level of returns the investors will look also at the legislation dealing with the capital gains taxes and the periods after which these taxes may be eliminated.
Russian rationaleThe rationale for this source of new investments is much more complicated. In fact there are at least two very different sub-groups of investors coming from Russia, and their motivations aren't always purely economic. Among them we may distinguish the state and some non-state actors.The Russian state, i.e. the federal government, has some extra billion 'oil' dollars that doesn't allow entering the country out of fear of high inflation, boom of imports and elimination of many home industries. So the rationale is to 'export' this inflation problem to other countries and what a better place for such export than countries that were economically linked to Russia for decades (Eastern Europe) or even centuries (Commonwealth of Independent States). The huge chunk of these money go to countries like Ukraine or Belarus, but substantial amount lands in the Baltic states, and as far as we can see in some Balkan and Central European countries as well. The common thing between the West European pensions funds and these Russian state investments is that they aim long-term returns. The main difference is that in the Russian case they may have some political conditions attached. The second group of Russian investors actually rarely comes directly from Russia to Eastern Europe. These are private investors that have accumulated under suspicious circumstances certain amount of capitals after, but especially before the recent 'oil' boom and are in constant need of new places and countries to 'wash up' their money. The reason why they may finally land in Eastern Europe is the same as for the Russian state; they utilize the old economic connections and friendships. Unlike the Russian state capitals, however, they don't attach any political conditions save one, not to be disturbed with questions about the origins of their money. The geography of their activity closely follows the regions that stand outside the Russian political sphere of interests. For this reason they represent more short-term investments in some CIS countries, considered more risky, and more long-term investments in Central and Eastern Europe.
--------------------
See also the directory of companies providing real estate services in, and general real estate information of Europe.
|
See also:
