Economic Development of Southern Bulgaria – Blagoevgrad, Plovdiv and Stara Zagora
Yavor Aleksiev
Over the past week, the Institute for Market Economics (IME) organized its first series of round tables throughout the country (June 9th-12th), focusing on current issues of regional development. The first three round tables were held in Blagoevgrad, Plovdiv and Stara Zagora and included representatives of local businesses and NGOs, as well as representatives of district and municipaladministrations.
Main impressions from Southern Bulgaria
The Southern Central and the Southeast regions continue to be the main drivers of the economic recovery of the country in 2014. Several districts (like Pazardzhik, Plovdiv and Sliven) enjoy increased investment interest and rising employment in 2013, as well as in the beginning of 2014. The economic recovery of Burgas is also well underway – a strong summer season may result in annual employment levels surpassing those before the crisis. The labor market in Southeast Bulgaria remains subdued, which has a negative effect on the economic recovery of Blagoevgrad, Pernik and Kyustendil. Sofia (capital) is the only district that registered positive tendencies in 2013 and the first quarter of 2014.
Positive tendencies:
- Increasing investment potential and stronger interest towards the IT sector in Plovdiv;
- Postponement of planned staff cuts in leading companies in and around Stara Zagora, despite continuing economic uncertainty;
- Positive effect of putting the Trakia Highway into operation on economic activity in the districts of Yambol and Sliven;
- ncreasing investment activity in one of the country’s poorest districts – Silven, coupled with tendencies for an increasing number of jobs in the second half of 2014;
- Positive business expectations regarding employment, investment and revenue levels in most Southern districts, including some of the poorest ones;
- The local administration in the district of Plovdiv realizes the extent of missed opportunities for more active participation in the Operational Programs of the EU – measures have been taken to esure higher EU funds’ absorption and there are, in our opinion, realistic expectations for improving effectiveness in the near future;
- There is a prevailing positive attitude towards the idea of increasing the financial authority and autonomy of municipalities (for instance, through the retention of a part of the income tax, paid by employees in their jurisdiction), which aims to create additional incentives for local administrations to attract investment.
Negative tendencies:
- The lack of adequately qualified workforce (for both local and international businesses) is a problem that to a vast extend defeats two of the main competitive advantages of the Bulgarian economy – low taxes and low labor costs;
- Although in some places (Blagoevgrad) there are recent examples of successful cooperation between local businesses, educational establishments and the local administration, the postponed adoption of more up-to-date legislation in the educational field hinders the synchronization between labor market needs and the educational system;
- Businesses are negatively affected by the continuing political crisis;
- Local administrations are seriously concerned about the prospect of a potential freeze of funds under some European programs;
- The uncertainty in the energy sector is a problem of particular importance to businesses in some districts (especially Stara Zagora);
- The lack of strategic investors in some districts of the country (like Blagoevgrad) and newly opened enterprises is a serious issue. The prevailing impression is that the vast majority of foreign capital is attracted by a drive for quick returns, which does not give opportunities for long-term economic development and income increase.
During the next week the IME will organize a series of round tables in Varna, Gabrovo and Vratsa:
Monday, June 16, 2014 Varna
- Presentation of the study "Regional Profiles: Indicators of Development" with a focus on the development of Varna and the Northeastern region, followed by a discussion
- Location: Varna Radio Concert Studio
- Start: 9:45
Wednesday, June 18, 2014 Gabrovo
- Presentation of the study "Regional Profiles: Indicators of Development" with a focus on the development of Gabrovo and the North Central region, followed by a discussion
- Location : Technical University - Gabrovo , Library Hall
- Start: 9:45
Thursday, June 19, 2014 Vratsa
- Presentation of the study "Regional Profiles: Indicators of Development" with a focus on the development of Vratsa and the North Central region, followed by a discussion
- Location: Chamber of Commerce and Industry Vratsa
- Start: 9:45
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The events will be held in Bulgarian.
Join us! For more information and registration:
Vessela Dobrinova | vessela@ime.bg | (+359 2) 952 62 66
The series of round tables is a part of the preparation of the forthcoming study “Regional Profiles: Indicators of Development 2014”, carried out with the financial support of the “America for Bulgaria” Foundation.
