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How
Bulgaria Performs in the line with Copenhagen Criteria?
Our
assessment is basically the following:
a) Functioning
market economy: The progress is the following:
- The
credit to private sector to GDP ratio had risen by 1/6 from
11 to 13% of GDP;
- Credit
to the public sector has declined, which contributed to
the overall (domestic) credit to GDP ratio decline in 2000
by 0.7%;
- The
lower threshold for credit by the end of the first quarter
had fallen from roughly BGN 40,000 to BGN 15-16,000;
- Use
of credit cards in the first quarter of this year doubled
the amount of last year (from roughly 1,200 to 3,000), in
the debit cards usage the grew three time (from roughly
250,000 to 600,000);
- The
average creditors right enforcement deadline, measured by
foreclosure deadlines, improved from 24 months to 18 months
(on annual basis); by the first quarter of 2002 it would
reach the average for the candidate countries of 8-9 months
due to provisional amendments to the Civil Procedures Code
(drafted but not yet adopted);
- Bulgaria
has been resilient to oil and energy resources price shocks:
for the period of 1997-2000 the share of imports of those
resources had fallen from 10% of GDP in 1994-1996 to 5%
(suggesting better energy efficiency and more value added
in the output); - Corruption perception index improved to
the level of equality with Croatia and Czech Republic, with
some advantage towards those countries in the links of the
domestic banking sector with foreign players, protectionism
treatments and in terms in terms of regulated prices.
b) Competitive
pressures (the methodology is not well fixed):
- Bulgaria
did not suffer from the EURO depreciation against US dollar,
which is an evidence of "a" and a sign of normality; - Export
increased (most significantly in more value added sectors
producing consumer goods), converting a down trend since
1996 and the deficit shrieked twice);
- Bulgarian
share in EU markets remained roughly flat (with a slow decline)
to the extend it is visible from scares measurements), the
major improvement was to CEFTA and Balkan markets; however,
some traditional Bulgarian exports shrieked (notably, wines
and tobacco);
- There
are factors that would support competitiveness, namely:
1. FDI ( 2000 - a record year with a good prospect to sustain
this phenomenon in 2002 and 2003) with a better structure
than ever (more than 60% green field); 2. Better structure
of the investment (both domestic and foreign), i.e. into
sectors with more value added. E.g. FDI in software and
electronics scheduled (signed) for 2001 there is five-six
times increase, with a tendency these investment to reach
the unprecedented level of 6-8% of total FDI.
- Foreign
retail chains performed well in Bulgaria and excised pressure
to innovate and reduce cost but with no significant political
impacts and for consumer benefit.
In brief,
the impression is that "a" is there, on "b" - the development
is in the right direction.
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