Bulgaria Country Brief
Bilateral Relations
Australia's relations with Bulgaria are sound and constructive, though commercial and official contacts remain modest. This is reflected in the small volume of two way trade, the small size of the Bulgarian community in Australia, and Bulgaria's policy focus on integration with the European Union (EU) and other political, security and economic structures of Western Europe.
Some 12,000 people of Bulgarian origin are settled in Australia, mainly as a result of migration during the inter-war period. The Australian community in Bulgaria is very small, comprising mainly dual nationals and a very few expatriate business people.
Australia established diplomatic relations with Bulgaria in 1972 and maintains relations through the non-resident accreditation of the Ambassador in Athens and an Honorary Consul in Sofia. Bulgaria is represented in Australia by an Embassy in Canberra.
The main focus of Australian government business in Bulgaria is the provision of consular services to Australian nationals and support for Australian businesses seeking to develop market opportunities as the economy undergoes reforms from Bulgaria's accession to the EU in January 2007. Austrade services to Bulgaria are provided through the Austrade office based in Bucharest, Romania.
Other areas of shared interest with Australia include cooperation in the campaign against terrorism, WMD proliferation and the problem of illegal people movement, international trafficking in drugs and other forms of transnational crime. Bulgaria has a contingent of around 150 personnel on a humanitarian mission to guard a refugee camp north east of Baghdad.
Trade
Two way trade in 2006-07 was worth about A$49 million (a decrease of 44 per cent from 2005-06), comprising $23 million in exports (a drop of 26.4% from 2005-06) and $26 million in imports (an increase of 108% from 2005-06). Australia’s trade in services is negligible.
Australia's exports to Bulgaria are dominated by two products, wool and coking coal, which are sold as raw materials into the textiles, iron and steel industries. These industries have expanded in Bulgaria over recent years. Growth is expected to continue both for steel and textile products due to increased demand in the Bulgarian domestic market and in other markets now supplied from Bulgaria coupled with strong domestic construction activity. More recently Australia has developed a modest but increasing presence in the Bulgarian mining industry.
High Level Visits
In October 2007, the Bulgarian Deputy Foreign Minister visited Australia for ad-hoc high level talks. In July 2004, an Australian parliamentary delegation visited Bulgaria for discussions covering a range of bilateral and multilateral issues, including prospects for furthering trade and investment.
In April 2003, the Trade Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade of the Federal Parliament visited Sofia to undertake investigations into Australia's trade and investment relations with Central Europe.
Senator Robert Hill visited Bulgaria in 1990, when he was Shadow Minister for Foreign Affairs.
Political Overview
Parliamentary System
Under its July 1991 constitution, Bulgaria is a parliamentary republic with a parliamentary executive. It has a single chamber, 240-member parliament, the National Assembly, which is elected every five years by universal suffrage. Members are elected through a system of proportional representation, with a four per cent threshold for party representation. The Prime Minister and Cabinet are drawn from the group able to command a majority in the Assembly.
The President, who is also Commander-in-Chief of the Armed Forces, is popularly elected once every five years for a maximum of two terms. The President enjoys largely ceremonial powers but does hold certain emergency powers and may return legislation to the National Assembly for further consideration, which can in turn be overruled. The most recent Bulgarian Presidential election took place in two rounds on 22 and 29 October 2006, where the incumbent since 2001, Georgi Parvanov, was returned for a second term. Parvanov won 61 per cent required to avoid a second round run-off against the candidate who polled the next largest amount of votes (nationalist ‘Ataka’ party candidate, Volen Siderov, with 21 per cent). In the second round, Parvanov secured 76 per cent of votes cast (from the 41 per cent of eligible national voters who turned out).
Bulgaria’s most recent parliamentary elections took place in June 2005 when the Bulgarian Socialist Party (BSP), under the leadership of Sergey Stanishev, won the largest number of votes but fell short of obtaining an overall majority that would enable it to form a government. The Socialist Party gained 34 per cent of the vote (82 seats) while the centre-right party of ex-king, and former Prime Minister, Simeon Saxe-Coburg-Gotha, the Simeon National Movement (SNM), gained 22 per cent of the vote (53 seats). The predominately ethnic Turkish Movement for Rights and Freedoms (MRF) polled third with 14 per cent of the vote (34 seats) and the Ataka (Attack) coalition, led by the newly formed national party, Ataka, obtained 8.8 per cent of the vote (21 seats).
