REGIONAL PROFILES: INDICATORS OF DEVELOPMENT Sofia 2012 Regional Profiles: Indicators of Development Institute for Market Economics Sofia 2012 1 The study „Regional Profiles: Indicators of Development” is a part of a three-year project financed by the America for Bulgaria Foundation. The publication aims to paint as complete a picture as possible, covering both the economic and social aspects of life in the regions. © Authors: Svetla Kostadinova, Desislava Nikolova, Ph.D., Petar Ganev, Yavor Alexiev, Kaloyan Staykov, Nikolay Valkanov, Alexander Tzvetkov, Ph.D., Atanas Atanassov. © Editor: Ass. Prof. Yordan Kalchev. © Translation: Valentina Rasheva © Editor: Natasha Stoyanova The publication is distributed free of charge. Copyright on this publication is the property of the Institute for Market Economics and the America for Bulgaria Foundation. ISBN 978-954-8624-31-2 2 Content Foreword __________________________ 6 Acknowledgments __________________ 7 Executive Summary _________________ 9 Local Tax Policy _____________________ 15 Main Trends in Primary and Secondary Education _____ 23 Business Surveys: Corruption and Poor Administration Go Hand in Hand ___________________ 29 Factors Determining Life Satisfaction in Different Districts _________________ 33 Types of Regional Profiles: Clusterisation according to the Socio-Economic Condition and Development of Districts _ 37 Blagoevgrad _______________________ 45 Pleven ____________________________ 101 Burgas ____________________________ 49 Plovdiv ____________________________ 105 Varna _____________________________ 53 Razgrad ___________________________ 109 Veliko Tarnovo ______________________ 57 Ruse ______________________________ 113 Vidin _____________________________ 61 Silistra _____________________________ 117 Vratsa _____________________________ 65 Sliven _____________________________ 121 Gabrovo___________________________ 69 Smolyan ___________________________ 125 Dobrich ___________________________ 73 Sofia (capital) ______________________ 129 Kardzhali __________________________ 77 Sofia ______________________________ 133 Kyustendil _________________________ 81 Stara Zagora _______________________ 137 Lovech ____________________________ 85 Targovishte ________________________ 141 Montana __________________________ 89 Haskovo ___________________________ 145 Pazardzhik _________________________ 93 Shumen ___________________________ 149 Pernik ____________________________ 97 Yambol ___________________________ 153 Methodology ______________________ 157 Annex ____________________________ 169 References _________________________ 175 3 4 The America for Bulgaria Foundation is proud to partner with the Institute for Market Economics in the publication of “Regional Profiles. Indicators of Development.” Both in- stitutions support the further development of the market economy in Bulgaria, a goal we hope this project will ad- vance. It collects economic, regulatory and social data about each of the 28 regions of Bulgaria. Our aim is to present a comprehensive, accurate and up-to-date picture of regional development. We also want to show how each region stacks up against the other 27, and in doing so encourage healthy regional competition. This report can be put to a variety of uses. Government and local authorities can use the data to see where a specific region stands in relation to others and determine where im- provements can be made. Scholars can use the information to assess the impact of certain policies on economic growth and other vital measures of success. Business considering new investments or relocation can use the data to analyze the tax, regulations and social policies that could affect the success or failure of the enterprise. Individuals can employ the data to help make decisions about where to live, work or establish businesses. Competition is the engine of a market economy. We hope this annual report will help spur productive rivalry among Bulgaria’s 28 regions, which will in turn lead to better policies and a stronger, more vibrant economy. Patrick H. Bracken President of America for Bulgaria Foundation 5 Foreword The publication „Regional Profiles: Indicators of Development” aims to provide objective, timely and comprehensive information on the development of Bulgarian regions, both in static and dynamic terms. The publication aims to paint as complete a picture as possible, covering both the economic and social aspects of life in the regions. Regions are subjected to overview at the level of administrative districts (oblasti); and this division was largely determined by the available data. Going down to the municipal level and preparing 264 profiles would not only be an enormous task but also quite impos- sible since much of the data is either