1. COMPETITIVENESS OF BULGARIA COMPETITIVENESS OF BULGARIA Kamen Kolev, PhD Kamen Kolev, PhD THE EUROPEAN DAY OF THE ENTREPRENEUR Bulgarian Industrial Associationwww.bia-bg.com

2. GDP growth, % Bulgarian Industrial Associationwww.bia-bg.com

3. Basic economic indicators Six consecutive years Bulgaria has positive growth of the GDP Bulgaria received the investment credit rating in foreign and local currency Open economy – well integrated in global economy Employment rate is 52.5% or 10% lower than the average for EU (62.5%) Bulgarian Industrial Associationwww.bia-bg.com

4. Top 10 biggest Bulgarian partners in foreign trade Bulgarian Industrial Associationwww.bia-bg.com

5. Priority product groups (USD mln) Bulgarian Industrial Associationwww.bia-bg.com

6. Short and Long-Term Bank Loans (incl. for households) Bulgarian Industrial Associationwww.bia-bg.com Mln. BGN

7. Unemployment rate, % Bulgarian Industrial Associationwww.bia-bg.com 20002001 2002 2003 18.0017.88 16.27 11.9 17.5 13.52 08.2004

8. Short-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 Bulgarian Industrial Associationwww.bia-bg.com

9. Bulgaria – Sources of Competitiveness Natural 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 Bulgarian Industrial Associationwww.bia-bg.com

10. Mining industry Growth of world trade Agriculture, hunting and forestry Bulgaria, export growth Energy and fuels Building Transport, storage and communications Trade and repair Processingindustry Finances and business services FDI in Bulgaria by sectors (USD mln) Export growth by sectors (%) Possibilities for strategic alliances (1998 – 2003)

11. Shortcomings 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 Bulgarian Industrial Associationwww.bia-bg.com

12. Median age of the population Bulgarian Industrial Associationwww.bia-bg.com

13. Population under, in and over working age Bulgarian Industrial Associationwww.bia-bg.com

14. Companies certified under ISO 9000 per 1 mln.inh. Bulgarian Industrial Associationwww.bia-bg.com Country19981999200020012002 Austria406428478500512 Belgium307338364452457 Germany293368396508437 Ireland751816876974749 Italy3143665278351063 Slovenia250259419510484 Hungary166328467636925 Czech Republic 141147378552832 Bulgaria1224325776 Romania12214674110 Turkey2526364661 Croatia27456792131

15. What is necessary? To achieve long-term competitiveness, based on knowledge Adoption and execution of action plan according to the Lisbon Strategy 2000 Facilitation of the business environment Reduction of criminal factors Attraction of private investments, incl. Public private partnerships Bulgarian Industrial Associationwww.bia-bg.com

16. BIA 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 Bulgarian Industrial Associationwww.bia-bg.com

17. Competitiveness index for the period 2001 - 2003 Bulgarian Industrial Associationwww.bia-bg.com

18. BIA 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 competitiveness Bulgarian Industrial Associationwww.bia-bg.com The Year 2003 characteristics

19. Bulgarian Industrial Associationwww.bia-bg.com GDP Growth - 2nd Q 2004 GDP Growth - 2nd Q 2004 - 1st H 2004 - 1st H 20046,0%5.6% Gross Fixed Capital Formation Gross Fixed Capital Formation - 2nd Q 2004 - 1st H 2004 - 2nd Q 2004 - 1st H 200421,6%20,2% Industrial Production Industrial Production Industrial Sales (June 2004, y-o-y) Industrial Sales (June 2004, y-o-y)21,5%26,4% Interbank Money Market average daily volumes in BGN Interbank Money Market average daily volumes in BGN 120 mln. Foreign investments (1 st H 2004) Foreign investments (1 st H 2004) 1199 mln. $ Public Sector External Debt ( % GDP ) Public Sector External Debt ( % GDP ) 37.8 % RECENT DEVELOPMENT TRENDS

20. COMPETITIVENESS OF BULGARIA COMPETITIVENESS OF BULGARIA Kamen Kolev, PhD Kamen Kolev, PhD THE EUROPEAN DAY OF THE ENTREPRENEUR Bulgarian Industrial Associationwww.bia-bg.com