As in many eastern european countries, and in the balkans in particular, Bulgaria belongs to those emerging countries where the labour is cheap and therefore attract many foreign companies. Thus, the bulgarian economy is being outsourced. Bulgaria is considered today as an emerging country thanks to on one hand the foreign investments, as for instance in the tourism sector, and on another hand, a greater openness to the international market, which is a key element for the manufacturing industry and especially the textile sector that historically influenced Bulgaria.
An economic growth stopped by the the crisis
Previously an agricultural economy, Bulgaria founded its economy on foreign trade and has a strong market presence in the sectors of food, mechanics, electronics and textile. After joining the european community, the economy has been constantly growing between 2000 and 2008 and reached an annual growth rate of 5.5%. The reason is, a third of the bulgarians works in the industrial sector, and the labour is pretty cheap. Moreover, Bulgaria became dependent of its trading partners (especially Greece and Italy, that are now going through a financial crisis) and as the crisis of 2009 hit Europe, the economic growth was brutally stopped. The decline of foreign orders weakened the industry in its entirety and hit all sectors, therefore the government put in place an austerity policy engaging a reduction in public spendings of 15% in order to readjust the balance of the finances by the end of the year.
Textile: an independent sector
The textile sector represents 4% of the manufacturing industry and employs 22.4% of the global population. The sector happens to be a traditional sector if the bulgarian industry which was already present under the Ottoman Empire and made Bulgaria famous for its woolen cloth production. Today the textile production concentrates itself mainly in the capital, Sofia, where many types of textiles are produced, as cotton, woolen cloth, silk, and so on. The needs of the textile industry in machines and raw material is almost a 100% covered by the country’s own production: for instance, cutting machines are produced on site. Indeed, 10.4% of the bulgarian population works in the machine-building field, which allows Bulgaria to remain independent in the textile sector as the country possesses its own machines. Furthermore, the industrial equipments production is the most value added field of the bulgarian economy, which could allow the country to become fully independent in the next coming years and dispense with foreign investments.