As one of the fastest-growing translation companies, we deal with translations to and from almost every language. We have seen a steady increase in the number of Bulgarian translation jobs over the last couple of years. Bulgaria joined the EU in 2007 and offers a wealth of opportunities for British exporters.
As part of our blog feature, we have compiled research on the last five years in Bulgaria and identified key strategic sectors for exporters.
January 2007: A Time for Optimism
On January 1st 2007 Bulgaria, along with Romania, became the newest member of the European Union. The motivation of the general public and private organizations was very high since the deal meant more opportunities and enormous potential for growth for Bulgaria. With a highly motivated and hard-working population of 7.6 million, the country felt it had a lot to contribute to the EU.
Bulgaria joining the EU also benefited exporters from other EU countries. The country presents excellent conditions for both large companies with strong export backgrounds and new-to-export small and medium enterprises from all across the Union. Bulgaria is economically attractive and also geographically. Not only does its geographical position place it at the strategic crossroads of Europe, the Middle East, Russia, and the former Soviet republics, but it is also easily accessible.
Becoming an EU member immediately introduced new perspectives of modernization and social prosperity for the people of Bulgaria. The country has benefited from financial support from the Union, which helped boost its economic growth and prospects.
However, these have not been without sacrifices. The European Union has its own targets, priorities, regulations, and standards, which had a significant impact on the country’s economic processes. In addition to this, stringent EU regulations mean Bulgaria has had to catch up administratively. A concerted effort has seen the country’s systems and procedures rising to comparatively remarkable levels.
2007-2010: Reality Check
Bulgaria joined the Union at a time of prosperity, but the economic crisis of the next few years left Europe fragile and financially unbalanced. Even though the economic growth during 2006-2007 was steady, there were a number of challenges in the following years in the face of macroeconomic imbalance, higher inflation, rises in real estate prices, and a decrease in GDP of 5.5%.
It was not until the middle of 2010 that Bulgaria started slowly recovering with a gradual 0.2% GDP growth, thanks largely to increased exports. At that time the export levels of other European countries started matching Bulgaria’s, returning to levels seen before the economic crisis. The rapidly shrinking deficit implicated how flexible the Bulgarian economy is. The potential for further economic development is good, and during the years of recession foreign investors continued to find it an attractive market, although growth continued at a slower pace.
Now: Opportunities for Exporters
Bulgaria has already received EU funding of over EUR 12 billion for the period 2007-2013, and expects to continue to receive strong funding into the future. The funding is invested in five main sectors:
1. Transport – development of railway and road infrastructure, improvement in accessibility for passengers and freight, improvement of maritime and inland-waterway navigation. Significant investments in the Bulgarian ports on the Black Sea and the Danube River.
2. Waste management – construction of regional landfills, recycling, and hazardous waste management. Upgrade and extension of water and sewage network, construction and upgrade of wastewater treatment plants. In accordance with EU requirements, over 430 agglomerations will require completion of the reconstruction of the existing sewage network and the extension or construction of wastewater treatment plants.
3. Support for innovation in enterprises – improvement of technology and management in enterprises, improvement of pro-innovation infrastructure, etc. Upgrade and extension of information and communication networks.
4. Renewable energy – technologies, equipment, and expertise for the construction of wind farms, solar installations, and biomass installations.
5. Training and development of human resources – delivery of vocational and life-long learning, business and entrepreneurship training, wider usage of ICT and e-content.
Opportunities will also open up in the area of energy, oil, and gas transit. As part of its EU accession agreement, Bulgaria closed down two units of its nuclear power plants. To replace these resources the government is considering building infrastructures that are more environmentally friendly and will need support from private firms in implementing their plans.
Furthermore, due to its geo-strategic location, Bulgaria is a key transit route for two major gas pipelines currently in the planning stage – the EU-backed Nabucco connecting the Caspian region and Western Europe, and the South Stream project for transit of Russian gas to Italy and South-East Europe.
Role of the UK
The UK is a major importer to Bulgaria, forming a foundation for improvement. In 2008 the value of UK exports to Bulgaria was GBP 228 million and it decreased by an estimated 23% in 2009. The main product groups exported are as below:
The United Kingdom was the number one investor in Bulgaria in 2006 and 2007. Though a large part of it was in the real estate sector, a number of strategic investments in manufacturing and services were also made. In the global economic downturn, the UK is still holding its position among the leading investors in Bulgaria. In 2009, the UK ranked 4th largest investor after the Netherlands, France, and Belgium with over EUR 93 million worth of investment. The major British investors in Bulgaria include the pharmaceutical giants AstraZeneca and GlaxoSmithKline; Melrose Resources (who holds the exploration license for the first offshore gas field in Bulgaria); ESAB (major welding and cutting equipment manufacturer); Tishman Management, Salamanca Capital, and United Utilities.
2012: What does the future hold?
The forecasts show that the GDP will increase by an average of 5% during the period of 2012-2015 and a slight increase of 3% in 2016-2020. On the other hand, the unemployment rate will remain relatively high in the near future, with a gradual long-term decrease.
Currently risks still remain and the insecurity of investing during such an economic climate of post-recession Bulgaria might put foreign companies off. Though, facts show that investors are still holding strong positions and business presence in Bulgaria.
Even though Bulgaria entered the European Union under different terms to the countries that joined in May 2004, the country’s integration has been positive and its potential is enormous. The top four sectors to invest in remain machinery, beverages, fertilizers, and minerals. Investment in Bulgaria’s infrastructure, its industry, and crucially its people will benefit the country in the short term and also for generations to come.
If you’re thinking of investing in Bulgaria, speak to us first. We offer a full-service export translation service that will help you pitch your products the right way and increase your chances of success.
