1. Ministry of Economy & Energy presents Enterprise Policy Directorate

2. Introduction to OPERATIONAL PROGRAMME DEVELOPMENT OF THE COMPETITIVENESS OF THE BULGARIAN ECONOMY 2007-2013 „Operational Programme Enterprise and Innovations 2007 – 2013: The Gate of Czech Enterprises to Prosperity on Domestic and Foreign Markets“ 27 April 2006 in Senate House – Valdštejnský palác

3. GDP EURO mio Since 1997 GDP increased by more than 140% Real Growth Rate for 2005 5.5% GROSS DOMESTIC PRODUCT ALL-ROUND DEVELOPMENT 5.5% 5.7% 4.5% 4.9% 4.1% 5.4% 2.3% 4.0% -5.6% Real Growth Rate

4. Closest EU member countries to Bulgaria in terms of population - 2005 5,432,000 8,185,000 5,431,000 7,719,000 Age Structure % Population +0.34% +0.11% +0.15% -0.85% Since 1997 Bulgarian population decreased by 565,000 people POPULATION ALL-ROUND DEVELOPMENT

5. 2006 forecast & change towards EU-25 since 1997 100%122%124%56%33% +10% +8% -2% 0% GDP per capita in PPS (EU-25 =100) ALL-ROUND DEVELOPMENT Since 1997 Bulgarian GDP PPS is steadily increasing but still very slowly

6. Rates 1997 - 2005 5.0% 2.8% 2.2% 2.1% 1.7% Price levels of final consumption in 2005 & change towards EU-25 since 1997 100%55%43%104%137% +5% +10% +13% -5% Coming from 1058.4% in 1997 INFLATION ALL-ROUND DEVELOPMENT Now the inflation is stable and relatively low – it has to be decreased more

7. Overall change in number of unemployed people in % since 2001 +7.0% +7.6% +49.9% -14.5% -50.5% 16.4% 9.9% 8.7% 5.2% 4.8% Rates 1997 - 2005 UNEMPLOYMENT ALL-ROUND DEVELOPMENT Unemployment is decreasing fast – more jobs to be created soon

8. VALUE ADDED STRUCTURE Value Added by Sectors in % 42.6% ALL-ROUND DEVELOPMENT Manufacturing has the greatest share in Gross Value Added

9. NUMBER OF ENTERPRISES Comparison: Bulgaria = 100 199720031997-2003 Number of Enterprises Change in Number of Enterprises Bulgaria100100+14% Slovakia825+238% Austria105104+12% Denmark10268-24% MANUFACTURING Similar shares of SMEs in the number of enterprises

10. TURNOVERTURNOVER Comparison: Bulgaria = € 1 M 199720031997-2003 Turnover of Enterprises Change in Turnover of Enterprises Bulgaria1.01.0+56% Slovakia 1.71.8+94% Austria 12.411.1+27% Denmark 8.47.5+23% Bulgarian enterprises are catching up but the gaps are still big MANUFACTURING

11. Comparison: Bulgaria = € 1 M 199720031997-2003 VA of Enterprises Change in VA of Enterprises Bulgaria1.01.0+42% Slovakia1.71.9+76% Austria20.217.8+25% Denmark14.411.9+18% The gap in value added is even larger but it’s also decreasing MANUFACTURING VALUE ADDED to FACTOR COST

12. EMPLOYMENT & PRODUCTIVITY Apparent Labour Productivity – it seems with more workers we produce lesser value added Comparison: Bulgaria = € 1 K 2003199720031997-2003 Employees in Enterprises Bulgaria = 1000 GVA per person employed Change in GVA/ person employed Bulgaria1000 1.0 e 1.0+63% Slovakia 6812.4 e3.2+142% Austria 99725.5 e20.5+25% Denmark 71222.9 e19.2+34% MANUFACTURING

13. Simple Wage Adjusted Labour Productivity – actually Bulgarian enterprises produce at the same rate of productivity but obviously products with lower value added and with lower unit labour cost Comparison: Bulgaria = € 1 K 2003199720031997-2003 Employees in Enterprises Bulgaria = 1000 GVA per unit personnel cost Bulgaria1000 1.0 e 1.0+22% Slovakia 6811.1 e1.1+30% Austria 9971.1 e1.0+0.1% Denmark 7121.1 e0.9-0.1% MANUFACTURING EMPLOYMENT & PRODUCTIVITY

14. WAGES & SALARIES MANUFACTURING Comparison: Bulgaria = € 1 K 199720031997-2003 Average Wage Change in Average Wage Bulgaria1.01.0+29% Slovakia1.81.9+46% Austria22.320.5+19% Denmark19.217.4+17% Very large gaps in terms of wages and salaries The gap between wage rates and value added rates is larger in Bulgaria than in the other countries

15. INVESTMENT in TANGIBLE GOODS MANUFACTURING Comparison: Bulgaria = € 1 M 199720031997-2003 Investments in Tangible Goods Change in Investments Bulgaria1.01.0+308% Slovakia5.61.3-0% Austria17.65.5+27% Denmark14.33.5-0% The investments are growing rapidly

16. CERTIFICATESCERTIFICATES ISO 9000:2001 Comparison: 200120042001-2004 Number of ISO 9001:2000 Change in number of ISO 9001:2000 Bulgaria381685+1647 Slovakia1442008+1864 Austria7003839+3139 Denmark361050+1014 The enterprises seem to take care about quality management

17. ISO 14001 Comparison: 200120042001-2004 Number of ISO 14001 Change in number of ISO 14001 Bulgaria626+20 Slovakia73184+111 Austria223549+326 Denmark620711+91 CERTIFICATESCERTIFICATES Not the same situation in the field of environmental care

18. OPERATIONAL PROGRAMME Problems to solve ensuing from the above INNOVATIONS TECHNOLOGY, EQUIPMENT & PRODUCTIVITY ENERGY EFFICIENCY and ENVIRONMENTAL CARE EASIER ACCESS TO FINANCE INVESTMENTS DEVELOPMENT OF THE COMPETITIVENESS OF THE BULGARIAN ECONOMY 2007-2013

19. OPERATIONAL PROGRAMME DEVELOPMENT OF THE COMPETITIVENESS OF THE BULGARIAN ECONOMY 2007-2013 The TOP 3 things that pop-up into a foreigner’s mind when he/she hears

20. Thank you for your attention! www.mee.government.bg Ivaylo GRANCHAROV, Chief Expert, e-mail: i.grancharov@mee.government.bg, Ministry of Economy and Energy; © 2006 Take a look also at the ANNUAL REPORT on the Condition & Development of SMEs in BULGARIA SMEs ALPHABET