Challenges and Opportunities for the Knowledge Economy in Bulgaria by Sophia Kassidova Deputy Minister of Economy World Bank KE Conference, Paris 19-22 Feb 2002 - PowerPoint PPT Presentation

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Challenges and Opportunities for the Knowledge Economy in Bulgaria by Sophia Kassidova Deputy Minister of Economy World Bank KE Conference, Paris 19-22 Feb 2002

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Title: Challenges and Opportunities for the Knowledge Economy in Bulgaria by Sophia Kassidova Deputy Minister of Economy World Bank KE Conference, Paris 19-22 Feb 2002


1
Challenges and Opportunities for the Knowledge
Economy in Bulgaria by Sophia Kassidova Deputy
Minister of Economy World Bank KE Conference,
Paris 19-22 Feb 2002
2
Bulgaria - Stability and Growth
  • Political stability consensus on EU and NATO
    membership
  • Macroeconomic stability
  • currency board since 01/07/1997 BGN 1EUR 0.5113
  • low interest rates base interest rate around
    4.5
  • low inflation 4.8 in 2001 (preliminary data)
  • Dynamic economic growth 5.8 in 2000 and 4.9
    for 2001 (estimate, source Ministry of Economy)
  • IMF Program
  • World Bank Country Assistance Strategy 2001--2004
  • National Anti-corruption Strategy and Programme
    for its Implementation
  • Strategy for Energy Sector Development

Ministry of Economy
3
Macroeconomic Indicators
Source Ministry of Finance
4
GDP Growth Bulgaria/CEE Countries
Bulgaria
GDP Growth in CEE Countries in 2001 ()
5.8
6
5.3
4.6
5
4.1
4.0
4
3.1
3
2.2
1.6
2
1
0
Bulgaria
Hungary
Slovenia
Croatia
Poland
Czech
Slovakia
Romania
Republic
5
Total Tax Burden ( GDP)
Source Ministry of Finance
6
Personal Income Tax Rates/Brackets
29
28
24
18
Source Ministry of Finance
7
Background
  • Tradition of excellence in ICT production.
    Specialization under COMECON (50) - PCs,
    processors, peripherals, teleprocessing systems
    and devices, etc.
  • In 1989 share of electronics and telecoms -- 25
    of industrial production. Sector employed 130,000
    people, incl. 8,000 highly qualified engineers.
  • Bulgarias ICT industry suffered seriously after
    1990.
  • Macroeconomic stabilization since 1997 made ICT
    one of the most dynamic sectors of economy.

8
ICT Infrastructure
  • Strengths
  • Telephone penetration rate 36 phone lines per
    100 people
  • Households with installed telephone lines 75
  • Mobile telephones 20 of population and
    exponentially growing
  • Cable TV penetration 48 of population
  • ISP is liberalized and competitive
  • Weaknesses
  • Households with PCs 8.5
  • Regional disparities (i.e. less access in rural
    areas)
  • Telecom monopoly

9
Internet Access Dynamics
10
Internet Affordability (in )
11
Where Internet is Used ?
Yes No DK/NA
Home 30,2 64,6 5,2
Friends, relatives 19,8 74,0 6,3
School, university 16,7 75,0 8,3
Work 41,7 53,1 5,2
Public places 46,9 49,0 4,2
12
Bulgaria - Education
  • Bulgarias secondary education is among the best
    in the world 5th in the world in sciences, 11th
    in mathematics (World Bank and The Economist
    ranking)
  • Bulgarians rank second in international IQ tests
    (MENSA International)
  • Bulgarians are among the top university students
    worldwide (2nd in the world in SAT scores)
  • Many students abroad Brain Drain

13
ICT in Education
  • Growing penetration of ICT in schools - no. of
    PCs at secondary schools doubled in 2001.
    Currently - 5,643 computers and 989 computer labs
    in 1016 secondary schools
  • Some 20,000 computers at 48 universities. Average
    of 11 students per PC
  • All universities have access to Internet. 45 (out
    of 48) have Internet sites
  • 6,485 students in ICT 221 doctoral degree
    students

14
Recent Developments in Knowledge Economy
  • ICT employment in 2000 increased by 100 yoy
  • Global crises in IT markets in 2001 did not
    significantly affect employment and IT business
    in Bulgaria
  • Outsourcing, incl. by major IT firms is
    predominant type of IT business
  • First signs of following patterns similar to
    Southeast Asia in assembling and hardware
    production

15
Challenges and Potential for Development
  • Small level of PC and Internet penetration
  • Low purchasing power
  • Banking and financial intermediation needs to
    increase
  • Insufficient venture capital
  • Public spending for RD is increasing 3.8 in
    2001, 4.1 in 2002

16
... Potential for Development
  • Qualified workforce
  • UNDP 2001 TAI (Technology Achievement Index)
    measures Bulgaria as a potential technology
    leader
  • Regulatory framework is largely harmonized with
    the EU one
  • E-signature law is in place

17
... Potential for Development
  • ICT is a tool to overcome the gap with developed
    economies
  • ICT keeps the economy open and globally
    integrated
  • Political will to support the sector

18
Future Steps
  • ?-government -- efficient and unbiased public
    administration is conducive favorable business
    climate
  • Tax concessions for big FDI in the sector
  • Finalize structural reforms

19
Future Steps
  • Technology and Innovation National Strategy under
    preparation
  • Accelerating penetration of ICT in all spheres of
    the economy and society
  • ICT as a tool to bring innovation curricula and
    teaching and research methods
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