The Estat index provides a summary estimate of the country's business environment by the representatives of more than 400 companies interviewed. Unfair competition in Bulgaria also hinders business development in the country, according to 80 percent of respondents.
ECONOMIC DYNAMICS
Fluctuations in the price dynamics of imported crude oil in Bulgaria explain the increase in gasoline prices for motor vehicles by 5.4 percent compared to the beginning of the year. At the beginning of the second quarter, construction entrepreneurs expect an increase in employment in the sector.
FISCAL REVIEW
According to the data of the Ministry of Finance, at the end of 2001, USD 220.3 million of bonds in euros were included in the external debt structure. This applies both to the increase in the total internal debt s.
PRIVATIZATION
With the implementation of APPK, the state's share in the capital of all commercial companies, with the exception of those listed in the annex of the act, is considered declared for privatization. According to AP6 1979 data, companies that were to be transferred from other ministries to the source of the agency have been declared for privatization. On the other hand, this change will speed up privatization procedures and shorten the period of complete withdrawal of state ownership from privatized companies.
The limitation by which creditors are given six months after the start of the privatization procedure for a company to claim their debtors (pursuant to paragraph 6a of the Transitory and Final Act of the repealed TPSMEA) is eliminated. The Council of Ministers must adopt the regulations on its application within two months of the entry into force of the new law.
SMALL AND MEDIUM-SIZED ENTERPRISES
ASME's practice of producing an annual report on its work at the end of each year and an action plan for the following year has been disrupted - the 2001 report and 2002 plan have not yet been released. The export of products from the group of raw materials and raw materials decreased by 8.7 percent in the first three months. In these circumstances, the country's specialization in the export of consumer goods, which shows an 8.6% growth compared to the general decline, becomes the most urgent.
The negative trade balance trend continues (USD 372.2 million for the first three months of 2002), with an increase of almost 21.5 million (6.1 percent) compared to the same period of the previous year. The downward trend continued in early 2002, with foreign direct investment in the first quarter amounting to only USD 46.8 million, or 16.7 percent of investment for the same period of 2001 (USD 279.5 million).
ENERGY
Yet only two of the seven electricity distribution companies published their concepts and only one (Sofia Electricity Distribution Company) organized a public discussion. The period is not characterized by significant progress in the privatization of energy companies, despite the declarations for rapid privatization in the government programme. There was no progress on the expected large-scale investments in the Bulgarian energy sector by AES, Entergy and Rheinbraun.
Higher oil prices have increased production costs for the Bulgarian refineries, which buy crude oil at conditions that follow the international market situation. An increase of 10 per cent. of the prices of electricity and heat for households came into force from the beginning of the period.
TRANSPORT
38 The new Railway Transport Law where infrastructure and transport are divided into two independent state-owned companies entered into force on January 1, 2002. The success of this more serious step in the restructuring of the transport sector is at risk because it was not accompanied by measures to improve of productivity, the attraction of new loads and the real optimization of functional relations between transporters and infrastructure operators. Failure to implement measures to eliminate these negative aspects will intensify the financial difficulties of the state railway carrier.
These problems will be further exasperated if private companies start their railcar operations, depriving the state-owned carrier of some of its profitable activities such as service by major freight carriers and passenger transport destinations between major cities.
HIGH TECHNOLOGY AND COMMUNICATIONS
Its basic objective is to coordinate the efforts of donors, companies and the Government for more efficient use of information, communication and management technology in the public administration and the economy. The Government decided to negotiate a contract for 30,000 packages of Microsoft software in the Bulgarian language – Microsoft Office and Microsoft Windows Professional. The privatization strategy for BTC includes a mechanism of balanced government intervention in the management of the company through the so-called "golden share".
The year can be characterized as a turning point in the development of the Bulgarian telecommunications sector. The mobile service market is fast approaching the saturation point, which limits the profit opportunities and, accordingly, lowers the market price of the third GSM license offered in the BTC privatization strategy.
TOURISM
The executive agency's proposal was finally abandoned at the second reading of the law on tourism in the Parliament in early May. Some major obstacles to the development of tourism became apparent already in the first quarter of the year. Travel organizers formulated proposals to regulate the visa issue at the beginning of the year: no visas for Russian, Ukrainian and Belarusian tourists in the period from June 1 to October 10; several consular services on the territory of Russia; or a compromise option - legalization of visas at the Bulgarian border.
In the first quarter of the year, tourist business representatives participated in international tourist exchanges in Germany (the world's largest tourist fair), Russia, etc. According to some forecasts presented in the first quarter of the year, a 10 to 15 percent the number of German tourists in Bulgaria can be expected in the summer.
