What is the current state of economy? What stands does Bulgaria take toward international economic blocs? Do current Slovak -Bulgarian economic relations correspond to the needs of both countries? What should be done to make our goods more marketable on the Bulgarian market? The answers were answered by the head of the trade-economic department at the Embassy of the Slovak Republic in Sophia, Ing. PETER JONÁŠI.

In 1997, a period of several years of political obscurity as to the country's future orientation culminated in the Bulgarian Republic. Moreover, the dissolution of the COMECOM, the evaporation of the Arab markets, and long-lived yugoembargo had a negative impact on the country's weak economy. The country's equivocal political orientation and insufficient dealing with the making of an market environment resulted in large national economic losses and a powerful shadow economy.

In the period 1989-1994, no unequivocal governing force existed in the state. The Bulgarian Socialist Party, which put a lid on then modestly undergoing reforms, swept the 1994 elections. Until half 1995, at the price of running out of state reserves and a growing criminal rate within the economy, the BSS maintained social conciliation. Worsening macroeconomic indicators led in 1996 to a crisis practically of all the economy sectors, which was evident, additionally, in the banking sector. Hyper-inflation (in early 1997 climbing to 3,700 %!), a decline of the still prevailing state-owned sector and a political crisis accompanied with social disorders led to the fall of the BSS government in January 1997 and extraordinary elections in April 1997. The winner was the centre-rightist Association of Democratic Forces.

After assuming office the new government set themselves clear programme targets oriented toward the integration into the European structures and NATO. The fundamental steps in favour of economic stability were made as early as 1997 by signing the Memorandum with the IMF, an amendment to the Act regarding the State Bank and the introduction of the Council. The exchange rate of the national currency BGL was pegged to 1,000 BGL = 1 DEM. A transfer of the emission administration to the Fiscal Council was effected by virtue of the Act on the State Bank The IMF mission regularly checks the performance of those governmental tasks and decisions to which the granting of financial tranches is linked to. Further negotiations with the IMF in the course of 1998 led to the signing an agreement for a programme for a further three years. By accomplishing this program the criteria necessary to start negotiations on joining the EU will be met.

In assessing macroeconomic indicators for the first half of 1998 a gradual stabilization is already in evidence. As opposed to the above hyper-inflation in early 1997, the inflation in the first-half of 1998 already ran between 1.7 and 4.3 %. The privatisation outcomes manifested themselves in a contribution of the private sector to the GDP formation of nearly 63 %. In 1997, the GDP fell 6.9 % but in 1998 it is anticipated to rise 6.3 %. The procedure in liberalising the trade regime is beginning to be evident in the foreign trade balance. By gradually removing the protection of the internal market imports outstripped exports. As compared to the first half of 1997, the same period in 1998 saw imports drop 9.4 % and exports gain 5.2%.

Together with persistent efforts of the government toward an internal political and economic stabilization there are also apparent efforts to engage Bulgaria in international economic life. A permanent member, Bulgaria is actively engaging in the cooperation with a number of blocs. It is a founding state of the Black Sea Economic Cooperation, where it does not advocate the organisation's deeper institutionalisation and is only prefering its economic dimension. Bulgaria has been a CEI member since 1996 and it considers the signature of the Agreement of the Bulgarian Republic to the CEFTA the best success on the way to the European blocs. The Agreement was signed July 17, 1998 in Sophia and went into force on January 1, 1999.

Practically a complete contract basis (except for an agreement on the avoidance of double taxation which is prepared to be signed) entered into between between the Governments of the Slovak and Bulgarian Republics creates a fundamental precondition for good bilateral economic-trade relations between the two countries. Different political and economic developments in boths states in the recent years have had an impact on the mutual trade volume. Despite this a pace of growth is evident in the last years with the Slovak Republic achieving each year an active balance of trade.

The current mutual trade level does not correspond to mutual marketing possibilities, especially the production potential of the Slovak Republic, the pattern of products produced in this country, many of which are still deficient in the Bulgarian market. Many our products can successfully compete through their quality and technical level on the Bulgarian market with those imported.

A lack of interest in doing bussiness on or ceratin distrust in the Bulgarian market can be perceived on the part of many Slovak economic entities. While there are sometimes certain negative factors making it more difficult for our firms to become established, but these can be handled. This is evidenced by a solid number of Slovak firms doing at present very successful business. I can testify through own experience that the Bulgarian market is unequivocally interesting for marketing out products. Promotion, however, should be made more effective by Slovak entities, since necessary information is missing in our offer to Bulgarian entities. An increased interest in the participation in the Plovdiv official spring and autumn trade fair, specialized fairs, exhibitions and other presentations would be welcome. We offer under very advantageous conditions the possibility of holding presentations for individual Slovak firms also on the premises of the Office of the Slovak Republic in Sophia (area code 0035 92, tel. 943 30 66, 943 32 81, fax 943 38 37).

Mutual trade in million Sk

Slovak Trade FORUM