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bulgaria

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BULGARIA


  
   

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 15,608 13,600 12,600 74
         
GNI per capita
 US $ 1,790 1,650 1,580 110
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area(sq.k.m)
110,600

Population
7,707,495 

Capital
Sofia

Currency
Lev 

President 
Georgi Paranov


Private sector
% of GDP
40%
 

  

Background:
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 2000. 

Update No: 078 - (27/10/03)

US and Bulgaria celebrate 100 years of mutual diplomacy
The Bulgarians used to be known as the closest friends the Russians had in Central Europe, just as the Serbs were in the Balkans. They had both been liberated from Turkish domination by Russian intervention in 1878. Then all three are Orthodox.
Bulgaria in Soviet times was certainly the closest ally of the USSR in the Warsaw Pact. It was renowned as the workers' holiday resort for the whole bloc. It was known in addition for its fine wines and brandies; but also for its fork-lift trucks, its COMECON imposed speciality.
It is against this background that its new orientation towards the US needs to be put. The fact that the two countries are celebrating 100 years of diplomatic relations is just an accident. They were never allies beforehand. But since 1989 all has changed. The Bulgarians played a pivotal role in providing use of air bases in the Kosovo War and the recent Iraq War. Now they are going further.
The Bulgarians are to send a contingent of peace-keeping troops to Iraq. They are to come under Polish command.
The Bulgarian president, Georgi Purvanov, played host to his Polish counterpart, Alexander Kwasniewski, in August in Sofia where they discussed the role of their respective countries in Iraq. It is of course a massive novelty for both former Warsaw Pact countries to be partners of the US in an important international initiative.
The Poles are committed to leading their own area of Iraq, with the full intention, not just of carrying out policing duties, but of establishing the institutions of a civil society there. The Bulgarians are sceptical of the idea of being involved in setting up a civil administration. The two presidents discussed their differences here in an amicable spirit.

The economy is looking up
Not only is Bulgaria taking a greater interest in the wider world, the world is taking a greater interest in Bulgaria. The scale of foreign investment rose steeply by 50.3% in the first six months of the year over the same period last year, amounting to $526.9m. This put FDI on course to being over $1bn for the year. Switzerland ranked first among investors, with 34%, Italy second, with 8.5%, and Britain third, with eight per cent. In fact the US$1bn for the year was surpassed in early October when a €200m project in the energy sector was agreed. The National Electricity company (NEK) and three Austrian firms signed agreements for the construction of a hydro-electric power plant at the Vucha River. It is to take five years to build and will have installed capacity of 80MW and annual output of 185m kWh. Its owner will be NEK.
The country is also attracting more visitors, up 13.5% in the first seven months to 1.8m. Revenues for the first five months amounted to 353m. Germany and Greece provided most visitors, but Slovenian ones came over 20% more often. The number of EU tourists rose by over 20% too.
These two phenomena are going together. Foreign investors are eying tourism, former President of the Seychelles, Sir James Mancham, was recently in Sofia where he signed an agreement with the CEO of M3 Communications Group Inc., Maxim Behar, to cooperate in introducing major foreign investors to Bulgaria's tourism. "Well-developed tourism in the Seychelles gave me the chance to meet with successful business people from all over the world," Sir James was quoted as saying.
The former president expressed confidence that those people were also likely to become interested in doing business in Bulgaria. He and Behar are planning to organise next year an international investment forum entitled "Discover Bulgaria." 
Tourist industries are usually particularly highly labour-intensive. Bulgaria's is no exception. The number of unemployed has fallen sharply over the last year, although it is still 13% of the work force. That tourism had a lot to do with it is suggested by the fact that employment for those under 29 has particularly sharply risen, while for those over 50 it is still falling. Young people as waiters, maids and the like, are of course disproportionately more likely to find jobs in the industry than older people.

