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BULGARIA


  
  

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 19,859 15,608 13,600 69
         
GNI per capita
 US $ 2,130 1,790 1,650 106
Ranking is given out of 208 nations - (data from the World Bank)

Books on Bulgaria

REPUBLICAN REFERENCE

Area(sq.k.m)
110,910

Population
7,517,973 

Capital
Sofia

Currency
Lev 

President 
Georgi Purvanov

Private sector
% of GDP
40%
 



Update No: 094 - (24/02/05)

European leaders in Sofia launch initiative to fight discrimination of Roma
Leaders from Central and Eastern Europe launched in Sofia on February 2nd the Decade of Roma Inclusion - an international initiative to improve the status of Roma, Europe's most vulnerable minority. The moving commemoration of the 60th anniversary of the liberation of Auschwitz and the Nazi death camps on January 24th did not emphasise sufficiently that two million Roma perished in the Holocaust as well as six million Jews. Unlike the Jews there is no Israel for them to go to.
It shows the vision of Prime minister Simeon Saxe-Coburg Gotha of Bulgaria that he should have decided to host the conference, and also that he is a compassionate man, as befits a former monarch, for whom the principle of noblesse oblige is paramount. Prime ministers Ferenc Gyurcsany of Hungary, Ivo Sanander of Croatia, Vlado Buckovski of Macedonia and Vojslav Kostunica of Serbia and deputy prime ministers Pavel Nemec of the Czech Republic, Marco Bela of Romania and Pal Czaky of Slovakia signed a joint declaration stating their commitment to improve the living standards and the social position of Roma. "We solemnly declare that our governments will work for ending discrimination and bridging the unacceptable gap between Roma and the other parts of society," the document said. Participants in the meeting included also World Bank President James Wolfensohn and Open Society Institute (OSI) Chairman, Hungarian-born U.S. financier George Soros. OSI and the World Bank are the two principal sponsoring organizations of the initiative. 
The Decade of Roma Inclusion represents the first cooperative international effort to change the lives of Roma, many of whom live in dire poverty in the heart of Europe. Bulgaria, Croatia, the Czech Republic, Hungary, Macedonia, Romania, Serbia and Montenegro, and Slovakia are the founding countries of the Decade, which will span 2005-2015. 
"It is one of the great moral issues facing Europe today," said World Bank President James D. Wolfensohn. "If we do nothing, we will see continued disaffection and suffering. If we succeed, the Decade offers an opportunity to turn the tide of history and harness the political will to include the Roma as full citizens in European societies," he added.
To accelerate social inclusion and improve the economic status of Roma, each country will set goals for improvements in four identified priority areas-education, employment, health, and housing. The Decade will also provide a follow-up framework to monitor progress in ending discrimination and poverty faced by Roma communities in the region. 
"The basic principles of humanism and democracy are violated when large groups are lagging behind in their social integration," Saxe-Coburg said. "Every citizen must have a chance for better life regardless of his or her religious or ethnic group. National minorities are the riches of our country and we struggle to reaffirm their status in accord with the international standards," Sanander said. 
"The communist regime didn't recognize differences and ghettoes it established are at the core of Roma's problems of today," Nemec said. 
"The Decade signals a sea change in Roma policy," said Soros. "But it is just the beginning. Problems will not be solved overnight and we must be prepared to fight social exclusion and discrimination over the course of the Decade." 
The Decade planning is guided by an International Steering Committee, made up of representatives of governments, Roma from each country, and international organizations. It is owned by the governments that signed on to it. Funding of the Decade action plans involves the reallocation of existing resources in national budgets and aligning these plans with funding instruments of multinational, international, and bilateral donors.
In addition to the governments of the participating countries, the World Bank, and the Open Society Institute, the Decade of Roma Inclusion is supported by the European Commission, the United Nations Development Program, the Organization for Security and Cooperation in Europe, the Council of Europe, the Council of Europe Development Bank, and most importantly, Romani leadership. 

Looming elections
Bulgaria is facing parliamentary elections in the summer of 2005, the expiry of the term of office of the current government. With several months still to go, the Bulgarian Socialist Party (BSP), the successor to the communists, continues to hold the lead in the public opinion polls, in spite of rather tumultuous events in 2004.
According to a poll in December 2004 by the MBMD polling agency, had the elections been held in the beginning of that month, the BSP would have got 23% of the votes.
For all Premier Simeon's sterling qualities, he has not been able to deliver on his promise four years ago to double living standards. It was a rash promise to make. He is almost certain to lose. 
But history is likely to be kinder to him than his own people if his initiative on the Roma leads to their living standards being decidedly improved over the coming years as a result.

