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With the cooperation of the Center for the Study of Democracy Bulgaria was included for a fourth time in the most prestigious annual competitiveness ranking – IMD World Competitiveness Yearbook 2009.

This year Bulgaria is ranked 38th - one place higher than 2008, outperforming countries such as Spain, Brazil, Hungary, Turkey, Russia, Italy, Romania, Greece, Croatia and Ukraine.

Bulgaria is rated highest for economy efficiency (after dropping from 31st place in 2007 to 38th in 2008, in 2009 it goes up to 26th place). The government efficiency is ranked next (it takes 28th place compared to 38th place in 2007 and 29th in 2008). The only noticeable downturn is in the area of infrastructure – Bulgaria is rated 43rd among the 57 competing economies (two places lower than last year). Business efficiency, however, is assessed lower than the other three indicators, rating 47th. Nevertheless, it has improved compared to 54th last year. It should be noted that business efficiency is considered a crossing point of the other three groups of indicators and it indicates the ability of the economy to make a systematic transition towards higher competitiveness.

The fact that Bulgaria went up in the overall competitiveness ranking - from 41st in 2006 to 38th in 2009 is undoubtedly a positive sign to the international investor community in terms of the possibilities which the Bulgarian economy offers in comparison to the other countries in the region. The global econmic crisis and inherited disadvantages however, present some major obstacles to the competitive development of the Bulgarian economy, especially as far as access to capital, corporate debt, loss of international markets and shrinking of the internal market are concerned. The same can be said also for the traditionally unappealing international image of Bulgaria, inneficient law enforcement system, lack of fair competition and corruption, qualified labor force and personnel with managerial skills, slow development of innovation, technology and science.

Among the most significant barriers to the development of the Bulgarian economy in the long run are the low efficiency of the institutions and government policies regarding infrastructure (healthcare, education, environment, and scientific infrastructure), the poor cooperation and coordination between state institutions and the low appeal of the country to skilled foreign experts. Under the pressure of the global economic recession, the increase of prices, incomes and remunerations will decelerate or might even reverse. CSD experts expect that if the current trends do not change, the crisis will hit bottom in Bulgaria during the second and third quarters of 2009.

In order for Bulgaria to overcome the crisis, the government policy should shift its focus from financing of large-scale projects and enterprises towards support of SMEs and new start-ups. It should also focus on increasing the investments in R&D, ICT infrastructure and supporting innovative new niche productions of Bulgarian companies.

Press-conference: Bulgaria’s International Competitiveness 2009, 19 May 2009

Media Coverage (in Bulgarian)

The IMD World Competitiveness Yearbook 2009 assesses Bulgaria’s competitiveness in comparison to the 57 leading country and regional economies.

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