Trouble behind and trouble ahead
The process of accession of Bulgaria to the EU is now deemed "irreversible," the European Union Enlargement Commissioner, Guenter Verheugen, said some time ago. He was speaking to Bulgarian President Purvanov in Brussels last year but there are huge difficulties in the way.
The most important are issues needing to be tackled urgently, particularly further privatisation and a campaign against crime and corruption
Real power in Bulgaria, however rests with the premier, not the president. Hence doubtless why their former monarch, Simeon Saxe-Coburg- Gotha, who had last ruled them as an infant in 1943-46, preferred the premiership to the presidency in March 2001, when he successfully contested the previous government in parliamentary elections. But that is a long time ago.
The former government was doing far too good a job to be popular, carrying out necessary, but painful reforms. But that is now true of the newcomers, who are not so new any more.
The new government has taken its time to establish its credentials with the international community, but is now being given BB- rating by international agencies.
The economy is continuing to grow, GDP rising by 4% this year, after 4.4% in 2001.The current account deficit is continuing to grow from 5.9% in 2001, to 6.5% in 2002, and to over that in all probability this year; but this is typical of a transition economy.

Finance minister resigns on corruption charges
The finance minister resigned in August on charges of corruption, not so new an indictment in Bulgaria. Milen Velchev was one of a group of young, western-educated reform economists in the government and the charge came as a great surprise. It is not yet certain if Saxe-Coburg will accept the resignation.
Bulgaria is on course to become a full-fledged European nation and a member of NATO by 2007. But it will take time for it to become prosperous and free of the detritus of communism, crime and corruption.

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AVIATION

Russia to supply Bulgarian airlines with 4 planes

Under a deal signed recently, a Russian aircraft manufacturer will supply Bulgarian airlines Air Sofia and BH Air with four medium-range Tu-214 planes, Interfax News agency reported.
Nail Khairullin, director general of the Kazak-based state-owned Gorbunov KA-PO, signed the contract with Air Sofia president, Lilian Todorov and BH Air Director General, Yanko Ivanov, during a visit by a Russian delegation to an international fair in Plovdiv, Bulgaria, the news agency quoted the government of Russia's Tatarstan region as saying. The delegation represented the Tatarstan government. 
The Tu-214 can carry a maximum of 210 passengers to a range of 5,650 kilometres. KAPO executives also visited Bulgaria in 2002 to show off their mid-range Tu-214 liner.

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FOREIGN INVESTMENT

President urges Turkish companies to invest in Bulgaria

At a Bulgarian-Turkish business forum on 8th October Bulgarian President Georgi Purvanov urged Turkish businesses to invest in Bulgaria, BTA web site has reported. 
In his speech at the business forum on the second day of his three-day official visit to Turkey, Purvanov said that Bulgaria is on the threshold of Europe and by investing and doing business in Bulgaria, Turkish companies will have a chance to enter the EU before their country actually becomes a member. 
The president underscored several other factors that make Bulgaria the right place to invest: political stability, the lasting stability of the macroeconomic parameters, the recognition of the EU that Bulgaria is a functioning market economy and a modern legislation that facilitates foreign investment. 
According to the president, a priority in the bilateral economic relations is infrastructure and work on Corridors VIII and X. He stressed that active political dialogue between the two countries -the presidents of the two countries alone have met six times in the last two years - is conducive to more intensive business relations. 
Participating in the business forum were over a hundred companies of the two countries. Speakers expressed the view that enhancing two-way business requires increasing the capacity of the border crossings and checkpoints and eliminating bureaucratic barriers. Turkish business people called for relaxing the Bulgarian visa regulations for business travellers. 
Statistics quoted at the forum, show a substantial increase in trade. The commercial exchange in 2002 was 28 per cent more than the year before and in the January-July 2003 it was 47 per cent more than this time last year. The expectations are for two-way trade to fetch US$1bn this year.

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FOREIGN LOANS & AID

World Bank loan emerges for efficient energy projects

The World Bank and the Global Environment Fund will loan US$10m to Bulgaria to help it set up a fund to finance projects for efficient use of energy, an official said recently, bnn News Agency reported. 
Minister of Economy, Milko Kovachev, noted that the law was aimed at improvement and rational use of energy and "is part of the general policy to cut costs for final consumers." The fund will loan money for thermal insulation of apartment houses.

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TRANSPORT

EIB loan for road projects on the cards

The European Investment Bank (EIB) will provide €60m for repair works on Bulgaria's road network, reports New Europe. The contract with the institution was recently ratified by the government. The loan will be used for a reconstruction project, named Transit Roads IV, aiming for the renovation of about 427km of Bulgaria's roads. 
The modernisation of the harbour of the town of Lom by the Danube River and the reconstruction and extension of the Sofia airport are also envisaged. 

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