AGRICULTURE
The share of the agricultural sector in GDP and GVA remains relatively high, although it follows a trend of constant reduction. In March 2002, the number of people employed in agriculture was estimated at 231,600, which is 8.7 percent of the working population in the country. Regardless of the high rate of unemployment in rural areas (23.8 percent), no increase in this share is expected.
The results of the BANSIC surveys, carried out by the Department of Agricultural Statistics at the MKG, give reasons to believe that the area of fields planted with annual crops has decreased by more than 4 percent (including all areas planted with annual crops, artificial lawns, powder). land and family orchards and vegetable gardens). The area of one-year crops decreased the most in corn, oats, sunflower seeds and wheat.
CAPITAL MARKET
The Board of Directors of the Bulgarian Stock Exchange – Sofia AD adopted a resolution at the end of March according to which placing, changing and removing orders (with the exception of the primary and privatization market) is allowed until 4 p.m. Therefore, pessimism arises not only from the objective state of the capital market, but also from the assessment of government policy itself. Some of the deadlines and commitments under the published new government program for the development and stimulation of the capital market in Bulgaria have already been violated.
The changes are aimed at improving the regulation, strengthening the powers of the State Securities Commission and developing corporate management. This was another example of the need for a significant improvement of regulatory practice and corporate management practice within companies.
BANKING SYSTEM
Through various privatization channels, the opening of representative offices, branches and newly established banks, foreign participation in the banking system in Bulgaria began to dominate, both in terms of equity control and assets under management. The last two large state-owned banks are expected to be privatized in the coming months of this year, and attention will once again be directed to large foreign investors. Regarding the regulatory framework, the following changes have been prepared or adopted in the last few months.
According to the proponent, this proposal is in the light of the policy of liberalization of the banking sector, which removes unnecessary restrictions on the performance of banking activities. This proposal was justified by the need to strengthen banking supervision, ensure transparency of the ownership structure and compliance with international regulatory standards.
SOCIAL POLICY AND INDUSTRIAL RELATIONS
The number of unemployed in the first quarter hovered around 680,000, which is an unemployment rate of about 18 percent. The government's revenue policy in the first three months of the year follows the trends of recent years, supported by the requirements for maintaining fiscal stability. In the first three months of the year, there were attempts to continue the tradition of fruitful tripartite cooperation, typical in previous years.
In the first three months of the year, there were manifestations of active social discontent in the form of trade union protests (at the national level and in some sectors and companies), which were prepared and organized by CITUB. 56 months does not provide a basis for predicting a peaceful summer for the government in terms of socio-economic conditions.
ENVIRONMENTAL POLICY
The categories of industrial activities, subject to compulsory permits in connection with the application of the directive, have already been specified. Business logic and the requirements of the world markets, and mostly the European markets, determine the interest of Bulgarian business in the "introduction of the good practices" and the international standards regarding the environment. Assarel-Medet was one of the first Bulgarian companies to obtain a certificate of the Environmental Management Standard EN ISO 14001 at the beginning of the year.
The latter establishes corporate standards and procedures for systematic management of the environment in the company's region. However, the application of sustainable development principles in sector-specific policies requires a certain level of knowledge, skills and trained personnel.
NEGOTIATIONS FOR ACCESSION WITH THE EUROPEAN UNION
The action plan prescribes a reduction of the terms, when commitments are entered into during the negotiations with the EU, to seek solutions to the cases which are as complete as possible and mutually acceptable both to Bulgaria and to the European Commission. In February, the government also approved Bulgaria's position on the debate on the future of the EU. 63 The conclusions of the report on Bulgaria's progress in 2001 are the basis for the composition of the European integration policy.
The significant progress achieved in the course of the negotiations gives the Bulgarian government grounds to insist on setting a deadline for Bulgaria's accession to the EU. In this sense, against the background of the good results of the negotiations, it can be expected that the European Council in Copenhagen in December 2002 will specify the time frame for Bulgaria's accession.
OTHER COMPONENTS OF THE BUSINESS ENVIRONMENT
The positive effect of this will be easing of the licensing, permissions and registration regimes. In the first half of April, a meeting of the interdepartmental working group was held, which discussed the proposals for changes in the registration regimes. The objective is in the future a mechanism for the introduction of a public register of regimes to be prepared, which will lead to a significant simplification of the procedures and the reduction of the opportunities for corruption.
Corruption remains a problem, regardless of the fact that there have been some positive changes in the assessment of its prevalence. At the same time, the effects of most of the measures described above will appear in the future and are likely to be multifaceted.
BASIC INDICES FOR THE QUARTER OF THE YEAR
Calculation of an integrated index
The state of the business climate is assessed according to the following scale, similar to that used in the German Ifo Business Climate Index:.
