Abstract
Bulgaria is one of the poorest countries in Europe. The only significant
security threats it faces come from
organised crime, which is pervasive,
and corruption. While Bulgaria has recently been admitted as a
member of
NATO, the country is not strategically significant in any of the regional
tensions or issues. It
does, however, lies on the transshipment route for
drugs coming out of the Central Asia region and the
Caucasus. Bulgaria is
therefore significant in the international drug trade and the associated
crime,
human-trafficking and money laundering operations.
We expect
the Bulgarian economy to be in for a rough ride this year as the private
sector starts to account
for its excessive borrowing and consumption in
previous years, with consumer and investment spending
necessarily set to
take a severe hit. We forecast an economic contraction of 3.1% this year
followed up by
a decline of 1.5% in 2010, as demand remains weighed down
by the lack of external credit availability,
and as the deleveraging
process continues to gain ground.
During the Cold War, Bulgaria was a
member of the Warsaw Pact. It maintained a large, mostly
conscript, army
and had a defence industry that earned several hundred million dollars
annually from
sales to other Warsaw Pact countries. (This was a
significant amount, given the small size of Bulgaria’s
economy). Up
to 90% of military production was exported.
The demands placed on the
military as a NATO member are very different. The current need is for a
much smaller and far more professional force, capable of operating in
peacekeeping and humanitarian
roles. The need to inter-operate with other
NATO forces means that the Ministry of Defence is working to
standardise
and codify its military products to comply with NATO standards. Bulgarian
forces have
worked to improve their compliance with these standards by
recent military acquisitions, such as a pair of
Belgian frigates, and
armoured security vehicles from the USA.
The Bulgarian defence industry
recently stated that Bulgaria is regaining its position in the
international
arms markets. Deputy Economy and Energy Minister Yavor
Koyumdjiev said that last year Bulgaria
exported ‘special
production,’ valued at EUR180mn. ‘The country has retained
positions in its traditional
markets in Northern Africa and Europe, and
has also succeeded in placing products in the USA,’
according to the
Minister.
Aside from concerns over economic growth and standards of
living, we believe that the lack of progress
in eradicating corruption
will remain top of the list of the government' s perceived policy failures.
While
endemic corruption was the central tenet of the report, the
Commission did note encouraging
developments since Bulgaria joined the EU
on January 1 2007. The establishment of a State Agency for
National
Security – charged with fighting corruption and organised crime –
was praised, as was the
appointment of a new deputy prime minister to
oversee the collection and distribution of EU funds.
This quarter, we have
introduced a significant new aspect to BMI' s defence reports, which is the
City
Terrorism Rating (CTR). This assesses the risk of a terrorist attack.
The CTR takes into account the
overall BMI Terrorism Rating for the
country in question. It also incorporates the ' prevalence' of
terrorism,
which recognises the frequency of attacks and whether the city is a target for
terrorists. The
CTR also recognises the ' threat' of terrorism in terms of
the likely numbers of victims and the ability of
groups to launch
sustained campaigns. In Bulgaria we assess the CTR for Sofia as 87.5. While
not as high
as cities such as Riga or Baku, this is substantially higher
than many cities in the Central and Eastern
European and Central Asian
region.
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