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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: 097 - (26/05/05)

Elections to parliament
The Bulgarians face parliamentary elections on June 25th. Prime Minister Simeon Saxe-Coburg's National Movement, which rules with a minority Turkish party, is on only 13.9% in the polls, whereas the main opposition, the socialist BSP, is on 27.3%.
Simeon, the former king of the country, made the mistake of promising to double living standards in 800 days when elected in 2001. He failed of course, a predictable outcome in a transition economy.
Not that the economy has been doing badly in the aggregate. GDP growth has been consistently in the 4% range over the last four years, as indeed it was beforehand when the BSP was in power. Car sales have been booming and recorded a remarkable jump of 48% in the first three months of the year, exactly the sort of miracle Simeon promised. 
But other areas of consumer demand are not rising at such a breakneck speed. It is very hard to win a second term in a country which is still after all very poor by European standards.

The EU beckons
The Bulgarians are pinning their hopes on imminent entry into the European Union (EU). A decisive event took place on April 25th when Bulgaria and Romania were accepted as candidates to join the EU. The target date for entry is January 2000, but it could be delayed for either of them if they do not comply with the full panoply of l'acquisition communitaire, the set of house-rules of the community. 
Bulgarians impatiently eye a large electronic clock in central Sofia, which is counting down the time remaining until Bulgaria joins the European Union, a goal the country set itself immediately after the fall of communism. The clock now stands at around 600 days. Three out of every four Bulgarians expect a better life in the club of the rich - higher salaries and pensions and better job opportunities in other EU member states.
Simeon may not have delivered in his 800 days; but the EU will in 600. This is all of course rather primitive thinking. 

EU funds to the rescue
Nevertheless, a huge influx of funds from the EU lies ahead. "We see a promised land on the horizon," Foreign minister, Solomon Passi said, eyeing the more than 44bn Euro (US$56.5bn) earmarked by Brussels for his country and neighbouring Romania.
With it, following the expansion in 2007, Bulgaria will receive the largest financial injection in relation to the GDP of any new member. Local politicians from all parties regularly refer to EU billions.
And Bulgaria, one of the poorest prospective members, needs the cash badly, to at least catch up with the development of the 10 new EU states that joined in May last year.
Despite 5.6% growth in 2004, the average monthly pay in the public sector hovers around 160 Euro, while in industry, half of the workforce survives on less than 70 Euro.
Conditions in the welfare and health system partly resemble those in third World countries. Another problem is the impoverished, crime-prone Roma minority, with its 90% unemployment rate soaring about the 13% national average.
Up to 17% of ethnic Turks, who are the other large minority in Bulgaria, are illiterate, according to their own politicians. But it is the sluggish reform of the judicial system that could delay Bulgaria's EU entry by a year. The accession treaty, signed on April 25th, contains the delay clause in case Sofia fails to meet EU standards.
The standards include courts sufficiently effective to combat organised crime and deeply rooted corruption. As it is on the crossroads between Europe and Asia, Bulgaria is also a destination of money counterfeiters, drug smugglers and traffickers of women. It is a place where the dubious newly rich ostentatiously show their power.
Foreign investors demand better legal security. They have so far poured eight billion Euros into Bulgaria, which they describe as an attractive destination for capital because of its qualified and cheap labour.
Particularly interesting for investors is the entire infrastructure, the construction industry and tourism on the Black Sea or mountains in the south.
At the moment, it is impossible to estimate how much of the local industry will be able to compete with the pressure of competition from other EU states.
The food industry is among those expected to be hit hard along with others facing costly changes in order to meet EU regulations.
With Bulgaria's accession the EU will stretch its south-eastern border to touch its controversial membership candidate Turkey. It will expand its territory by 110,000 kilometres square and population by 7.7m. Bulgaria will also contribute the first Cyrillic alphabet to the Union, its nuclear power plant in Kozloduy and plenty of enthusiasm.

