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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: 101 - (27/09/05)

Bulgaria is enhancing its international profile by the month. The current coalition government was formed in August, after the socialist party, led by Sergey Stanishev, unseated the centrists, led by former Prime Minister Simeon Saxe-Coburg.

The wisdom of Solomon; NATO Shortlists Three Military Bases in Bulgaria
The USA and NATO have been eyeing Bulgarian military bases for troop deployment possibilities. As an expected outer door of the EU, should it become a member of the Union in 2007, and an effective Alliance member, Bulgaria has been seen as a strategic partner in the western policy to the Near and Far East, and Russia.
Negotiations are under way between NATO and Bulgaria about Novo Selo, the airport at Bezmer and the Burgas port, Bulgaria's former first diplomat Solomon Passy has announced. While on a visit to Black Sea's Burgas, Passy, who is now head of the parliamentary foreign police committee, said some two to three thousand US military are expected to be deployed in these three locations. 
A NATO military delegation was due to arrive in Bulgaria on October 1st, Solomon Passy added, to further talks on the military deployment with the new government of the Balkan country. 
Solomon Passy specified that the military port of Burgas is not at the moment on the list of negotiated locations, but he stressed that "Bulgaria should be ready to respond with provision of bases and facilities to any possible need of the EU or NATO."

Sofia, Washington discuss Bulgarian withdrawal from Iraq 
Bulgaria's new Prime Minister, Stanishev, has said the country will withdraw its troops from Iraq by the end of the year, stepping back from the socialists' vow to pull out the soldiers sooner. As elsewhere in Europe the left are now highly disillusioned with the war for obvious reasons. Several Bulgarian soldiers have lost their lives.
The change of government has confirmed that Bulgaria is to withdraw its troops from Iraq. Bulgarian and American officials have discussed Sofia's decision to withdraw its troops in Iraq, the country's Foreign Ministry announced. Bulgarian and US experts have discussed Bulgaria's future role in the democracy establishing process in Iraq. 
Representatives of the Bulgaria's Foreign Ministry, the Defence Ministry and the General Staff of the Bulgarian Army have discussed the situation with military experts from the US State Department, the Pentagon and the US Embassy in Sofia. Bulgaria's parliament, which has the final say over Bulgarian troop deployments, approved in May a government plan to withdraw the country's 450 troops in Iraq by the end of the year.

Bulgaria's PM seeks institutional coordination
Prime Minister Stanishev of course has domestic matters as his top priority. The first few months in office can set the tone for a whole administration. He arranged a meeting to discuss the coordination between the executive power and the Parliament at his headquarters on September 20th. 
The meeting gathered the left-wing ministers and their deputies, district council leaders, the chairmen of the parliamentary commission in an attempt to optimise the performance of the new government.
Stanishev urged the ministers to announce the priorities for each ministry so that the governmental programme could be prepared by the end of October. The PM also recommended that they keep their work as transparent as possible and to follow the national interests rather than their own.
Bulgaria should start preparations for utilizing EU funds available after accession before its entry pinned for 2007, an expert warned.
The use of consultants is highly recommended because of the huge amount of knowledge required in the process, John Ayerst, former adviser to the Finance Ministry on the issues of pre-accession, said at a public debate on regional development in the second-biggest town of Plovdiv. He gave an example from the United Kingdom, where funds utilization in the underdeveloped regions of Southwest and Northeast parts of the country was as low as 10% within a year for lack of proper consultancy work.
The drawing up of strategies and plans for development at the local, district and regional level, requires a normative base and institutional structure. Coordination and planning, partnership with NGOs, business ethics and entrepreneurial culture were on the agenda of the debate, organized by the Delegation of the European Commission to Bulgaria. "European initiatives for improving the business climate for SMEs and agriculture producers" included three panels of debates on the draft plan for the development of the Central Southern region, local and foreign sources of funding for business infrastructure, for improving the competitiveness of agriculture and of organic farming. 
John Ayerst assessed Bulgaria's progress highly in the development of small and medium-sized enterprises (SMEs), citing the support they get from the central government, chambers of commerce and business organizations. Calling SMEs work "embedded" in Bulgaria's future, he warned that the business climate should provide more incentives for investors to meet Europe's standards for competitiveness and facilitate entry on the internal market. 
"The ability to develop natural comparative advantages to encourage entrepreneurs includes strong business environment, strong business ethics and reduced corruption," Ayerst said. He praised the activities of the Bulgarian Business Leaders Forum (BBLF), one of the most influential communities in the country, in the field. Among the priorities in industrial policy he singled out encouraging entrepreneurship, better business climate and access to tools for funding and consultancy. 
Dorotea Duncheva, chief inspector at the "Strategic Planning for Regional Policy" directorate with the Regional Development Ministry, criticized municipalities and districts for failing to prepare their plans for development. 
Meglena Rusenova, deputy governor of the district of Plovdiv, thanked the Delegation of the European Commission to Bulgaria, for its efforts to disseminate information about Bulgaria's future in the European Union.