New Year bombshell
The former communists, nevertheless, face a problem or two. Major controversy erupted around the BSP in January 2004, after a report in the Iraqi daily Al-Mada, according to which the BSP had in 1998 received 12 million barrels of petrol as a "gift" from the regime of Saddam Hussein. 
According to the report, about 200 individuals, companies, political organisations and religious organisations in 50 countries that year received from Hussein various quantities of petrol as a gift under the UN food-for-oil programme.
Opposite the name of Bulgaria appeared the BSP and a Bulgarian-Iraqi company, IraqBul, which allegedly received two million barrels of petrol.

Purvanov in repudiation
President Purvanov, who was BSP leader at the time when this allegedly happened, described the Al-Mada report as "ill-advised black humour", ordered the National Security Service (NSS) and the National Intelligence Service (NIS) to hold an inquiry, and rejected all allegations. 
Current BSP leader Sergei Stanishev also rejected the allegations. Several days after the first report, it turned out that businessmen close to the BSP had indeed dealt with Iraqi petrol under the UN oil-for-food programme.
In an interview with the bTV national channel, Zahari Zahariev, a member of the BSP Supreme Council (SC), admitted that he was an intermediary in a deal under the UN oil-for-food programme between Iraq and a Bulgarian company, Machinoexport, controlled by Dimitar Mandjukov, widely seen as close to the BSP.
Mandjukov is the publisher of the party newspaper, Duma. He is also a weapons dealer, owns the BBT cable television channel, has interests in the telecommunications sector and has been awarded by President Purvanov the Stara Planina order for his contributions to journalism in Bulgaria.
But Mandjukov said that he had made only a little profit from the sale of the one million barrels of petrol and had not used it to sponsor the BSP. Mandjukov said he would sue anyone who tried to say anything negative about his companies. It remains to be seen if such threats will deflect enquiries into his affairs.
Both Mandjukov and Zahariev denied having involved the name of the BSP in the deal or having negotiated with Iraq outside the UN programme.
The controversy led to the setting up of a parliamentary committee in February, which started its own inquiry into the Al-Mada allegations. On several occasions the committee, whose original two-month term has been extended on more than one occasion and it is still in existence, has tried to summon Purvanov. So far it has not succeeded. It may be assumed that it will emerge who were the beneficiaries of Saddam Hussein's largesse.
In the heat of the Iraqi oil controversy, the BSP tried to shift negative public attention from itself by pushing for early elections and solemn vows to rid itself of members "who stick their fingers in the honey" but at the same time, party leader Stanishev refused to dismiss SC member Zahariev from his duties. 
In the beginning of March, 2004 the BSP tabled in Parliament a vote of no confidence on the basis of the Government's "social irresponsibility". Deputy leader Rumen Ovcharov identified as evidence of the 'irresponsibility" of the Government its income policies, problems within the education system and with health care, the sale of the Bulgarian Telecommunications 

Bulgarian Opposition Removes Parliament Speaker
The left-wing and right-wing opposition parties on February 4th succeeded in removing Ognyan Gerdzhikov as parliament speaker, because he refused to schedule a debate on a failed privatisation deal earlier in the week. In all, 119 deputies voted to remove him, while 114 supported him. There was one abstention. 
The wrangling began when British American Tobacco pulled out of a deal to buy three cigarette factories from the government. Gerdzhikov refused to summon the assembly to an extraordinary session requested by opposition lawmakers. Following his ousting as speaker, the law professor said he would resign from parliament completely. Fallout from the failed privatisation bid continues.

