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Welcome to the Future: Bulgaria's Industrial Zones - and Why China Is Interested in Them

1 min read Source: Novinite

From our news archive: this article was published in November 2010. Figures and rules may have changed since.

In June 2010, the Bulgarian government broke the news that it formally invited Chinese authorities and companies to set up and manage a joint industrial zone in Bozhurishte, right outside of Sofia, a development that can well be seen as revolutionary.

The first ever industrial factory in the Ottoman Empire, a state spanning some 18 million square km, was opened in 1833 in Sliven by the Bulgarian entrepreneur Dobri Zhelyazkov. Yet, in spite of that and other industrial sparks in Bulgaria, especially after its National Liberation in 1878, up until the 1950s, it remained a primarily agrarian society with little heavy industry. (In 1891, when the international proletarian movement set foot in Bulgaria, the country had only 3 000 industrial workers in total.)

The Bulgarian heavy industry created by the communist regime (1944/48-1989), which was grossly inefficient and tied with the Soviet and COMECON economies, was largely wiped out in the 1990s by mismanagement, low competitiveness, loss of markets, suspicious privatization deals, lack of investment, to name but a few.

As the worst passed (the Bulgarian crisis of the mid and late 1990s), and Bulgaria has already been integrated to a certain extent with the EU, the authorities and private companies today stand a fair chance of taking advantage of the processes of the global economy by attracting greater FDI. The so called industrial zones – designed to fit both outsourcing and expansion of multinational corporations – appear to be a very attractive way to do that.

These prospects don't seem to have been hurt substantially by the global economic crisis of 2008-2009 – as the global quest for cost-effective labor and production continues – and as the People's Republic of China, the world's primary outsourcing destination of the past decades, is on the verge of becoming a global "outsourcer" itself.

What is more, over the past couple of years, the governments of both Borisov and Stanishev in Bulgaria started to recognize and emphasize the need to create a real export-oriented economy and to generate export-driven economic growth.

Originally published by Novinite.