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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: 102 - (27/10/05)

The Turkish question
The idea of Turkish accession to the EU is very important for the Bulgarians. They share a frontier! Turkey is now a candidate country for EU entry, which started talks with Brussels to that end on October 3rd. 
Cooperation with Bulgaria is likely to be in its favour. The Bulgarians were ruled by the Turks for centuries and have a large minority of Turks in their population -nearly 10%, or 800,000 out of a total population of 8.4 million.
They may not amount to so many; but they count at election time all right. One in ten can hold the balance. The Movement for Rights and Freedoms, their party, held the balance in the previous parliament and supported the National Movement of Simeon 11.

Turks against communism
At this historic moment it is worth recapitulating the role of the Turkish minority in Bulgaria's history, which has been immense, including in the overthrow of communism no less.
The Ottomans occupied Bulgaria in 1396 and were not evicted until 1878, when fellow Orthodox Tsarist Russia came to its rescue after a series of appalling massacres of Bulgarian Christians from 1876 onwards, that aroused William Gladstone in Britain to some of his highest flights of oratory in condemnation. But it was his arch-rival Disraeli, who was in power at the time who joined forces with Bismarck at the Congress of Berlin in1878 to give international recognition to Bulgarian independence.
Bulgaria sided with the Central Powers in the First World War; and then under Tsar Boris III sided with Hitler from 1941. He died in 1943, being succeeded by the infant Simeon II of recent fame as premier. The communists took over in the wake of yet another Russian 'liberation.' Communism and Islam have always been ill bed-fellows. The only instance of an Islamic country going communist is Albania, which is 70% Moslem, and that happened in most peculiar circumstances.
The clash between the Bulgarian Communist Party(BCP) and the Turks came to a head in 1984 when it began a most ill-advised policy of 'regeneration' of them by 'forced bulgarisation.' They were obliged to change their names to Bulgar or Slav ones, while their religious and other practices were increasingly harassed.
This could not have come at a worse time. Gorbachev came to power in Moscow, the ultimate guarantor of the regime in Sofia. He was determined to see changes in the Warsaw Pact zone, a new Prague Spring so he thought (he had been an ardent supporter of it in 1968, totally opposed to its suppression). He was now in favour of liberalization and a renunciation of the use of force by Moscow in its imperial reach. The Turks were emboldened to fight back against discrimination, but were brutally suppressed in early1989, the fatal year that upset everyone's calculations.
Bulgaria had a particularly anachronistic apparatchick in charge in the shape of Todor Zhikvov, a dinosaur from way back, 1954 no less, who had been throttling his country's politics for three and a half decades. He was completely out of touch with reality, as much so as Ceaucecu next door in Romania. 300, 000 Turks fled to Turkey in mid-1989 to international outrage at their treatment by the regime, Credits were cut off and an already feeble economy was devastated. 
His own colleagues realized that he had to go, especially with the remarkable events unfolding in Poland, East Germany, Czechoslovakia an Hungary. On November 10th he was deposed and the CBP began a dialogue with the newly-formed Union of Democratic Forces, congeries of oppositionists inspired by Solidarity and the downfall of the Berlin Wall. History was on the march.
On December 29th the government revoked the anti-Turkish legislation, the burning issue of the day. This provoked chauvinist and pro-Zhikvov elements to mount a demonstration against the revocation in Sofia. At this key juncture the liberals in the UDF found a common cause with those pro-Gorbachev elements in the CBP to mount a counter-demonstration a week later, backing the revocation of December 29th. Within a few days the UDF and the CBP were in round-table discussions to set up a post-communist government, which duly emerged. The Turkish issue had precipitated, along of course with Gorbachev, the collapse of Bulgarian communism. QED.
The Bulgarians have not forgotten this remarkable chain of events. They know how crucial was the role played by the Turks in bringing about the downfall of the old order. The MRF is a key player in Bulgarian politics and the new question of Turkish entry could have a big impact, given that Turkish immigration is always likely to be greater into countries in the EU in which a large Turkish population already lives. Bulgaria is aspiring to EU entry itself shortly, say 2007, well before Turkey. 

Bulgaria, Turkey: Turkish investors eye Bulgaria's unused EU funds 
Turkish businessmen are coming to town before Turkish immigrant workers, as it so happens. Turkish investors aim at getting their hands on EU funds allocated to Bulgaria in the areas of meat, dairy and wine production that Bulgaria still has not utilized, Sofia News Agency reports. Long-sighted Turkish investors were setting up in Bulgaria as long as ten and more years ago, when it seemed that Turkey might never gain membership of the EU. 
These funds are suitable for acquiring credits, and Bulgaria provides terrains and tax reliefs. Even better is the right for the Turkish goods to carry the label "Made in EU" upon Bulgaria's accession in 2007. A lot of business sectors in Bulgaria, mainly in agriculture, offer opportunities for cooperation and co-production. 
The Turkish investors could acquire the funds left unused for infrastructure and agriculture through collaboration with Bulgaria or through direct investments. 
The Bulgarian Central Bank and the Turkish Council of Banking Control have signed an agreement for cooperation, and the TBBC planned a meeting in October in Sofia in order to discuss further the opportunities available for Turkish investors. 

