competitiveness of bulgaria competitiveness of bulgaria kamen kolev, phd kamen kolev, phd the...

COMPETITIVENESS COMPETITIVENESS

OF BULGARIAOF BULGARIA



Kamen Kolev, PhDKamen Kolev, PhDKamen Kolev, PhDKamen Kolev, PhD

THE EUROPEAN DAY OF THE ENTREPRENEURTHE EUROPEAN DAY OF THE ENTREPRENEUR

Bulgarian Industrial AssociationBulgarian Industrial Association www.bia-bg.comwww.bia-bg.com

GDP growth, GDP growth, %%GDP growth, GDP growth, %%


-5,60%

3,50% 2,50% 5,50% 4,70% 4,80% 4,30% 5,00%

-6%

-4%

-2%

0%

2%

4%

6%

1997 1998 1999 2000 2001 2002 2003 2004e

Basic economic indicatorsBasic economic indicators

Six consecutive years Bulgaria has Six consecutive years Bulgaria has positive growth of the GDPpositive growth of the GDP

Bulgaria received the Bulgaria received the investmentinvestment credit rating in foreign and local credit rating in foreign and local currencycurrency

Open economy – well integrated in Open economy – well integrated in global economyglobal economy

Employment rate is 52.5% Employment rate is 52.5% or or 10% lower than the average for EU 10% lower than the average for EU (62.5%)(62.5%)


Top 10 biggest Bulgarian partners in foreign tradeTop 10 biggest Bulgarian partners in foreign tradeTop 10 biggest Bulgarian partners in foreign tradeTop 10 biggest Bulgarian partners in foreign trade


COUNTRIES

Export

%

Import

%

Foreign Direct

Investments %

Position by competitiveness

WEF 2003 Bulgaria – 64th position

Innovation capacity in 2002

Bulgaria – 50 IITTAALLYY 1144,,9900 1100,,1100 88,,9922 4411 2222

GGEERRMMAANNYY 99,,5500 1144,,8800 99,,9955 1133 33

TTUURRKKEEYY 99,,3300 44,,1100 11,,9988 6655 4444

GGRREEEECCEE 88,,7700 55,,7700 1144,,7700 3355 4422

FFRRAANNCCEE 55,,3300 55,,7700 22,,0022 2266 99

BBEELLGGIIUUMM 55,,3300 11,,4400 77,,5533 2277 1155

SSEERRBBIIAA aanndd MMOONNTTEENNEEGGRROO

44,,9900 00,,3300 00,,0000 7777

UUSSAA 44,,7700 22,,9900 55,,0088 22 11

SSPPAAIINN 22,,9900 11,,8800 11,,7700 2233 2211

UUNNIITTEEDD KKIINNGGDDOOMM

22,,7700 22,,5500 44,,0088 1155 44

TOTAL: 68,20 49,30 55,96

Priority product groups (USD mln)Priority product groups (USD mln)Priority product groups (USD mln)Priority product groups (USD mln)


183

126

29

45

59

18

47

84

224

542

94

59

66

64

76

61

102

62

307

0 100 200 300 400 500 600

GARMENTS AND ACCESSORIES FOR THE GARMENTS

KNITWEAR

FERROUS METALS, STEEL AND PRODUCTS

SHOES, HATS, UMBRELLAS AND PARTS

NON-ORGANIC CHEMICALS

OIL SEEDS AND FRUITS

HONEY AND HONEY PRODUCTS

REFRESHMENTS AND ALCOHOLIC DRINKS

FERTILIZERS

FURNITURE; ARTICLES

WOODEN MATERIAL AND PRODUCTS

ORGANIC CHEMICALS

SALT; SULPHUR, STONES; GYPSUM, CEMENT

CERAMIC PRODUCTS

MILK, MILK PRODUCTS; EGGS; HONEY

GRAINS

TOBACCO AND PROCESSED SUBSTITUTES

ZINC AND ZINC PRODUCTS

LEAD AND LEAD PRODUCTS

Short and Long-Term Bank Loans Short and Long-Term Bank Loans (incl. for (incl. for households)households)

Short and Long-Term Bank Loans Short and Long-Term Bank Loans (incl. for (incl. for households)households)


1,209 2,669 3,730

3,019

4,140

6,025

9,351

11,964

0,569 0,8320

2

4

6

8

10

12

2000 2001 2002 2003 .08.2004.

Mln. BGN

Unemployment rate, Unemployment rate, %%Unemployment rate, Unemployment rate, %%


10

12

14

16

18

20

22

2000 2001 2002 2003

18.00 17.88 16.27

11.9

17.5

13.52

08.2004

Short-term risksShort-term risks

Constantly rising prices of petrol and natural gas

Trade balance deficit

Decommissioning of the NPP “Kozloduy” blocks

“Green” investments; Certification of management and environmental systems in enterprises

Investments in occupational safety and health at work, incl. via emigration


Bulgaria – Sources of CompetitivenessBulgaria – Sources of CompetitivenessNatural and human resources