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EU ENTRY

Romania and Bulgaria get EU entry go-ahead

The European Parliament recently voted overwhelmingly in favour of European Union membership for Romania and Bulgaria on January 1st, 2007 but warned both countries to step up reform efforts to meet the deadline, New Europe reported. 
The EU Parliament voted for the two countries' accession despite last minute calls by the assembly's Green group for a postponement of the ballot.
A total of 522 deputies voted in favour of Bulgaria's EU entry, with 70 against and 69 abstentions. Those voting in favour of Romanian accession numbered 497, with 93 against and 71 abstentions.
European Commission enlargement chief Olli Rehn welcomed the parliamentary green light, saying the accession treaty for both countries signed on April 25th provided sufficient safeguard clauses to ensure that Romania and Bulgaria met EU membership standards. "We must have a fair game. While the jury is still out, it is now time to give the benefit of the doubt to the two countries," said Rehn.
"Bulgaria and Romania must use the remaining time until the planned day of accession to finalise their preparations," he said adding that the Commission would keep a close watch on developments in both countries.
Martin Schulz, leader of the Parliament's powerful Socialist Group, underlined that the EU assembly would be fully involved in monitoring progress in the 2 countries. "Many things remain to be done and the governments of both countries will have to make strong and convincing efforts," said Socialist group Vice President, Jan Marinus Wiersma.
"Parliament will monitor the process very closely and will make full use of its rights," he underlined.
The comments made clear that although EU governments have set a January 1st, 2007 date for Romania and Bulgaria's membership of the union, accession could be delayed by one year if they fail to make key reforms, such as curbing corruption and reorganising farming. In a debate preceding the vote, there was special concern that Romania - a country of 23m people - was still lagging behind.
Green group leader, Daniel Cohn-Bendit told the Parliament he was concerned about the state of press freedom and governance in the country. He said his group wanted to delay the vote. 
But those in favour of Romania's membership warned that postponing the vote would sent a "dangerous" political signal to the country.

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FOREIGN ECONOMIC COOPERATION

Bulgarian, Turkish presidents discuss EU bids, economic cooperation

Turkish President, Ahmet Necdet Sezer, recently congratulated Bulgarian President, Georgi Purvanov, and the Bulgarian people on the signature of their country's EU Accession Treaty. "This is a historic step which, I believe, will create an even closer bond between our countries as they have a common goal," Sezer said, emerging from a meeting with Purvanov in Ankara, BTA web site reported.
Bulgaria is pleased with the decision of the European institutions to start membership negotiations with Turkey, Purvanov said. The European Council has set 3rd October 2005 as the date for starting EU accession negotiations with Turkey.
Purvanov said Bulgaria will assist Turkey in the process of negotiations not only by its support but also with concrete expert aid in spheres in which Turkey may decide it needs support, like agriculture, for instance. He expressed his conviction that Turkey's negotiations with the EU will be intensive and correspond to the wishes of the Turkish people.
"Bulgaria and Turkey are not just good neighbours, we are also friends and solid and reliable allies," Purvanov said. He noted that his meetings with Sezer are part of an overall political dialogue which is more active than ever before in the history of bilateral relations. "These meetings create a new climate of confidence and a favourable foundation for contacts between our countries' business communities and citizens," he added.
According to Sezer, there are no political problems between Bulgaria and Turkey, the two nations share common values and are building a sound foundation to expand their cooperation in trade and economy.
During the talks, which Purvanov and Sezer described as fruitful, they made a comprehensive review of the current agenda of bilateral relations. One of the topics they discussed was economic exchange. Annual two-way trade is expected to increase to US$2bn in 2005 from US$1.8bn in 2004. Bulgaria is Turkey's second most important trading partner in the Balkans, and Turkey tops the table of countries with the largest number of companies investing in the Bulgarian economy.
Sofia and Ankara should work to relax business licensing regulations on a reciprocal basis, ease the terms of transit, and improve their infrastructure, Purvanov said. He hailed the forthcoming inauguration of a new crossing on the common border, between Lesovo and Hamzabeyli.
Purvanov's initiative to change the format of meetings between Bulgaria, Romania, Turkey and Greece was met with understanding. He proposed that bilateral meetings be superseded by quadrilateral ones and focus on topics of interest for all four countries, such as energy and infrastructure.

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TELECOMMUNICATIONS

MobilTel wins UMTS licence with 78m lev bid

Leading Bulgarian wireless operator MobilTel won a tender for a UMTS Class A licence after submitting a bid worth 78m levs, New Europe reported.
Bulgarian Telecommunications Company (BTC) and MobilTel were the sole bidders for the tender. The tender for Class A licence took place at Hall 6 of the National Palace of Culture in Sofia on March 30th. The starting bid price was 70m levs with an increment of two million levs. As the price stood at 78m levs it became obvious that MobilTel would win the bid. Eligible bidders were required to provide evidence of at least 500,000 subscribers to their telecommunication services and a turnover of 50m Euro in 2003. By the end of 2006, the UMTS will cover Sofia, Varna, Plovdiv, Burgas and Ruse, CEO Nikolay Nikolov, told Standart. He added that over the next year and a half, 100m Euro would be invested to build a entirely new network for the UMTS.

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