Bulgaria-Turkey trade doubles
Trade between Bulgaria and Turkey for 2005 is expected to be worth US$2bn. That would mean a 100% increase over the last two and a half years, data show.
Turkish entrepreneurs held a meeting with partners from the region of Haskovo, south Bulgaria. The Turks have shown interest for investments in Haskovo-based meat, milk and wine businesses.

Bulgaria's President meets Bush in Washington
The official visit of Bulgaria's President Georgi Parvanov to the US took place on October 17th with a meeting with his host George Bush.
During the meeting Parvanov expressed Bulgaria's hope for a quick solution to the talks on US military bases at Bulgaria's coasts. Bush was officially informed of Bulgaria's decision to pull out its troops from Iraq at the end of the year, as well as of the country's will to remain in the antiterrorist coalition and the plans for supporting the democratic processes in Iraq from the beginning of 2006.
Ways of boosting US investments in Bulgaria were discussed. "I can make a comparison with other visits of mine. The attitude during this meeting was different - as between allies and between friends", the Bulgarian President Georgi Parvanov said after the end of his visit to the U.S. in an informal talk with Bulgarian journalists. Parvanov invited media representatives in the "Cheers" bar in Boston, the place where the well-known TV series were shot. When asked whether the good relations between Bulgaria and the U.S. would affect negatively the Bulgarian relations with European states, Parvanov said: "We are conducting European policy to the U.S. There is nothing different in our policy than that of other European states".

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AVIATION

New low-cost Wizz Air flies to Sofia 


Wizz Air, a new European low-cost airline which flies Sofia-Budapest route four times a week, completed its first flight with Sofia as its destination, Bulgarian News Agency reported recently. 
The tickets for this flight started selling in Bulgaria three months before and 155 passengers were on board for this flight, which amounts to 86 per cent of the plane's capacity. The airline took off at the end of May from the southern Polish city of Katowice, initially flying to Budapest, London's Luton airport, Rome, Milan, Venice and Berlin. Wizz Air focus on the markets of central and eastern Europe and currently works on expanding the number of flights out of other Bulgarian airports and increase the destination sites throughout Europe.

New low-cost airline enters Bulgarian market 

SkyEurope Airlines, central Europe's largest low cost airline group, announced recently that it had gained traffic rights to open services to Sofia and Bucharest. SkyEurope obtained traffic rights from the Bulgarian and Romanian authorities. SkyEurope was established in 2001 and pioneered low-cost aviation in central Europe by becoming the first low-cost airline to open bases in Slovakia, Hungary and Poland. In order to further build on its first mover advantage, SkyEurope is now expanding eastwards, with the first low-fare flights between Bratislava, conveniently located only 50 kilometres away from Vienna, and the Bulgarian and Romanian capitals. CEO, Christian Mandl, said that his company is expecting to bring low fares to Bulgaria and Romanian travellers and also position Sofia and Bucharest on the map of trendy tourism destinations. Flights to and from the Bulgarian and Romanian capitals will begin on December 9 and 12, with fares starting from 25 Euro one-way, excluding taxes, Sofia News Agency reported.

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BANKING

Banks launch SMS service for transactions

Five Bulgarian banks - Hebros Bank, Bulbank, Raiffeisenbank (Bulgaria), first Investment Bank and DZI Bank - started offering card balance alerts via SMS messages, Bulgarian News Agency reported recently.
The information provided to the clients by the banks via cell phones are usually related to recent transactions performed with their cards. Bulbank informs its clients about all transactions with their cards via POS terminals and ATMs within 10 minutes, quoting the time and location of the operation and the transacted amount. Raiffeisenbank (Bulgaria) and DZI banks offer immediate notification about any movement on their clients' cards. This option makes it possible to curb losses stemming from lost or stolen cards to a single transaction, of up to 400 levs in the case of cash withdrawals from ATM. Another popular type of text message informs clients that their electricity, phone, central heating and cable TV bills have arrived, stating the amount of money to be paid by them. This option is available to Raiffeisenbank (Bulgaria) and Transcard holders. Holders of Credo and Hebros cards, as well as cards issued by Raiffeisenbank (Bulgaria), receive reminders about forthcoming credit repayments.

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CREDIT RATINGS

S&P withdraws MobilTel's long-term credit rating 

Standard & Poor's Ratings Services recently announced that it withdrew its BB+ long-term corporate credit rating on Bulgaria-based leading mobile telecommunications operator Mobiltel AD at the request of the company, New Europe reported. 
The move followed the completion of Mobiltel's acquisition by Austria-based integrated telecoms operator Telekom Austria AG and the early redemption of Mobiltel Finance's 200m Euro notes due 2009. The telecom's obligations were refinanced by an intercompany loan from Telekom Austria. Mobiltel is a leader on the mobile telephony market in Bulgaria in terms of subscribers, revenues, and EBITDA (with a 62.4 per cent subscriber market share at June 30, 2005). The rating agency said that according to data, the Bulgarian mobile telephony market offers opportunities for growth in subscribers and traffic given the moderate penetration level of about 70 per cent.