Potential for improvement and growth

Geopolitical situation of the country

Higher rate of GDP growth

Increasing the labour productivity and use of the workforce

FDI – “second wave” in Central and Eastern Europe

Renovation of production and product range



-5%

0%

5%

10%

15%

20%

25%

30%

- 200 400 600 800 1 000 1 200 1 400 1 600

Mining industryMining industry

Growth of world tradeGrowth of world trade

Agriculture, hunting Agriculture, hunting and forestryand forestry

Bulgaria, export growthBulgaria, export growth

Energy and fuelsEnergy and fuels

BuildingBuilding

Transport, storage Transport, storage and communicationsand communications

Trade and Trade and repairrepair

Processing Processing industryindustry

Finances and Finances and business servicesbusiness services

FDI FDI in Bulgaria in Bulgaria by sectors by sectors (USD mln)(USD mln)

Export growth Export growth by sectorsby sectors (%) (%)

Possibilities for strategic alliances (1998 – 2003)Possibilities for strategic alliances (1998 – 2003)Possibilities for strategic alliances (1998 – 2003)Possibilities for strategic alliances (1998 – 2003)

Shortcomings and obstaclesShortcomings and obstacles

GDP per capita in PPP below 30% compared to the one in EU 15

Education -> Science -> Innovation connection is cut off

Production and export of goods with small value added and innovation potential

Worsening the qualities of the human capital and workforce


Median age of the populationMedian age of the populationMedian age of the populationMedian age of the population


30

32

34

36

38

40

42

AustriaBelgium

UKGermany

Greece

Denmark

Estonia

Ireland

Spain

Italy

CyprusLatvia

LithuaniaMaltaNorw ayPolandPortugal

Slovenia

Hungary

Finland

France

The Netherlands

Czech Republic

Sw itzerland

Sw edenBulgaria

Romania

Population under, in and over working agePopulation under, in and over working agePopulation under, in and over working agePopulation under, in and over working age


21,6

55,5

22,9

19,1

56,6

24,3

16,8

58,3

24,9

16,3

59,2

24,5

15,9

60,1

24,0

15,5

60,8

23,7

0%

20%

40%

60%

80%

100%

%

1990 1995 2000 2001 2002 2003

Under working age - % In working age - % Over working age - %

Companies certified under ISO 9000 per 1 Companies certified under ISO 9000 per 1 mln.inh.mln.inh.

Companies certified under ISO 9000 per 1 Companies certified under ISO 9000 per 1 mln.inh.mln.inh.


Country 1998 1999 2000 2001 2002

Austria 406 428 478 500 512

Belgium 307 338 364 452 457

Germany 293 368 396 508 437

Ireland 751 816 876 974 749

Italy 314 366 527 835 1063

Slovenia 250 259 419 510 484

Hungary 166 328 467 636 925

Czech Republic

141 147 378 552 832

Bulgaria 12 24 32 57 76

Romania 12 21 46 74 110

Turkey 25 26 36 46 61

Croatia 27 45 67 92 131

What is necessary?What is necessary?

To achieve long-term To achieve long-term competitiveness, based on knowledgecompetitiveness, based on knowledge

Adoption and execution of action plan Adoption and execution of action plan according to the Lisbon Strategy 2000according to the Lisbon Strategy 2000

Facilitation of the business Facilitation of the business environmentenvironment

Reduction of criminal factorsReduction of criminal factors

Attraction of private investments, incl. Attraction of private investments, incl. Public private partnershipsPublic private partnerships


BIA Competitiveness indexBIA Competitiveness index

Annual index

Integral multi-criteria quantitative measure for the state and amendment of the competitiveness

Competitiveness is meant as environment and conditions in which business is performed

Macro-environment

Micro-environment


Competitiveness index for the period 2001 - 2003Competitiveness index for the period 2001 - 2003Competitiveness index for the period 2001 - 2003Competitiveness index for the period 2001 - 2003


98

100

102

104

106

108

110

2001 2002 2003

Macro-environmentMicro-environmentCompetitiveness Index

BIA Competitiveness indexBIA Competitiveness index

Revival of the economy

Improvement of the macro-environment

Modest positive changes in the micro-environment

Situation is uncertain

No tangible signs for stabilization of business-environment

Slow enhancement of the competitivenessBulgarian Industrial AssociationBulgarian Industrial Association www.bia-bg.comwww.bia-bg.com

The Year 2003 characteristicsThe Year 2003 characteristics


GDP Growth - 2nd Q 2004GDP Growth - 2nd Q 2004

- 1st H 2004- 1st H 2004

6,0%6,0%

5.6%5.6%

Gross Fixed Capital FormationGross Fixed Capital Formation

- 2nd Q 2004 - 2nd Q 2004 - 1st H 2004 - 1st H 2004

21,6%21,6%

20,2%20,2%

Industrial ProductionIndustrial Production

Industrial SalesIndustrial Sales (June 2004, y-o-y) (June 2004, y-o-y)

21,5%21,5%

26,4%26,4%

Interbank Money Market Interbank Money Market average daily volumes average daily volumes in BGNin BGN

120 mln.120 mln.

Foreign investments (1Foreign investments (1stst H 2004) H 2004) 11991199 mln.mln. $$

Public Sector External Debt (Public Sector External Debt (% GDP% GDP)) 3737..88 % %

RECENT DEVELOPMENT TRENDS





Kamen Kolev, PhDKamen Kolev, PhDKamen Kolev, PhDKamen Kolev, PhD

THE EUROPEAN DAY OF THE ENTREPRENEURTHE EUROPEAN DAY OF THE ENTREPRENEUR


competitiveness of bulgaria competitiveness of bulgaria kamen kolev, phd kamen kolev, phd the...

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