Икономически годишник - Стара Загора

Bulgaria sustains its position as one of the countries with high levels of human development. The country ranks 56th with a Human Development Index (HDI) of 0.834. The data is taken from the 2008 report of the United Nations Development Program and compares the levels and the tendencies in 179 countries.    
It can be expected, however, that in 2009 the HDI ranking of countries will change substantially. The economic regression and the financial instability force the biggest international companies to be much more cautious in their direct investment plans until the end of 2010. According to research performed by the United Nations, a great number of these companies state that they will withhold their investment projects for the next three years. Still, over 50% of the companies plan to increase their investments, but at a lower growth rate as compared to 2007 and 2008.   
Most of the big international companies still prefer to invest in their own geographic region. However, the most attractive investment destinations in 2009 are expected to be 5 countries with large territories: China (despite the potential risk arising from the country’s non-market economy), India, USA, the Russian Federation and Brazil. Investors’ interest in South Africa, Canada and Turkey is also increasing.
The reaction of the big investors will have a negative effect on Bulgaria, as the inflow of capital to the country will decrease. The situation will be further aggravated by the fact that foreign partners of Bulgarian companies will cut down or even withhold orders for their products, and 2/3 of these partners come from EU member states. It is more likely however, that Bulgaria’s export will preserve or even increase its volume in 2009 as compared to the previous year.
Bulgarian companies may take advantage of this world tendency in developing strategies for solving their own problems. They can rely on lower competitive stress from some local producers and on more opportunities to find qualified employees discharged by Bulgarian and EU economic sectors that have been strongly affected by the crisis.
In 2008, Bulgaria registered the lowest unemployment rate within the past 10 years. For the Stara Zagora District it was 4.7%, i.e. 1% lower than the unemployment rate in 2007. The tendency for the number of unemployed people in Bulgaria to decrease may stop in 2009.
The global financial and economic crisis forces companies to restructure their resources (financial, manpower, etc.) to more feasible and profitable business activities. Entrepreneurs shall have to ask themselves questions like: What makes my company better than all the rest? What will people pay for in the next two years? Finding the right answers and reacting in a fast and adequate way will enable companies to overcome the negative effects of the economic crisis. And although the impact of the economic crisis varies from company to company, all economic sectors will be seriously affected.
Moreover, companies shall have to introduce tighter control of expenditures. Most employers plan to increase their employees’ salaries in 2009. This, however, will be realised through adoption of clearer criteria for employees’ performance assessment in determining their remuneration. In the evaluation process employers should stress the individual achievements and contribution and the company’s overall results, but factors like loyalty and professional qualification must also be accounted for. The trend of rising salaries will continue also because the income of the average Bulgarian citizen is 1/3 of the income earned by the average European.   
In 2009, the global crisis will have a direct impact on companies in the Stara Zagora District causing an increase in interest rates on bank credits and reduction or loss of foreign markets for their products. In other manufacturing industries, however, the crisis may result in cheaper resources, as well as in opportunities for new business relations.  
In a year of crisis, Bulgaria has some advantages as compared to other countries that entrepreneurs can benefit from. A devaluation of the Euro versus the United States Dollar is expected in 2009, but this process will be controlled by the European Central Bank as well. Intervention of European bank systems in the financial markets will directly benefit the Bulgarian economy, which operates under a Currency Board. The inflation rate in 2009 is expected to be much lower than that in the previous year and the lower inflation level will lead to increased consumption in the country. Forecasts for 6% annual inflation are not quite surprising, but the 2009 inflation rate in Bulgaria will again be directly related to the price of fuels on the world markets.
In this context, a considerably higher growth (4.7%) of Bulgaria’s GDP is envisioned for 2009. The expected economic growth for the EU members states as a whole is 0.2% compared to 1.4% for 2008 and 3% for 2007.
As for the banking system in Bulgaria, the crisis came just in time to serve as a motif for Bulgarian banks to keep their conservative behavior on the market. Moreover, the total amount of their capital does not exceed the Gross Domestic Product of the country.
The crisis should also impose adoption of more rational and straightforward rules for the utilisation of the EU Operational Programs funds. Bulgarian business may consider this fresh financial resource and try to find optimum ways to utilise it for the implementation of its own projects. Businessmen could avail themselves of the services offered by Chamber of Commerce and Industry – Stara Zagora, whose experts provide consultations and assistance in the development and preparation of project proposals, and their consequent implementation.
In 2009, the business sector in the Stara Zagora region could also rely on infrastructure projects funded by the state budget and by EU funds (e.g. construction of sections of Trakia highway and others). Investments in Maritsa East complex continue as well.
Sustained development of the local companies depends on their response to the crisis and on the use of innovations which would distinguish them from their competitors. The biggest business oriented network in the world, Enterprise Europe Network, has a centre in Stara Zagora which can offer local companies information and instruments in support of their business activities.
The companies have to review their pricing policies as well. Business relations with partners should be optimised and customers’ payment periods should be shortened. At the same time, every single supplier and client will matter and his/her financial difficulties could affect other related companies.   
It is quite natural in a year of crisis to rely on significant intervention from the state. Business, however, should not count on that in any way. Moreover, that there will be general elections in Bulgaria in mid-2009, which would delay the response of the state authorities for months.