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FOREIGN DEBT

Bulgaria to write off 80% of Iraqi debt 

At the recent annual meetings of the International Monetary Fund (IMF) and the World Bank in Washington, Bulgarian Finance Minister, Plamen Oresharski, announced that his country plans to follow an agreement of the Paris Club of creditors and write off 80 per cent of the US$1.7 billion in Iraqi debt, Sofia News Agency reported. 
"The Paris Club agreement provides for an 80 per cent wipe off (of the money owed by Iraq) and a rescheduling of the remaining 20 per cent. We do not have a much room for manoeuvre, as this is an international practice," Oresharski was quoted as saying.
Oresharski affirmed that an agreement was reached with Iraqi Finance Minister, Ali Allawi, "to start consultations over the possibilities of settling the debt." His response was positive when asked whether a 20 per cent reimbursement would be discussed. Bulgaria, whose current account deficit stands at 10 per cent of GDP despite an IMF imposed fiscal austerity policy, has until now refused to follow the Paris Club policy of wiping off Iraqi debt.

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FOREIGN ECONOMIC COOPERATION

Azerbaijan, Bulgaria to boost business ties 

Azerbaijani President, Ilham Aliyev, on his recent visit to Bulgaria explored the country's business opportunities. A meeting was held on September 24th between Bulgaria's President, Georgi Parvanov, and Aliyev in the coastal capital Varna, Sofia News Agency reported. 
Both leaders agreed that infrastructure development would help to boost economic relations. Aliyev met Bulgarian business representatives and was acquainted with the peculiarities of the Bulgarian tourism sector. He urged Baku to consider other energy projects besides Baku-Tbilisi-Ceyhan Pipeline, including Burgas-Alexandrandroupolis and Burgas-Vlora pipelines. Bulgaria and Azerbaijan vowed to strengthen their economic relations. Aliyev said both countries should boost ties in power engineering, infrastructure, farming, food industry, construction and pharmacy. The two heads of state signed a joint declaration, calling for intensifying aid in EU integration.

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INFORMATION TECHNOLOGY

Cabinet sets up state agency for IT creation 

Bulgaria's cabinet has issued a decree creating a state agency for Information Technologies and Communications, a secondary spending unit, Sofia News Agency reported recently, citing the government's information service. 
The agency is created pursuant to a parliament decision on August 16th. The agency will guarantee the independent policy in the field of communications and IT. The staff will comprise officials of the communications policy and information society and IT directorates of the transport and communications ministry. The cabinet picked Plamen Vachkov, 56, to be chairman of the new agency. Vachkov graduated in electrical engineering and is a Doctor of Science (Tech.). He specialised in micro-processor devices in France, in management in the US and in quality management in Japan.

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TELECOMMUNICATIONS

Viva-Ventures to launch third mobile operator in Bulgaria 

Bulgaria's third GSM operator Viva-Tel, a subsidiary of the Austrian-based Viva- Ventures, on September 8th announced that it will become the third mobile phone operator in Bulgaria by the end of this year. Vivatel, owned by BTC Telecom, presented its red-and-blue logo, which features a broad smile, painted on a large banner at the foot of Mount Mousssala, the highest peak in Bulgaria, New Europe reported.
Local media reports claim that the existing operators keep prices among the highest in Europe, though Bulgaria is among the poorer, with average monthly wages of around 150 Euro. BTC Mobile CEO, Richard Shearer, said the operator would offer "reasonable" and "highly competitive" prices. Shearer added that Vivatel will face very low network expenses and will be able to offer much lower prices. Viva said it would offer services at prices up to 20 per cent lower than the competition - Bulgaria's two existing mobile operators Telekom Austria's MobilTel and the Greek Globul, BTC head, Dennis Wallach, said recently. 
Bulgarian customers are looking forward to finding out whether the increased competition would bring down prices. MobilTel has more than 3.2 million customers. According to Wallach, Vivatel would make the local market much more dynamic. Officials selected the name Vivatel in August, after a nation-wide survey. 
BTC Mobile also announced it will invest more than 200 million Euro at its GSM infrastructure over the next two years. Vivatel should start operating before Christmas. 
Plans were to launch the third mobile network last April, but a delay was imposed because of auctions for UMTS licences and BTC Mobile negotiations with MobilTel and Globul. Shearer said Vivatel will aim to make cellular service affordable for all Bulgarians but stopped short of revealing the exact call tariffs. Insiders said the main problem holding back the take-off of the new GSM operator is the lack of a billing system. Vivatel, which will cover 90 per cent of Bulgaria's eight million population at launch, will try to snatch customers from MobilTel and GloBul. 

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