News

Petar Ganev

In mid-June 2013 for a second year in a row IME embarked on а tour of the 28 districts in Bulgaria as a part of the upcoming second edition of the study “Regional Profiles: Indicators of Development”. By holding meetings with representatives of non-governmental organizations, business associations and regional authorities, IME’s team aims to acquire direct impressions of the socio-economic environment in each district.

During the second part of our trip we visited the regions of Vratsa, Pleven, Lovech, Gabrovo, Veliko Tarnovo, Targivishte, Shumen, Razgrad, Ruse, Silistra, Dobrich and Varna. We will use our observations from these visits for the completion of each region’s profile in the upcoming second edition of our study. Some of the underlying socio-economic trends that we observed in the regions of Northern Bulgaria are:

• The main problems facing the northern regions are weak economic activity and shortage of workplaces. Leaving the economic predicaments aside, the social environment is still generally perceived as good. To put it simply: “It is nice to live here, but there is no work”;
• Throughout the past year a certain livening of economic activity was observed – despite the lasting prevalence of bleak perceptions spurred by years of decline in revenues and employment, the past year has given active enterprises a breath of fresh air;
• Our regional trip quickly disproved the familiar phrase: “There is no production. Nothing works anywhere.” In virtually every district there are foreign investments and active manufacturing firms, some of which enjoy good market positions abroad. However, the presence of a few strong businesses cannot provide economic revival or employment for all;
• There is a widespread perception that in recent years small and medium-sized enterprises have been put under a lot of pressure – centralized decision-making (e.g. minimum insurance thresholds) and malfunctioning institutions (due to corruption, heavy administrative burden, etc. ) have harmed smaller businesses in favor of larger ones;
• It is widely agreed that the levels of undeclared pay in active firms has declined – a growing number of workers demands insurance instead of money “under the counter”. The increase of minimum wages and social insurance thresholds has contributed to the rise in unemployment, especially among low-skilled workers;
• Businesses are subjected to constant institutional oppression – it would be sufficient to mention that we heard someone say “The Labor Inspectorate is more dreadful than the National Revenue Agency”. We have also confirmed our impression that institutions are putting a heavy burden on enterprises that actually work instead on ones that remain completely unregulated;
• There has been a decline in the number of high-skilled workers – in many places there is the paradox of high unemployment combined with lack of qualified personnel. These imbalances in the labor market are exacerbated by the fact that very often young people are not interested in working in the industrial sector;
• The activity of local authorities is crucial for investment on regional level. However, in many places their efforts are primarily focused on the absorption of EU funds, and not so much on attracting investors;
• In the past few months there has been a certain standstill in the work of institutions – because of the protests at the beginning of the year and the subsequent political woes, and also due to the change of key figures, the administration has distanced itself and maintained a stand-by position. This represents both a breath of fresh air – in the form of less pressure and control, and a problem for local businesses – because of delayed decisions and slow progress with projects depending on the administration.

IME would like to extend its gratitude to all of our partners and especially the representatives of the Bulgarian Chamber of Commerce and Industry (BCCI) for their cooperation in the organization of local meetings and workshops.

The project "Regional Profiles: Indicators of Development" is carried out with the support of the America for Bulgaria Foundation.