On 15 August 2005, an agreement was reached between the three largest parties (BSP, SNM and MRF), naming BSP’s leader Sergei Stanishev as the country’s new prime minister. Bulgaria’s three-party coalition cabinet, made up of these parties, controls 169 of the 240 seats in Bulgaria’s legislature.
Foreign Policy
The main foreign policy objective of recent governments has been to secure Bulgaria's membership of the EU and NATO, for which there has been widespread public support.
Bulgaria, along with Romania, joined the European Union on 1 January 2007. Bulgaria has long aimed at EU membership. At its summit in Copenhagen in December 2002, the EU stated that its objective was to welcome Bulgaria, along with Romania, as a member of the Union in 2007. On 13 December 2004 EU member states agreed that Bulgaria was ready to sign an EU accession treaty, which was carried out in April 2005. On 26 September 2006 the European Commission recommended that Bulgaria be admitted to the EU on 1 January 2007. However, a number of the advantages of membership could be denied to Bulgaria if more reform progress is not made.
Bulgaria was invited to join NATO at the Prague Summit on 24 November 2002 and became a member of NATO on 2 April 2004. Bulgaria signed NATO's Partnership for Peace in February 1994 and has participated in joint exercises since 1995. It showed its commitment to NATO by providing bases for the United States Forces during the Kosovo Crisis in 1999 and sent specialised troops to Afghanistan as part of the war on terrorism.
Bulgaria takes an active role in multilateral institutions and was a non-permanent member on the United Nations Security Council in 2002-03. Bulgaria is engaged at an international level in peacekeeping and disarmament issues. Bulgaria committed one frigate and a medical unit for deployment with the EU force contingent to Lebanon in 2006. Bulgaria currently has about 150 soldiers deployed in Iraq (on humanitarian duties) and about 120 with ISAF/NATO in Afghanistan. Bulgaria is a member of the Australia Group and several other like-minded groupings such as the Wassenaar Agreement, the Zangger Committee, the Nuclear Suppliers Group and the Missile Technology Control Regime. Bulgaria is a member of the Council of Europe and in the second half of 1994 became the first former communist state to hold the Presidency. Bulgaria joined the World Trade Organization in 1996.
Economic Overview
Bulgaria's economic situation has improved significantly over the past few years, following a period of severe economic downturn in 1996-97 when it experienced triple-digit inflation and contraction of GDP first by 10.6 per cent and then by 6.9 per cent. In May 1997, the government moved rapidly to stabilise the economy with assistance from the International Monetary Fund (IMF). A currency board was established, a three-year agreement was concluded with the IMF, and fiscal policy and structural reforms were adopted, as was a program of privatisation of state-owned enterprises. Immediate effects were increases in the price of electricity and fuel, and a dramatic increase in unemployment as a result of the closure of many unprofitable state-owned enterprises. Positive growth began to register from 1998.
Privatisation remains the focus of the government, with Bulgaria planning to privatise most remaining state companies in 2006, with the exception of 113 companies that are barred from privatisation.
Bulgaria has now achieved macro-economic stability, a fairly low inflation rate and a low basic interest rate. In 2005 Bulgaria’s rate of growth was 5.5 per cent. The current account deficit rose sharply in 2005 to around 11.7 per cent of GDP and is expected to rise to 13.4 per cent of GDP in 2006. Inflation averaged 5 per cent in 2005.
The standard of living is still lower in Bulgaria than in other Central European countries. GDP per head at PPP was around US$8,900 in 2005. Around nine per cent of the labour force is employed in agriculture while the remainder is in industry and services. Unemployment, which reached 14.3 per cent in 2003, fell to 12.7 per cent in 2004 and 11.5 per cent in 2005.
Last reviewed date: 30/11/2007