not available or does not make much sense at the municipal level. The profiles of Bulgaria‘s 28 districts cover eight categories, each of which is related to the quality of life and the level of development of those regions, including: demographics, economy, business environment, infrastructure, health, environment, education and social environment. You will find all about these categories, indicators and sources of informa- tion in the description of the methodology applied during this survey, and at the end of the booklet you will find some of the main source data. It is our belief that this publication will contribute to a deeper understanding of the re- gional development, and will provoke interest in the topic. The analysis of available statis- tical data, the results of field studies undertaken and the interviews held by the team of the Institute for Market Economics (IME) in each separate area revealed a very colourful picture of development in various regions, and we tried to reflect it in the Profiles as much as possible. You will find the main highlights of this publication in the Executive Summary that also presents the main findings of the cluster analysis. This publication is accompanied by four thematic analyses which subject to review the tax policy at local level, the trends in pri- mary and secondary education, and comment the companies’ perceptions of business environment, as well as citizens‘ perceptions of living conditions in separate districts. The Regional Profiles are intended for everyone interested in regional development, and we hope that this publication will provoke debates at local level and will become the basis for informed policies, as well as an incentive for competition between local authorities. A competitive environment provides people with a choice and drives development, and it fully applies to development of regions across the country. This survey is a part of the IME‘s long-term effort, so in the coming years, new editions of the Regional Profiles will follow. Much more complete, up-to-date and interactive infor- mation than the data contained in the print edition is available on the specialised website for the project at http://www.regionalprofiles.bg. 6 Acknowledgments We the IME team would like to extend our sincerest gratitude to the America for Bulgaria Foundation, that provided assistance and financial support to the IME‘s long-term effort within the sphere of the regional development. The Foundation‘s team did not just provide the funding for this publication, but from the very onset it embraced the idea of this type of survey, and actively participated in the working process. Without their support, this publica- tion would not have happened. Special gratitude is due to our partners from MicroStat Analytics who worked side by side with us throughout this project and made substantial contribution to this publication. Statistical processing and field studies would have been very difficult without their help. We are grateful as well to the members of the project‘s Advisory Board, whose comments and critique have been of great benefit and improved this publication: Prof. Vesselina Troeva, Ph.D. Arch. (National Centre for Regional Development PLC), Dr Docho Mihaylov (Agency for Socio-Economic Analysis Foundation), Dr Evgeni Evgeniev (World Bank), Lachezar Bogdanov (Industry Watch Group Ltd.) Nadezhda Yarlovska, Dipl. Eng. (National Centre for Regional Development EAD), Ass. Prof. Dr Neno Dimov (Kliment Ohridski Sofia University), Olga Chugunska (Bulgarian Chamber of Commerce and Industry), Tsvetan Simeonov (Bulgarian Chamber of Commerce and Industry), and also to Lenko Lenkov (America for Bulgaria Foundation) and Mariya Zlatareva (UNDP Bulgaria) who had observer status. We would also like to thank the team of the Bulgarian Institute for Legal Initiatives Foundation for the advice on all indicators and issues in the field of justice. We feel obliged to the Bulgarian Chamber of Commerce and Industry (BCCI) for the overall support for the project. Regional BCCI representatives met our teams in most districts across the country, and the discussions we had were very informative and useful. We are grateful to all those whom we met in the field and who helped us make sense of the raw data on regional development. We are extremely grateful to Ass. Prof. Yordan Kalchev, Ph.D. for the great scientific editorial work resulting in this publication. Despite pressing deadlines Ass. Prof. Kalchev, Ph.D. man- aged to eliminate some inaccuracies in the publication, and his comments resulted in a much improved text. Any inaccuracies or errors in this publication are entirely our responsibility. Gathering the necessary information for this paper was not just an adventure but required a lot