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Bulgaria – the Silicon Valley of the EU?

The well-functioning economy can make the young Bulgarians return to their home country

Photo: bg.m.wikipedia.org

The Bulgarian government undertakes to “clean” the image of this country, which is presented as the poorest and most corrupt member state of the EU. The measures include programmes aimed at assisting businesses, attracting investments, creating a favorable economic and investment environment.

The growth of the Bulgarian economy has been steady and balanced in the recent years. However, we still have to catch up with the other countries in terms of incomes, this country’s Minister of Economy Emil Karanikolov said in an interview for Radio Bulgaria.

According to unofficial data, nearly 3 million Bulgarian citizens left their home country in the past 30 years. Economic migration increased sharply, especially after 2007 when Bulgaria became a member of the EU. Now, the Bulgarian cabinet is discussing measures to attract the Bulgarian citizens back to their country. Radio Bulgaria already informed that in the beginning of 2020 the state authorities will be ready to finance Bulgarian citizens who decide to return to their home country with up to EUR 600 a month. Is this process possible?

Our task is to create an economic model that will bring people back to Bulgaria. It is functioning slowly, but we have already witnessed positive results, Minister Karanikolov contends. For example, Bulgarians working in the IT sector have been returning to Bulgaria. Moreover, some foreign nationals come to this country to work in this field, Emil Karanikolov notes.

The well-functioning economy can disprove the statistics that present this country as the poorest in the European Union and the EU member state with lowest salaries, Minister Karanikolov contends:

This is the only way, because the administrative increase of salaries will lead to put us in a situation where wage growth will outstrip labor productivity. We should not allow this to happen. The economy should boost the increase of the salaries. In the past two to three years, the salaries have seen 8%-10% increase on an annual basis. Bulgaria places second in the EU after Romania in terms of wage increase. If you ask me why things in Romania look better, I would answer that the internal market in this country is three times bigger than our market. Some investors like Bulgaria, but they prefer to invest in that country, because the Romanian market consists of 18-20 million consumers.

Unemployment in Bulgaria is under 4%, but most people employed in this country think that their wages are not decent. According to data of the Bulgarian Ministry of Labor and Social Policy based on career forums in EU countries with large Bulgarian communities, 70% of the Bulgarians who live, study and work abroad say they would consider returning to their home country if the conditions are favorable. How we can make these young and well-educated people buy a single ticket to Bulgaria?

The young people should see good economic perspectives, in order to come back. Investment in education is very important to me. The more educated people, the better salaries they will receive. Bulgaria is an EU member and the EU market is huge. Until fifteen years ago, Bulgarian engineers with two university specialties could not find a job easily. We must create a competitive environment and the salaries should go up. I believe that Bulgaria is a wonderful place to live in, as long as people have the necessary conditions.

The Executive Director of Invest Bulgaria Agency Stamen Yanev supports Emil Karanikolov’s statement that Bulgaria is a wonderful place to live and adds that Bulgaria is also a good destination for investment:

Bulgaria is a country with good political and economic stability. It is among the three EU countries with the lowest GDP/internal debt ratio. We can generate substantial financial stability which helps this country attract foreign investors. There are many talented people in Bulgaria who would be good and loyal employees of the big companies if they receive decent wages.

How is Bulgaria able to keep its talented people?

It is important for the young people to face challenges in their job where they can develop and meanwhile have opportunity to access different cultures and know how. The Bulgarian government has been working in the recent years towards improving the business environment and invest more in education.

Here is what Stamen Yanev said with regard to the most-promising sectors in the Bulgarian economy:

Several sectors have been developing very well in Bulgaria- the machine building, the automotive industry and the IT sector. The IT registers 25% to 30% annual growth which is not typical of the other EU countries.We believe that thee good digital infrastructure, the quick access to Internet and the 5g network give us reason to claim serious place in the high-tech field and become the Silicon Valley of the EU. Bulgaria can use its geostrategic position between Europe and Asia and manufacture an intellectual product which can be sold on the global markets.

Bulgaria has one of the world’s best IT talents. It is relatively easy to register a new company in this country and the costs are lower than in other countries. According to data of the National Statistical Institute, the IT and the telecommunications are the two sectors with the highest average salaries – EUR 1,500 which is twice higher that the average monthly salary in Bulgaria (EUR 600).

English version: Kostadin Atanasov

Photos: library