% of GDP
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: 076 - (28/08/03)
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, Georgi 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. There is enormous distress over the 20% rate of unemployment, as the old jobs in outdated industry are destroyed.
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.
Wheat growers to enjoy new subsides
The Ministry of Agriculture has announced it would extend a 30.25m Bulgarian levs subsidy for wheat growers in the country, who expect a three-fold decline of yields this year. 27.75m levs of the subsidy are to be extended for the next sowing campaign in September and 2.5m levs are for the current harvest, the ministry said, bnn reported. The subsidy is planned for wheat fields of 250,000 hectares.
Wheat growers expect yields to plunge this year to some 1.2 metric tonnes per hectare from some 3.5 metric tonnes per hectare last year, due to severe cold weather that killed most of the wheat seeds last winter.
Kovachev pledges fair sale for electricity companies
At a meeting with Bulgaria's experts and trade union leaders, Energy Minister, Miko Kovachev, has assured them of a fair sale of the electricity distribution companies, New Europe reported. Kovachev stressed that they would not be sold at any price, "because this is an investment in the future of all Bulgarians."
The meeting came days after workers from companies slated for privatisation staged a series of protests in front of Bulgaria's Parliament. Kovachev underlined that experience in the sector and a record of profit-making operations in a competitive business environment will be the main requirements for the future buyers.
Strategic investors with a minimum of one billion Euro of their own capital and annual sales of over 8-12 billion kWh will be eligible for the privatisation of 67% stakes in Bulgaria's seven electricity distribution companies.
Verde Engineering launches new wind project
German consortium, Verde Engineering, will inject €11m in northern Bulgaria to build wind power facilities. The consortium contracted Alstom to implement the project, novinite has reported. German consultants have studied the climate of the region around the city of Shumen, 340km northeast of Sofia. The Shumen municipality has already granted the land for the wind power generators.
Verde's plan is just one of several wind power projects in Bulgaria. According to the country's State Committee on Energy Regulation, 1,700-megawatt facilities have been projected to produce wind-generated electricity. Bulgaria has already seen the construction of trial generators. The investors' vision sets wind power facilities not only in the vicinity of Shumen but also on the northern Black Sea coast, on the outskirts of Sofia and in the city of Sliven, 276 east of the capital.
The main hurdle that wind entrepreneurs face in Bulgaria is the price of their production fixed by the energy regulation committee. Currently, it is set at 0.06 levs per kilowatt-hour excluding Value Added Tax (VAT). According to investors, the prime cost per kilowatt-hour ranges from 0.12 to 0.14
ACBH-Alico ups stake in Post Bank
Greek company, ACBH-Alico Balkan Holdings Ltd recently announced it had increased its majority stake in the Sofia-based Post Bank to 91.71 per cent by purchasing a 5.47 per cent stake in the bank from the Bulgarian insurance company, DZI.
"This transaction shows the development of our bank and demonstrates once more the serious intentions of our shareholders, who are among the largest investors in Bulgaria," Post Bank CEO, Panagiotis Varelas, was quoted as saying by bnn.
The rest of the Post Bank stock is owned by the Sofia-based Bank, DSK, with 5.03 per cent, Bulgarian Posts EAD with 1.4 per cent and the National Palace of Culture in Sofia- 0.46 per cent.
Government guarantee on JIB loan
Bulgaria's government has decided to provide guarantees for an 187m Euro loan that Japan's Investment Bank (JIB) is providing for the reconstruction of a major coal fired power plant in southern Bulgaria, the state TV has reported, cited by bnn.
The bank is loaning the money for the rehabilitation of the Maritza Iztok II lignite fired electric power plant, 300 kilometres east of Sofia.
Japan's Mitsui Corp is the main contractor in the project that will cost a total of 226m Euro, the report said.
INVESTMENT BACKGROUND REPORTS
Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports.
For further information email:
Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly newnation reports and the complete worldaudit democracy check for the low price of
US$12. The print-out would be a good companion to take with you. Having read it, you might even decide not to go!
To order please click here: