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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)

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Update No: 164 - (26/04/11)

Bulgaria's economy is unlikely to grow to the level at which the government can effectively tackle corruption and organised crime after failing to enter the EU's passport-free travel zone.

In December, Berlin and Paris opposed both Romania and Bulgaria’s entry into the EU’s passport free travel area because of concerns that the countries have not done enough to clean up corruption and organised crime, raising concerns about their ability to curb illegal immigration. The countries were due to enter the Schengen zone in March.

A Franco-German letter sent to the European Commission, said: “Deficiencies would have serious consequences for the internal security of the EU and each member state.”
While Romania has formally met conditions set by Brussels for allowing passport-free travel within all EU countries, except for Britain and Ireland, Bulgaria has so far failed to prove that its Black Sea borders are secure.

EU diplomats and officials suggested that the French and German move was driven by concerns over immigration from Bulgaria and Romania, but their fears may also stem from the fact that Bulgaria is a major transit hub for illegal cigarettes, drugs and trafficked people from the East. Corruption and organised crime are still rife in Bulgaria even though it has not been a communist state for 20 years, and favouritism and the need to give backhanders to secure business deals has put foreign investors off and stunted Bulgaria's economic growth.

Bulgaria is the poorest of the EU member states, and the economy is not picking up fast enough. The government believes that the economy will grow by 3.6 percent this year after rising exports pulled it out of recession at the end of last year, but the real figure will be less, as the real estate boom that boosted previous growth will not be repeated.

If the country's economic expansion continues to be poor, tax revenues will be lower than expected and social spending higher, scuppering government plans to halve the budget deficit to 2.5 percent. More than 120,000 workers have lost their jobs in the past two years and unemployment jumped to 9.2 percent in 2010. More than a fifth of the population live on less than $6.50 per day, and the number of unemployed people under 29 doubled in the last two years to about a fifth.

As poverty in the country persists, corruption remains strong, and the Bulgarian government needs to show that it is doing more to curb it – and tackle organised crime – to maintain EU trust and ensure entry into Schengen.

However, that seems unlikely for now. According to transcripts leaked to media, Prime Minister Boyko Borisov allegedly offered a brewery owner protection from customs checks, and the opposition Socialists said that the information implied high levels of favouritism in the government. Borisov insists he hasn't done anything wrong and that he was trying to cut links between high-level corrupt officials and organised crime bosses.

Two senior officials have been convicted for abuse of power and embezzlement, winning praise from the EU, but Bulgaria still needs to put more high-level corrupt officials behind bars to prove that joining Schengen will not flood the European market with dodgy goods, trafficked women and drugs. The irony is that Bulgaria's ability to address its problems will most likely come from the economic boost of receiving cash sent back from migrant workers in Western Europe. Richer countries may not necessarily have less to worry about by not admitting Bulgaria into the Schengen agreement.

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