Bulgaria: Business environment at a glance
September 25, 2006
Bulgaria: Business environment at a glance. Check it out:(EIU Viewswire Via Thomson Dialog NewsEdge) COUNTRY VIEW
FROM THE ECONOMIST INTELLIGENCE UNIT
Policy towards private enterprise and competition
2007-08: Industrial sector and utility privatisation proceeds slowly, but is almost complete by 2008; there is more stringent enforcement of intellectual property law and reduced bureaucratic interference.
2009-11: Utility prices increase to Western levels. The EU plays a significant role in competition policy.
Policy towards foreign investment
2007-08: The government is active in attracting foreign investors; greenfield and infrastructure investments increase.
2009-11: There are further attempts to attract foreign investment, but financial incentives are restricted by the EU.
Foreign trade and exchange controls
2007-08: Trade policy becomes the EU's responsibility. Controls on agricultural trade with the EU are removed.
2009-11: The lev is replaced by the euro when Bulgaria joins European economic and monetary union (EMU).
Taxes
2007-08: Overhaul of customs and revenue collection; higher excise duties; limited cuts in social security contributions; shift towards employee contributions to finance healthcare and social security.
2009-11: Further improvements in tax collection as modernisation continues. There is a gradual increase in the funded element of the pension system.
Financing
2007-08: Corporate and household lending expands rapidly. Access to bank finance improves.
2009-11: There are further efficiency gains from foreign involvement and a gradual increase in non-bank finance.
The labour market
2007-08: Labour costs are low, but rising. Fiscal incentives help to create jobs in areas with high unemployment.
2009-11: Labour costs rise considerably in US dollar terms, but are still low by regional standards. Difficulties in finding highly educated staff lead to greater wage dispersion, reducing incentives for university graduates to move abroad.
Infrastructure
2007-08: Moves towards market mechanisms in energy. The telecommunications sector is liberalised, ports are modernised and power plants upgraded. There is some motorway construction. The railways are rationalised.
2009-11: Further roadbuilding; a second Danube bridge is completed and construction of a new nuclear-power plant to replace the closed reactors at Kozlodui gets under way.
Copyright 2006 Economist Intelligence Unit
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