Reshuffle May Help Expanding Tourism Sector

Economic News

22 Jul 2010
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A major government reshuffle in mid-July saw not only changes amongst the country’s top political leadership, but also gave a boost to one of the country's most promising sectors - tourism. With arrivals seemingly unaffected by recent regional turbulence, tourism has recently been one of the economy's brightest spots.

Prime Minister Simeon Saxe-Coburg announced his intention to restructure the cabinet and the leadership of his National Movement Simeon II (NMSII) party end of June, moving rapidly on July 8 to replaced NMSII floor leader Plamen Panayotov with Stanimir Ilchev. Then, on July 17, the premier announced the rest of the changes, winning parliamentary approval for them with a narrow 119-107 majority.

Under the changes, Deputy Prime Minister and Minister of Labour Lydia Shuleva was given the economy portfolio instead of Deputy Prime Minister Nikolai Vasilev. Shuleva’s deputy Hristina Hristova succeeded her as minister of labour and social policy, while Vasilev retained his vice premiership and replaced Plamen Petrov as minister of transport. Petrov was expected to head the state Telecommunications Agency, while Panayotov added the position of deputy prime minister overseeing accession talks with the European Union to his floor leader post.

Minister of Education Vladimir Atanasov and Minister of Health Bozhidar Finkov were replaced by their deputies, Slavcho Bogoev and Igor Damyanov. Elsewhere, Nedzhdet Mollov, the minister of emergency situations, lost his job to the deputy governor of the district of Silistra, Filis Husmenova.

The prime minister had earlier declared that the reshuffle was necessary as the cabinet had too many ministers. He also criticised NMSII deputies for lacking party discipline and making statements that conflicted with the party line.

Opposition parties were generally of the opinion that it was far too late for a reshuffle to make much difference. Opposition leader Nadezhda Mihailova compared the reshuffle to “moving pawns on the chessboard”, while others predicted that it would do little to restore the government’s popularity.

A public opinion poll conducted by the National Centre for Public Opinion Studies just before the reshuffle showed the extent of the problem faced by NMSII. Support was a lowly 9.5% - down from the 43% of two years ago. The same poll showed around 67% of the Bulgarians disapproving of the government’s performance.

However, while the reshuffle may not solve all of NMSII’s problems, Prime Minister Saxe-Coburg did also make a statement during the lead up that brought general support from one group - the tourism sector.

On July 14, business news web service Pari reported that although there would be structural changes in the cabinet, these would not be connected with the opening of new ministries. This meant that the authorities connected to the tourism sector, which currently comes under the Economy Ministry, would be separated out into a new agency. This was later confirmed.

Deputy Prime Minister and Economy Minister Nikolay Vasilev told reporters that day that there was nothing strange about this as tourism was constantly developing its role in the economy and increasing its importance.

This was a statement born out by a rash of data also released mid-July, showing how the Bulgarian sector had experienced some robust growth in 2003-2003, despite international events and regional misperceptions.

According to figures released by the Economy Ministry on July 13, the first two quarters of 2003 saw some 1,234,960 foreign tourists visit the country - up 9.59% on the same period the year before. The number of foreign tourists in June alone was up by 23.6% from the same month in 2003. Greece topped the list for country of origin, with 219,857 visitors, followed by Germany with 154,569, Macedonia with 94,003, the UK with 60,365, Serbia and Montenegro with 41,719 and Russia with 37,778.

The total income from tourism, minus transport items, for the first four months of this year was USD224m, up 12.5% on the same period last year.

Meanwhile, Bulgarians themselves spent around USD182.8m on trips abroad, leaving a positive 'tourism balance' for the four months of USD 41.2m, up 19.1% on last year. Vasilev added that neither the SARS scare, nor the Iraqi crisis had inflicted damage on Bulgaria's tourism sector. This bore out the ministry's early claims that tourism revenues would continue to grow despite international events, made back in March. At that time, the World Association of Tour Operators had kept Bulgaria off their list of countries at risk from the hostilities. Back at that time too, Deputy Economy minister Dimitar Hadzhinikolov had predicted that revenue would grow 8-12% during 2003, year-on-year. In this prediction he was following a long term trend, which has seen growth over the last three years at least - 2002's tourism revenue figure of BGN1.35bn being itself 11% up on 2001, with tourist arrivals in 2002 reaching 5.5m - up 9% on the previous 12 months.

Bringing those tourists in may also involve some developments in the months ahead. On July 11, the Bulgarian cabinet approved a plan for the privatisation of the state airline, Bulgaria Air.

While up to 100% of the airline's capital will be offered, 51% must remain in the hands of Bulgarian nationals for it to retain its national carrier status. In a two stage public tender, those interested must also be able to show EUR100m annual revenues from civil aviation in the past three years, and prove they have managed funds exceeding EUR200m. The Privatisation Agency (PA) will recommend a bid according to price, investment and employment commitments, while the final decision will rest with the cabinet.

If Bulgaria is to continue building on its recent tourism successes - fending off competition from some tough local rivals, such as Greece and Turkey - then the airline's future is crucial. While many tourists come to Bulgaria currently by road and rail from neighbouring countries, achieving a really global position will take a global means of transport.

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