% of GDP
a free service
Bulgaria earned its independence from the Ottoman Empire in 1878, but having
fought on the losing side in both World Wars, it fell within the Soviet sphere
of influence and became a People's Republic in 1946. Communist domination ended
in 1990, when Bulgaria held its first multi-party election since World War II
and began the contentious process of moving toward political democracy and a
market economy while combating inflation, unemployment, corruption, and crime.
Today, reforms and democratisation keep Bulgaria on a path toward eventual
integration into NATO and the EU - with which it began accession negotiations in
Update No: 067 - (19/11/02)
The premier of Bulgaria, Simeon Saxe-Coburg-Gotha, is struggling with his new role, not one that fifty years or more of exile really prepared him for. He was king for a few years as a boy, but grew up in Madrid, where he lived for years as a businessman.
Leader of the reform team
This experience has at least made him aware of both the potential of reforms, if wisely conducted, and the pitfalls of corruption. Franco's Spain was politically regressive, but from 1959 under the rule of Opus Dei it was economically dynamic. Then after the dictator's death it entered the EU, from which it has thrived.
Simeon has something similar in mind. But his Opus Dei are not austere Catholic intellectuals, but young technocrats schooled in the ways of Wall Street and the City of London. Moreover, EU membership beckons soon, as does membership of NATO.
But, so far the results are not yet in and the population is disillusioned. Only the insiders and the corrupt beneficiaries of shady privatisation deals are doing well.
Official figures show GDP rising by four per cent annually. But this is from a low level and has not translated into gains for the population at large. There is not much sign of trickle-down; but plenty of trickle-out.
The end-game of the king
It was unrealistic for the electorate to expect miracles from Simeon, simply because he was once their monarch. He rashly made a promise to double living standards in 800 days, that is by late 2003, the sixtieth anniversary of his accession as king in 1943. This was never viable.
The general slowdown in the EU, where annual GDP growth is averaging a mere 0.7%, and the febrile post - 9:11 global climate give him certain excuses. But like so many governments in transition countries, the rule of his National Movement may be only a one-term affair.
Balkan Airlines creditors reject recovery plan vote of liquidation
The creditors of Balkan Airlines have rejected a proposed recovery plan and voted to go ahead with the winding up of the air carrier, BTA web site has reported.
The creditors' decision was announced by Judge Kostadinka Nedkova of Sofia City Court, who was in charge of the Balkan Airlines case, following the 29th October meeting of the creditors.
Of the creditors that attended the meeting, the direct receivables total over 22m leva. Only 21 per cent of them voted in support of the recovery plan, Judge Nedkova said.
Balkan trustee in bankruptcy, Olga Milenkova, told the press that the creditors' vote means discontinuing the operations of the air carrier, laying off the staff and liquidating the assets. Some Balkan Airlines flights will be cancelled right away.
Asked what will happen with the tickets that have been sold for future flights, Milenkova said that there are options: the passengers get a refund, are flown by Balkan Airlines, or are transferred to other carriers.
Balkan Airlines has contracts for charter flights for its winter schedule and not carrying them out will result in losses slightly over US$1m. It will lose another US$500,000 from tickets and flight bookings, Milenkova said. Asked what assets Balkan Airlines will end up with after the liquidation, she said that it will depend on what the new market valuation shows.
The recovery plan proposed by Olga Milenkova and Khristo Molov failed to get the approval of the biggest creditors of the Bulgarian flag-carrier: the State Receivable Collection Agency, the Air Traffic Services Authority and Sofia Airport...
Three bidders have offered to buy Balkan Airlines. The first was Bulgaria Airlines, which stepped up on 28h August with an offer to buy all Balkan assets right after its winding up. The second was Citrad Airlines, also a Bulgarian entity, which submitted an offer on 2 September. The third offer came on 10 September when the owners of the Bulgarian Hemus Air submitted an offer at the Transport Ministry.
FOREIGN ECONOMIC RELATIONS
Hungary calling for reciprocal investments
"Cooperation between Bulgaria and Hungary can be boosted not only through increased trade exchange, but also through reciprocal investments in bridge constructions and port rehabilitation," Hungarian President, Ferenc Madl, stated at a Hungarian-Bulgarian business forum, which was organised in the framework of his recent visit to Sofia. In his opinion the most convenient formula for cooperation lies in the tourist sector, New Europe reported.
