Foreign Direct Investment In Post-Totalitarian Bulgaria
Nikolay Gertchev *
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The purpose of this note is to examine the evolution of Foreign Direct Investment (FDI) in the Bulgarian economy since the dismantlement of the totalitarian communist State. With the recognition and protection of private property that one could expect to result from this change of political regime, investments from abroad should have quickly become a reality. The fact, however, is that FDIs in Bulgaria began to expand only in the late 1990s, i.e. almost a decade after the disappearance of the totalitarian State. On the other hand, their progression has been remarkable since they began to grow. The average FDI flows for the period 1997-2004 amounted for 42 % of the gross fixed capital formation, which is by far the highest ratio of the whole CEE region (UNCTAD 2006a, 2006b). The following two tables illustrate this recent tendency and provide some additional information as to the allocation and origin of FDIs.
Table
1. FDI in Bulgaria by host industry (stocks in million euros)
|
Industry
|
1999
|
2000
|
2001
|
2002
|
2003
|
2004*
|
2005*
|
|
Total
|
2173,8
|
2900,9
|
3323,6
|
3902,3
|
4946,2
|
6768,7
|
8530,7
|
|
Transport, storage and communication
|
261,8
|
215,4
|
264,3
|
469,0
|
569,7
|
1207,5
|
2229,3
|
|
Manufacturing
|
1049,7
|
1227,4
|
1454,7
|
1481,9
|
1754,0
|
1900,2
|
1747,0
|
|
Financial intermediation
|
212,6
|
530,6
|
508,1
|
662,2
|
925,5
|
1351,6
|
1744,0
|
|
Wholesale and retail trade; repair of motor
vehicles, motorcycles and personal and household goods
|
216,1
|
435,0
|
582,9
|
633,6
|
871,5
|
1203,8
|
1093,2
|
|
Real estate, renting and business activities
|
104,8
|
202,4
|
196,5
|
251,1
|
416,2
|
531,4
|
769,5
|
|
Construction
|
41,8
|
78,7
|
82,9
|
104,3
|
75,9
|
164,2
|
279,3
|
|
Non-classified
|
46,0
|
26,1
|
26,4
|
2,6
|
26,5
|
83,4
|
271,0
|
|
Hotels and restaurants
|
32,1
|
57,3
|
62,6
|
78,2
|
84,9
|
108,3
|
141,7
|
|
Mining and quarrying
|
29,5
|
25,4
|
33,3
|
27,6
|
51,3
|
65,7
|
91,2
|
|
Other community, social and personal service
activities
|
9,5
|
16,3
|
22,6
|
39,4
|
55,1
|
54,0
|
66,8
|
|
Electricity, gas and water supply
|
162,4
|
67,7
|
71,0
|
133,5
|
73,7
|
47,3
|
64,6
|
|
Agriculture, hunting and forestry
|
5,3
|
16,6
|
16,6
|
17,2
|
40,7
|
46,3
|
29,5
|
|
Fishing
|
0,7
|
1,0
|
0,2
|
0,3
|
0,3
|
2,9
|
3,0
|
|
Education
|
0,2
|
0,3
|
0,8
|
0,5
|
0,2
|
0,7
|
0,7
|
|
Health and social work
|
1,4
|
0,7
|
0,7
|
0,9
|
0,7
|
1,5
|
-0,1
|
* 2004 data are
revised as of April 4, 2005. Preliminary 2005 data. Source: BNB (2006b).
Table
2. Top 20 FDIs in Bulgaria by their nationality (stocks in million euros)
|
Country
|
1999
|
2000
|
2001
|
2002
|
2003
|
2004*
|
2005*
|
|
Total
|
2173,8
|
2900,9
|
3323,6
|
3902,3
|
4946,2
|
6768,7
|
8530,7
|
|
Austria
|
122,2
|
203,8
|
297,7
|
579,5
|
671,1
|
1235,1
|
2415,6
|
|
Greece
|
95,7
|
233,4
|
273,4
|
472,4
|
532,6
|
635,3
|
863,7
|
|
Cyprus
|
209,1
|
290,9
|
289,7
|
357,6
|
433,5
|
473,3
|
529,9
|
|
Germany
|
419,4
|
353,8
|
326,0
|
438,0
|
428,9
|
520,5
|
522,0
|
|
Italy
|
37,2
|
314,7
|
308,0
|
329,4
|
412,4
|
482,3
|
515,9
|
|
USA
|
260,0
|
281,2
|
320,4
|
332,4
|
363,0
|
451,2
|
496,3
|
|
Belgium and Luxembourg
|
135,1
|
149,4
|
292,2
|
220,3
|
250,9
|
460,0
|
457,1
|
|
Netherlands
|
79,9
|
205,4
|
315,1
|
176,3
|
466,5
|
625,8
|
415,1
|
|
Great Britain
|
239,2
|
220,4
|
238,5
|
225,7
|
292,6
|
344,1
|
379,4
|
|
Hungary
|
8,2
|
6,4
|
8,9
|
18,3
|
178,1
|
250,6
|
343,6
|
|
France
|
59,7
|
101,6
|
114,9
|
134,5
|
135,7
|
185,4
|
184,4
|
|
British Virgin Islands
|
-0,9
|
21,7
|
25,6
|
94,3
|
62,6
|
125,1
|
181,1
|
|
Switzerland
|
76,6
|
95,3
|
103,1
|
107,5
|
194,4
|
298,1
|
135,4
|
|
Turkey
|
41,4
|
57,7
|
49,6
|
91,4
|
71,7
|
98,0
|
114,4
|
|
Ireland
|
4,9
|
11,9
|
3,7
|
1,0
|
2,4
|
18,6
|
94,1
|
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Denmark
|
1,3
|
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