02.02.2021

Which hinders the development of Northern Bulgaria

After presenting its annual analysis "Regional Profiles 2020", the Institute for Market Economy (IME) makes a detailed review of economic and social development in Northern Bulgaria.

"The south wins, but with the big assumption that it is the capital, which greatly distorts all attempts at such a comparison. When we eliminate the capital from the account and compare the north and the south, the south wins again, but with a much smaller margin," economist Adrian Nikolov of the Institute for Market Economics told BNR.

Geography certainly plays a very big role, but the development of historical infrastructure is even more important, he noted.

"The geographical advantage of the south is not as great as the development of the road network, especially the connections between the economic centers."

At this stage in the north we have fragmented nuclei of strong economic activity, but the ties between them are much weaker, Nikolov pointed out.

The Danube River played a major role in the development of the areas in the north during the Ottoman period, and in tsarist times as an important route on which Bulgarian goods went to Europe.

During socialism, however, this role diminished considerably, and since the fall of the regime, Bulgarian businesses and the state have failed to capitalize on this opportunity, the analyst stressed.

The small agricultural municipalities in the northwest are "prospering" as far as prosperity can be said during the crisis - this is how Adrian Nikolov described the situation with the regions less affected by the effects of the pandemic.

According to him, the most important factor is human resources. He gave examples of Silistra and Targovishte, where about a third of the population has a primary education "and this is perhaps the strongest deterrent".

Even when we try to aggressively industrialize, as happened with Plovdiv and even Yambol, the presence of a critical mass of people with vocational or at least secondary education is sufficient, but in the economy of the last decade people without basic skills remain on the sidelines of economic development, they fail to fit into the modern labor market, commented Adrian Nikolov.

The researcher pointed to Gabrovo as an example of how the local government relies on development as a local IT hub in the field of high technology and to attract staff from this engine of the Bulgarian economy with high added value, high pay and good welfare. However, this is happening against the background of a rapidly aging population, as the district is among those with the most negative demographic indicators.

Small municipalities are far behind, there are large and very old areas that remain outside the general economic trend, the analyst concluded.

The work of a home office can be an opportunity and a potential for less developed regions, Nikolov believes. He pointed out that Montana and Vratsa are among the areas that, despite the overall contraction in tourism, are developing slightly upwards even in 2020.

"These were probably people who liked a guest house, threw their laptops in their backpacks and went to work there in the summer. In this sense, municipalities and small settlements that can offer clean nature, decent infrastructure, peace and quiet away from the big city can benefit from this situation."