Nearly 10,000 Hungarian tourists spent their summer holidays in Bulgaria this year, up by 3,000 over the previous summer. Bulgarian President, Georgi Parvanov, called on the Hungarian business to increase investments in Bulgaria, pointing to the proximity of the two countries as the main advantage. "Bulgaria's advantage for business development is its political, economic and financial independence," the Bulgarian President noted. Current figures show that Hungary's investments in Bulgaria do not exceed US$20m.
World Bank with new loans to assist economic reforms
The World Bank is to allot US$750m to Bulgaria over the next three years, it was announced by the World Bank's country manager to Bulgaria, Oscar de Bruyn Kops, novinite.com reported. Of that amount, US$450m will go to support the economic reforms, the rest will be allocated to special projects.
Kops also said that poverty in Bulgaria had gone down by two-thirds since the crisis in 1997 yet noted that such number was still ranking in rather high levels. He added that some of the priorities of World Bank in Bulgaria were higher living standard and overcoming of poverty.
Unionbank gets credit lines for SMEs, says Gospodinov
The US$5m credit line for loans to small and medium enterprises has been extended to Unionbank by the International Finance Corporation (IFC). The contract with the World Bank's institution for private sector development was signed in late October.
As Unionbank Executive Director, Evgeni Gospodinov said, the terms of the credit line are standard but the advantages are that its repayment term is seven years and that medium enterprises will be bale to receive up to US$250,000 repayable in five years. "The trend is to increasing the amount of financing, the exposure for a client can reach US$500,000," he added. In October, the central and local credit committees of Unionbank approved ten contracts for US$1.600m whilst three of them, exceeding the sum of US$600,000 have been already
Oracle seeks alliance in e-government
Software company Oracle wishes to become a strategic partner of the Bulgarian government in the e-government project, reports New Europe. The regional director of the company explained that Oracle already had contracts with the European Union, the Serbian, Spanish and British governments, novinite.com reported recently. Oracle is willing to offer software to Bulgarian universities. Bulgarian Economy Minister, Vassilev has discussed with Oracle representatives possibilities for e-government creation during his visit to the United States.
MINERALS & METALS
Bulgaria extends option of subsidizing steel industry to 2006
The possibility of providing state subsidies to restructure the steel-making industry has been extended by eight years, reckoned as of 1998. The cabinet approved the draft additional protocol to the Bulgaria-EU Association Agreement, the government's information service said on 31st October, BTA web site has reported.
The ratification of the additional protocol drafted by the European Commission solves the question raised by the EU about the one-off state subsidy released for the privatisation of the Kremikovtsi steel works.
Bulgaria is to present for approval by the European Commission a programme for restructuring the industry and a business plan for Kremikovtsi. The European Commission will render technical help in drafting the documents.
The Council of the European Communities approved the draft additional protocol on 29th July. Its ratification is critical for closing the Competition Chapter in this country's EU accession talks.
SAC overrules PA decision on Bulgartabac purchase
The Supreme Administrative Court (SAC) has overruled the decisions of the Privatisation Agency (PA) with which the consortium of Tobacco Capital Partners and Clar Inns was named the winning bidder for an 80 per cent stake in Bulgartabac Holding, New Europe has reported.
PA said that it had anticipated the official decision of the Supreme Administrative Court. After it considers the motives for the decision of the court, the agency will decide on the actions that it will undertake. Tobacco Capital Partners and Clar Inns refused to comment the court's decision before they receive it officially. According to the court, the Privatisation Agency had to ask for one-off improvement of the bids, because of the favourable changes in the financial condition of the company. In the opinion of the court this is a violation of the competition regulation. The court decision also includes direction in which the privatisation procedure should continue. The decision can be appealed within a 14-day period. The agency can also take a decision for a new choice of an exclusive buyer.
Vab-Vatech to support Burgas Port expansion
The Austrian consortium Vab-Vatech, along with its trade partner, the Japanese corporation Nichimen, will provide equipment for the expansion of the port of Burgas.
The director general of the consortium and the two executive directors of the port Burgas will sign the contract. The equipment that will be provided amounts to US$25.766m and working operations are expected to be initiated next year and wrap up in 2005.
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