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AVIATION

Direct flight to link Sofia, Manchester


National air carrier Bulgaria Air is launching a new route from the country's capital Sofia to Manchester, UK. This first flight is scheduled to take place from October 2, Sofia news agency reported recently. 
According to the winter flight schedule, the Sofia-Manchester-Sofia flights will be performed on Thursday and Sundays. Bulgaria Air performs flights from the capital Sofia to more than 20 cities in Europe and the Middle East. Regular direct lines connect the sea airport of Varna with London, Vienna, Amsterdam, Berlin and Frankfurt.

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CREDIT RATINGS

Fitch upgrades Bulgaria's to BBB from BBB- 

International rating agency Fitch has upgraded Bulgaria's long-term foreign currency rating to BBB from BBB minus and local currency rating to BBB+ from BBB. The country ceiling is also upgraded to BBB from BBB-. The short-term rating is affirmed at F3. Following the upgrade, the outlook is now stable, the finance ministry said in a press release, New Europe reported.
"Bulgaria's sovereign credit fundamentals are underpinned by sound fiscal policy and falling government debt, large foreign direct investment inflows, as well as rapid and sustainable growth. They are also supported by the good prospects for economic policy continuity with the government that has emerged from the June elections," said Nick Eisinger, Fitch analyst for Bulgaria, said. In a statement the agency pointed out that the three parties that form the new coalition government share common views on the need to maintain a prudent fiscal policy, to uphold the structures demanded by the currency board arrangement and to finalise the reforms needed to secure Bulgaria's accession to the European Union, according to Fitch. Fitch expects this to occur in January 2007, despite some outstanding judicial reforms and a more fluid situation within the EU itself, although the chances of a one-year deal to EU entry have increased. The agency expects a second consecutive year of fiscal surplus (over 1 per cent of GDP).
The fiscal reserve account has allowed the government to repay all outstanding brady debt, which should underpin a reduction in general government debt to around 30 percent of GDP by end of the year from 39 per cent of GDP in 2004, Fitch said. The current account deficit remains a weak spot of an otherwise strong macroeconomic backdrop, and highlights the need to bolster domestic savings and cool down the economy. However, much of the widening is driven by investment, and foreign direct investment coverage of the external shortfall is one of the highest of all countries in the BBB rating range, Fitch said. 
ENERGY

N-Plant revenues larger than planned

In the first 6 months of the year, the revenues of the Kozloduy nuclear power plant exceeded the target amount by 45,140,000 levs as the amount of electricity generated and sold by the plant was larger than planned, Sofia news agency reported recently.
On August 10th, the plant also reported successful implementation of the final phase of a programme to upgrade its Units 5 and 6, as well as a programme for repairs. The scheduled annual maintenance and refuelling of Unit 5 are nearing completion. Over the first half of the year, the company invested over 53m levs of its own funds in the implementation of its investment programme.

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EU MEMBERSHIP

Stanishev: EU membership is key objective for Bulgaria 

The Bulgarian government and the World Bank agree that European Union membership is the overriding objective for the country, Prime Minister, Sergei Stanishev, said on August 26th after a meeting with World Bank (WB) country chief for Bulgaria, Anand Seth, Sofia News Agency reported. 
This was Stanishev's first meeting with Seth after he took office as prime minister on August 16th. During the meeting, Seth said Bulgaria needs to preserve its economic stability, complete its EU membership preparations, boost consumer income, promote economic competitiveness and attract more external investment. 
With the World Bank's three-year programme in Bulgaria having ended in July, the prospects for cooperation were discussed during Seth's visit. Stanishev said that relations between Bulgaria and the World Bank were at a crossroads. He added that strategic cooperation with the World Bank is possible in long-term programmes and projects that should be well coordinated.
"We know that Bulgaria has achieved much in its economic development in recent years, but some problems will take a joint effort to overcome," he said, citing the example of low income level, which is lower than that of the EU and even of the new EU members.
Stanishev stressed that the Bulgarian economy still lagged behind in competitiveness, citing the large trade deficit and the current account deficit, which has been growing steadily in the last seven years. Meetings with World Bank working teams were scheduled for September and early October, at which the main projects and parameters of the future cooperation between the World Bank and Bulgaria were to be agreed, Stanishev said. Seth also said Bulgaria still does not rank among the top 50 countries in economic productivity and the World Bank would like to see it happen. 

