Globalization Impact on Bulgaria


The process of globalization has may faces and names just like a summer wind. In many cases, the term globalization has been illustrated to mean amplified integration of the world economy through flow of trade, information, capital and people across borders (Internet Traffic Report). The world today has become a global village and Bulgaria has not been left out of action. This fact has been aggravated by the fast pace of innovations in transport and communication that has significantly reduced barriers and enhanced exchange across barriers. Bulgaria ranks highly when it comes to the rate of globalization, its index has increased over time. From the year 1995-2009, Bulgaria’s index has increased by 0.50 points up to 4.03 down from 3.32.

Impacts of Globalization

U. S Department of State (2006) observes that there are many ways in which globalization has impacted on different stakeholders in Bulgaria. When we look at the real GDP of the country, it has been moving upward and strong over the last two decades.  This is due to a boost in the countries exports.  However, this growth has been unevenly distributed and concentrated on areas which can withstand competition and those which can easily attract new economic activities.  The growth has however led to increased income in the region.

There is also growing trade in the region that has helped drive economic growth. It is as a result of exports to the developing nations. This has consequently benefited various industries and companies in Bulgaria and their workers at large. The country has also been a best destination for multinationals in Europe (Embassy.org, 2005).). There has been an increased Foreign Direct Investment (FDI) that have helped create more jobs and generate more income hence boosting the people’s incomes. Additionally, there is an effect on labor mobility in the region with its net flows representing the new sources of supply and demand.  The immigrants in the country have helped to offset a decline in population due to aging workforce (Trav Lang, 2009).  Firms in the region have benefited from both skilled and unskilled labor flowing across its borders. Agriculture has been positively affected globalization of the wine industry as it is subjected to agricultural and rural development in the entire Europe. Agricultural projects have been subsidized and highly mechanized.

NCPA (2006) asserts that today in Bulgaria a big portion of the exports is taken over by cyclically sensitive raw materials such as chemicals and metals, a fact that has made the exports vulnerable to shifts in international demand and prices. Apart from this, there are encouraging shows export is being diversified into labor intensive goods like furniture and clothing. There is however structural reforms that are aimed at strengthening te trend and also help reduce the deficit in current account.

Bulgaria is the highest exporter of wine in the EU. Its market has become susceptible to global market and international policies as result of globalization. A good demonstration of this is during the socialist period when the country exported 61.5% of its total production, in the shaky transition period of the 1900s and 2000s; Bulgaria exported 65% of its wine output. As a result, there has been enormous development in infrastructure for industrial wine production. All these improvements in both production and infrastructure have served as a major hard currency earner for the economy other than offering cultural pride.  Other main exports of the country are: cigarettes, chemicals, fruits, machinery, meat, tobacco, vegetables and transport equipment (U. S Department of State, 2006).

The infrastructure especially roads have been immensely affected by corruption in Bulgaria. Due to corruption scandal, the European Commission suspended payment of EU funds that were meant for road infrastructure. This scandal was surrounding the National Road Infrastructure Fund (NRIF) whose two officials were found to be directly responsible for misappropriation of EU funds. Examples of areas of concern are the construction of Trakya highway where Transparency International ahs to monitor the deal and present the report of the findings.  Due to globalization however, the cases of corruption in the construction of infrastructure are reducing as many nations especially those in the region are closely and keenly watching the events. Bulgaria would not want to loose her partners and many benefits she reaps (United States Department of Justice, 2009).

The main industries in Bulgaria include: agriculture, brewing and distilling, mining (iron, steel, oil and gas refining, cement, etc), fertilizer, leather goods, machinery, textile, tobacco among others. Globalization has affected all this industries to some extend with the process opening up a wider market for exports and also increasing the amount of produce within the country as earlier discussed above. Bulgaria also imports commodities such as equipment and machinery, metal ores and some other raw materials for industrial purposes. Over the years, the imports have increased with figures standing at $41,000 million in 2008 down from $ 19,000 million in 2004. This has been attributed to the accelerated rates of globalization in the region (National Centre for Policy Analysis, 2006).

A look at the demographical statistics of Bulgaria indicates that the total population is 7, 606,687. The age structure is as follows: 0-14 makes up 13.8% where the males are slightly higher with 509, 544 as compared to 484, 816 females. At the age of 15-64, the percentage is 68.5% but the females are slightly more with 2, 508, 060 compared to 2,426, 060 males. The age above 65 makes up only 17.7% 0f population and again there are more females than males at 756, 784 and 518, 711 respectively. The population growth rate stands at -0.76 with a median age of 41.4 years. This generation is middle aged and most of it concentrated at 15-64 years. This is the age that is normally active and effective hence very valuable and efficient in provision of labor/workforce to the industries. Due to this, it has attracted a number of multi-national corporations that have flocked in due to availability of labor (Embassy.org, 2005).