IPI presented "Regional Profiles: Development Indicators - 2022"
November 16, 2022
Since 2012, the Institute for Market Economics has been presenting its unique study on the social and economic conditions of the regions in Bulgaria, which is unparalleled in its scope and depth. The Regional Profiles cover 68 indicators that depict the real picture in the country's 28 regions.
All data and materials can be found at www.regionalprofiles.bg. Over the past decade, numerous challenges have been reshaping the economic and social landscape of the country, including investment and growth slowdown, the pandemic and subsequent recession, rapid recovery, political instability, the war in Ukraine, and an energy crisis in Europe. These periods have had different manifestations at the local level, testing the potential for local coping and response, allowing some regions to progress in their development, but ultimately, differences between regions persist, and the gap between the capital and the provinces, large and small, developed and poor, does not significantly narrow. On a broader scale, economic imbalances between Northern and Southern Bulgaria are predetermined by the smaller scale of economic centers in the north and weaker connectivity.
Almost every region distinguishes itself with successful performance in a specific area - for example, education in Smolyan, healthcare in Pleven, investment activity in the Sofia region, and several regions show potential for overall development improvement. The unfolding of this improvement into tangible and lasting enhancements in people's lives and the business environment depends on both the processes in major economic centers and their periphery, as well as the development of secondary economic centers that still lag behind.
In addition to Sofia (the capital), Plovdiv, Varna, Burgas, and Gabrovo, which have consistently performed well overall, the latest edition includes Stara Zagora, Veliko Tarnovo, and Ruse, which have fared relatively well through the challenges of the pandemic.
However, the greatest challenge lies in the demographic situation. The 2021 Census shed light on the severe demographic problems facing the entire country, including the capital. Data on the working-age population (15-64 years) further reveal a deep contraction of human capital - 20 out of the 28 regions have lost at least one-fifth of their workforce. While the decline in natural population growth reflects long-term processes that require vision and time for mitigation, mechanical population growth can be influenced by short-term policies.
However, the lack of adaptation to the declining population, despite being an ongoing process for years, continues to directly impact the provision of public services (education, healthcare, public order, culture, etc.) and the ability of the private sector to employ workers. The problems faced by local authorities due to demographic trends will further deepen in terms of higher costs, the need for optimization, and adaptation to new realities. To enable such adaptation, more local resources and freedom in implementing regional and municipal policies are necessary.
The regions in the country have different economic profiles that predetermine their different development trajectories. Regions with developed industries and strong penetration of digital services tend to have better performance. There are successful examples (such as a group of municipalities in the Srednogorie Regions) that demonstrate there are no insurmountable barriers to local economic and social transformation.
We expect to soon see data showing a new region in Northern Bulgaria that will experience significant improvements in the quality of life and become a dynamic economic hub that spills over its influence into peripheral areas - a process that already allows several smaller centers in Southern Bulgaria to retain and attract people and investments.
This depends on various national-level policies, but also on the powers, capacity, and financial independence of local authorities.
Video of the event (Facebook): https://fb.watch/gQzbnzLsLh/
Presentation from the event: https://ime.bg//var/images/Presentation_ALL.pdf
Summary of the study: https://www.regionalprofiles.bg/var/docs/RESUME_RegionalProfiles2022.pdf
Annual report: https://www.regionalprofiles.bg/var/docs/Reg_Profiles_BG_2022.pdf
Data: https://www.regionalprofiles.bg/bg/data/
The "Regional Profiles: Development Indicators" project is supported by the America for Bulgaria Foundation.