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AVIATION

Sofia airport to secure new runaway by October 31st


The deadline for the construction of a new runway system at Sofia airport has been extended by seven months until October 31st 2005, the airport's Executive Director, Stoil Pashkunov, said, Bulgarian News Agency reported.
Construction has been delayed partly due to a large dumping site which the project contractor did not know was in the area of the future runways. It took a month to dig out the waste and fill the pit with dirt, Pashkounov said.
No subsidy was needed to cover the additional expenses, which amounted to US$500,000. The project was initially scheduled to be completed by April 2nd this year. The tender for the construction of a new passenger terminal at Sofia airport remains unchanged, by end-August 2005. Construction work proceeds well, Pashkounov said.
The foundations have been laid for a bridge over the Iskur River, which will be part of the adjoining infrastructure.
Some two million levs has been allocated for landscaping work, which will be carried out by 2006. A total of 92 hectares of land, owned by 400 persons, has been earmarked for the purposes of the project. The process has involved 120 lawsuits. Three houses remain in the area, and alienation negotiations are still under way for one of them. The new airport is expected to handle two million passengers annually.
Sofia airport's before-tax profit in 2004 is estimated at 15m levs (10.5m Euro), up from 13.6m levs in 2003, the executive director said. Last year the airport handled 28,700 airplanes (compared with 25,800 in 2003), 1,615,000 passengers (300,000 more than in 2003) and 14,400 tonnes of cargo (compared with 13,700 tonnes in 2003).
The airport's main runway was upgraded to a higher class on January 17th, which means it will handle aircraft in lower visibility conditions.

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BANKING

DZI interested in Macedonian acquisitions

Bulgarian financial group DZI is reportedly holding talks for acquiring 3 Macedonian banks and the largest Macedonian insurer QBE, New Europe reported recently. 
The reports indicate that talks were held with Macedonia's 5th largest bank Ohridska Banka as well as with the lenders Rado Banka and Makedonska Banka. The Bulgarian group also held initial consultations with QBE, which was privatised in 1998 and presently holds more than 50% of the car and general insurance markets in Macedonia. In Bulgaria the financial group DZI is comprised of a commercial bank (the country's 10th largest), a general insurance company, a life insurance company (both insurers rank second in their segments) and a pension fund. The interest of DZI in acquisitions in Macedonia was confirmed by the CEO of DZI Bank who said that the aim of the financial groups is to acquire majority stakes.

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ENERGY

Austrian EVN buys power firms

Austrian power giant EVN AG completed the acquisition of a 67% stake in the southeast network of Bulgarian power distribution companies, the state sale body announced recently, Sofia News Agency reported.
The Austrian company also declared an interest in the sale of three thermal power plants of Bulgaria: Bobov Dol, Varna and Russe heating utility companies. EVN AG won the public tender on July 15th with a bid of 271.7m Euro for the acquisition of the two power utilities in the south-southeast cities of Stara Zagora and Plovdiv. It outbid Czech electricity utility CEZ AS (BAACEZ.PR), Germany's E.ON Energie AG, Greece's Public Power Corporation SA (PPC.AT) and Italys SpA.

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SHIPPING

Bulgaria to build merchant vessels for Chile

At a recent business meeting in Santiago, Bulgarian Deputy prime Minister and Minister of Economy, Lydia Shuleva, stated that Chile has expressed interest in constructing merchant vessels in Bulgaria, Standart reported.
Currently, Chile needs to boost the strength of their merchant fleet due to rising commodity turnover with China. The vessels are supposed to be commissioned to the Varna-based shipyard. Chilean entrepreneurs are also interested in the privatisation of Navigation Maritime Bulgare, which is a state-owned Bulgarian shipping company and the national flag-carrier Bulgaria air, as well as in businesses of the military-industrial complex. Businessmen from Sao Paolo also informed themselves about the terms to bid for the Navigation Maritime Bulgare.
On January 14th, Shuleva met with Federation of Industries of the State Sao Paolo (FIESP). Its members asked if Bulgaria would reduce the tax rates in the wake of its accession to the European Union. Bulgaria's Prime Minister, Simeon Saxe-Coburg Gotha, said the cabinet was to introduce flat taxes after Bulgaria becomes a fully-fledged member of the 25-member bloc, expected in 2007.
Brazil also showed an interest in joint projects with Bulgaria in the field of energy. News of this surfaced after Shuleva held talks with Brazilian Energy and Mining Minister, Vilma Rouseff, who is of Bulgarian descent. The host expected Bulgarian offers for production of rails as Brazil is replacing its obsolete railways.
Shuleva supports a Brazil-based company for the import of 50 tonnes of Bulgaria-made ammonium nitrate. The deal is expected to be finalised in May. Unofficially, the Bulgarian deputy prime minister said the Bulgarian company in question was Neochim.