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TELECOMMUNICATIONS

BTC unveils name for 3rd mobile operator 

The Bulgarian Telecommunications Company (BTC) plans to launch its mobile operator by Christmas under the name Vivatel, the company announced recently after a country wide survey, Sofia News Agency reported. 
"The launch of Vivatel will bring real competition on the Bulgarian market of mobile communications," after years of market domination by just two companies, said Denis Wallach, BTC's chief executive officer.
Currently, two companies offer GSM services in Bulgaria - Mobiltel, which was recently acquired by Telecom Austria, and Greek-owned Globul. According to Wallach, the new operator would offer "much lower GSM rates" than these of Mobiltel and Globul, and media reports said Vivatel prices would be up to 20 per cent lower. He added that the Bulgarian public will witness an ever greater market activity synchronised with the pace set by BTC and BTC Mobile. The network's operator, BTC Mobile, has polled employees of the national dealer network and has received a positive reaction to the choice of brand name. BTC Mobile chose two advertising agencies through a competition to service the third mobile operator, the BTC press centre said.
Leo Burnett Sofia will carry out the media campaign involving the drafting of a creative concept for television, radio, external advertising and internet. The Kres agency will be in charge of the non-media advertising that will organise and hold events, promotions and games.
Last year the government sold the majority 65 per cent stake in BTC - the country's largest fixed-line telecom to Viva Ventures Holding GmbH, a Vienna-based unit of US equity fund Advent International. At the same time, the company was awarded a GSM operator licence. In January, the minority package was sold off at the Sofia stock exchange to a number of smaller investors. 
According to official statistics, Bulgaria's telecommunications market last year reached a volume of 2.5 billion levs (1.3 billion Euro). In 2004 the market grew 13 per cent, with the wireless services up by 25 percent, the state telecom regulator said. Plans were to launch the third mobile network this April, but a delay was imposed because of auctions for UMTS licences and BTC Mobile negotiations with MobilTel.

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TOURISM

Tourist arrivals up 7% in January-July

According to preliminary data released by the Bulgarian Tourism Ministry, tourist arrivals rose 7% in January-July to over 2.7m, Sofia news agency reported recently. Tourism revenues from international tourism gained 10% year-on-year to stand at 706m levs, up 9.2% in comparison with the same period last year. The data indicated the amount of cash spent by the average foreign holiday-maker increased insignificantly from last year. This year's top growth markets for the Bulgarian tourist industry were Russia (+13%), Romania (+18%) and Turkey (+42%). The ministry also said that over 2.7m foreign tourists spent their summer holiday in Bulgaria by the end of the July.
The released figures came amid fears that over-construction and poor infrastructure would harm the tourism industry this year. Nearly 100% of the bed capacity in Bulgaria's major sea resorts has been booked, according to a report of the culture and tourism ministry. It indicated that European Union members account for more than half of the 2.7m foreign holiday-makers who visited Bulgaria by the end of July. The number of the British tourists is marking an increase by 42% in comparison with the same period last year, those from Spain - 38%.
The tourists from Scandinavian countries have gone up by 30%. The same upward trend is visible in the number of tourists from the newly acceded EU member states - Poland (16%), the Czech Republic (12.5%).

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TRANSPORT

Trakiya Highway deal on the right track 

Bulgarian Regional Development Minister, Assen Gagauzov, announced that the deal for the concession of Trakiya Highway was due to be officially unveiled, Sofia News Agency reported. 
The key southern road-belt was granted on a 35-year concession to a Bulgarian-Portuguese consortium. According to Gagauzov, the ISPA funds could finance the highway reconstruction once the country enters the European Union in 2007, but this would delay the finalisation date until 2011. The joint venture comprised of two Bulgarian state-owned companies, Highways AD and Technoexportstroy, and the Portuguese firms MSF, Lena, and Sacyr Vallehermoso's Portuguese unit Somague, signed a government contract last March to restructure and complete the construction of Bulgaria's second largest cross-country highway. Gagauzov stated that the supreme administrative court fixed October 11 as the date to hear the case of Trakiya concession deal.

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