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TELECOMMUNICATIONS

BTC to shrink mobile charges by 20%

Bulgarian Telecommunications Company (BTC), which holds the country's third GSM operator licence, will announce its mobile services price list just before its launch, Sofia News Agency reported.
The company has promised to reduce mobile phone charges by at least 20%, giving its clients high quality services and increasing the network capacity. The construction of the network is underway and the new owners of previously state-owned BTC, Viva Ventures, plan to step into the Bulgarian market in April.
Last June Bulgaria sold a 65% stake in BTC to Vienna-registered Viva Ventures GmbH for 280m Euro. The state competition watchdog recently approved the third GSM licence awarded to the BTC on June 7th.
BTC was given the licensing document several days later after it remitted the negotiated fee, amounting to 54.2m levs. The case of issuing a third GSM licence had been faltering for half a year after rival operators in Bulgaria objected the non-tendered sale of the licence, which had been negotiated by the government as part of the BTC privatisation deal.
BTC was also be listed at the Sofia Stock Exchange on February 1st. The initial price of BTC shares to be traded on the bourse was to be announced no later than three days prior to the equity listing, Atanas Bangachev, CEO of the sale body announced in December. Bulgaria will put up for sale a 35% state-owned stake in the national telecom BTC in exchange of compensatory bills.

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TOURISM

Public and private sectors can drive Bulgaria's tourism

Bulgaria's tourism industry can only flourish through a joint effort of the public and private sectors, according to Bob Miller, Bulgaria's honorary consul for Nevada and former governor of the state.
Miller and Maxim Behar, CEO of leading Bulgarian public relations company M3 Communications Group, Inc were organisers of the major tourism forum "Bulgaria - Dream Area," which closed on January 7th.
Miller praised the performance of the government in enhancing the tourism sector during his meeting with the head of the budget committee, Nina Radeva, who was elected MP on the ticket of the ruling Simeon II National Movement in the second-biggest town of Plovdiv, Sofia News Agency reported.
Bulgaria has a wealth of cultural tourism assets to be viewed and Plovdiv is a rich area, the governor said.
The main advantage of Plovdiv is its potential to offer a complex tourism product, said Radeva, who failed in running for Plovdiv's mayor in 2003 elections.
The Bulgarian state has to put a framework around education and training in the field of tourism, the president of tourism and culture commission, Euro-Adriatic region, said at the forum on January 6th. Alain Deriaz took part in the Bulgaria Dream Area forum, which is focused this year on human resources in the tourism business.
Deriaz also delivered a special message from the president of the Congress of Local and Regional Authorities of the Council of Europe, Giovanni di Stasi, who wished great success to the forum. Deriaz also invited participants in Bulgaria Dream Area to a special tourism conference in Switzerland in the end of January.
Bulgarian representatives would get a chance to contact potential investors, according to Deriaz. Bulgaria recorded last year a record-high of €1,601bn of revenues from international tourism.
A total of 4m Euro is allocated to the economy ministry for promoting Bulgaria's tourism in 2005, up by 2.5m levs from the initially planned amount.

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TRANSPORT

Siemens to renew railways

Bulgaria's transport minister and representatives of Siemens inked on January 7th a 67m Euro contract for the German company to provide 25 diesel trains for Bulgaria, Sofia News Agency reported. 
Bulgarian Deputy Prime Minister and Transport and Communications Minister Nikolay Vassilev and Deputy Transport and Communications Minister Anelia Kroushkova attended the ceremony. This major deal marked the beginning of a railway renewal process in the country, which would result in better services for the Bulgarian people, Vassilev said after signing the document. Vassilev said a major of trains operating in Bulgaria were made in 1979, 1982 and 1986. Last December Siemens won a competitive procedure for the diesel railcars. The first two railcars are expected to arrive soon, and there are due between the middle and end of 2005. The new rolling stock is expected to recoup itself within 10 years, economising on diesel fuel alone. They will run along sections of Bulgaria's railway network that are not yet electrified and where no alternative means of transport are available. The maximum speed of the railcars would be 120km per hour. Officials disclosed that the Bulgarian side had managed to arrange a 10% discount from the originally offered price. Siemens also arranged a loan by KFW and Nordbank to cover most of the sum. Bulgaria became the 12th client purchasing the Desiro trains, according to Friedrich Smazwil, vice president of the Transportation Systems Group of Siemens.

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