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Bulgaria: Toward a Blue Economy Development

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Bulgaria: Toward a Blue Economy Development POLICY BRIEF Public Disclosure Authorized BULGARIA: TOWARD A BLUE ECONOMY DEVELOPMENT This policy brief highlights the challenges, opportunities, that are central to the transition of the Republic of Bulgaria’s key marine-based economic sectors to Blue economic development. It is a part of a larger study on Bulgaria’s transition to Blue economy which includes sector level assessment and policy recommendations for actions. The ‘Blue economy’ term is used herein as an umbrella term related to the development policy of oceanic and maritime economic activities in an integrated and Public Disclosure Authorized sustainable way. Public Disclosure Authorized Public Disclosure Authorized 1 Introduction A large part of the Bulgarian coastal economy continues to Blue Economy The ‘Blue economy concept’ promotes rely on traditional sectors, such as beach tourism, fisheries, economic growth, social inclusion, and the maritime transport, and mineral extraction. However, there preservation or improvement of livelihoods while at the same time ensuring has been an increasing fragmentation in the management of environmental sustainability of the oceans coastal environmental and marine natural resources, due to and coastal areas (World Bank 2017). a lack of consistency in sector policies and market development at the regional and national levels. Recent years witnessed an increasing fragmentation in the management of the coastal environment, and marine natural resources, inconsistent sector development policies, untapped markets and labor force opportunities. The COVID-19 pandemic introduced new uncertainties in the national economy and particularly in the Blue economic sectors. The Blue economy is an opportunity to define new poles of growth and job-creating opportunities in a Common Maritime Agenda more inclusive coastal and a marine economy. Bulgaria had for the Black Sea endorsed the “Common Maritime Agenda for the Black Sea” (CMA) supported by EU which aims to expand the scope of cooperation in the Black Sea basin on key sectors. Bulgaria’s evolution to better stewardship of marine resources could provide valuable example in the Black sea region where The CMA advances the commitments of the 2018 Burgas Ministerial Declaration “Towards a Common environmental challenge remains a substantial Maritime Agenda for the Black Sea. EU also supports the implementation of CMA through ”Strategic developmental deterrent. Research and Innovation Agenda for the Black Sea (SRIA) emphasizing research and innovation in key Bulgaria could elevate its regional leadership position in the sectors including biodiversity, cultural heritage and local, national and transboundary policy measures. Black Sea for implementation of the governance and While the CMA facilitated and advanced the political commitments of the Black Sea countries to operational frameworks of the Common Maritime Agenda cooperate, it underscored current barriers to address pollution issues at regional level which include lack (CMA) for the Black Sea and its scientific pillar, the Strategic of knowledge, policy and finance. Both CMA and Research and Innovation Agenda for the Black Sea (SRIA). SRIA, set a new dynamic for better governance of the sea based on an enhanced political and operational Both CMA and SRIA encourage national initiatives and coordination, while recognizing the added value of joint projects to implement the shared objectives. projects’ complementary for enhancing regional dynamics, CMA Goals promote Blue economy regional value chains and untapped investment opportunities. Mainstreaming of their spirit and pillars in the national policies and funding programs, in line with the recommendations provided in the Blue Economy 2 Policy note - would advance the Blue economy development in Bulgaria, as promoted by CMA and SRIA and would serve as good practice for other CMA countries. The EU Acquis Communautaire will continue to shape the context in which the management gaps of marine ecosystems and economic activities depending on them will be addressed in Bulgaria. The World Bank and the European Commission’s promote the Blue Economy Development Framework (BEDF) which offer a set of complementary tools for holistic consideration of ocean economy, livelihoods, and ecosystems. With appropriate actions to apply those policies and tools Bulgaria could set the stage for sustainable post-pandemic recovery and “building forward better” by redefining the relationship between economic growth and sustainability of marine ecosystems. BEDF’s toolkit could facilitate the Black Sea regional development shifting the focus on sustainable economic and social dimensions. The World Bank is also proactively involved in the Black Sea Blue economy cooperation agenda through the preparation of a multiyear program for Blueing the Black Sea (BBSEA). This program intends to provide a comprehensive support to assist the Black Sea countries in expanding the knowledge platform for mobilizing investments and technical assistance. Growing importance of maritime economy Situated in one of the most attractive regions of Europe, Bulgaria boasts a beautiful coastline that is a mosaic of marine and terrestrial systems of great natural value and substantial socioeconomic benefit. The Black Sea coast is a solid center of economic growth and draws significant numbers of domestic and international visitors during the tourist season. The Black Sea’s unique coastal and marine resources offer opportunities for the sustainable growth of the industries that depend on them. The input of Bulgaria’s maritime economy to the national economy, including employment, is significant relative to EU standards. Several marine based sectors, including coastal and maritime tourism, fishery and aquaculture, shipping, ports, ship building and repair, oil and gas exploitation, provided about 2% of the national GVA in 2018 and 3.4% of all jobs1 placing Bulgaria above the EU averages2 and above Italy or France. 1 EC, The EU Blue Economy Report 2020 (Brussels: European Commission, 2020). The EU Blue Economy report 2020 2 The contribution of the Blue Economy established sectors to the EU-28 economy in 2018 was 1.5 % in terms of GVA and 2.2% in terms of employment. (The EU Blue Economy report 2020). 3 Given the relatively smaller coastal and maritime space of Bulgaria, these results illustrate the strategic importance of Bulgaria’s maritime economy. Source: Based on the EU Blue Economy Report 2020 Coastal tourism alone generated 2.6 % of all Blue economy jobs and contributed 69 % to the Blue economy GVA in 20183. The favorable conditions in Bulgaria for wellness and spa tourism along the coast represent a potential for additional jobs. The country’s fisheries sector, which includes capture fisheries, aquaculture, and fish processing, contributed €85 million to the economy, or 1.7 percent of the national GVA in 2018; it also employed 9,250 people, generating 9 percent of the Blue economy jobs. In view of increasing seafood consumption globally, this sector offers major economic potential. The economic potential of Bulgaria’s coastal and maritime ecosystem is at risk from human and climatic pressures. Urbanization, pollution, climate change impacts, coastal erosion, and cliff retreat ── all natural and human-induced impacts, are putting serious stresses on the coast. The estimated average rate of sea level rise along the Bulgarian Black Sea coast varies from 1.5 to 3 mm/year4. Along the Black Sea coast, eleven sensitive stretches with a total length of approximately 267 km are prone to heightened risk of sea floods5. Concentrated urbanization together with increased industrial development, including ports and 3 The EU Blue Economy report 2020, https://Blueindicators.ec.europa.eu/sites/default/files/2020_06_BlueEconomy-2020- annexes-LD-part1_FINAL-readable-maps.pdf 4 Pashova, L., Yovev, I. 2010. Geodetic studies of the influence of climate change on the Black Sea level trend. Journal of environmental protection and ecology 11(2):791-801. 5 Flood Risk Management Plan of the Black Sea region (2016-2022) 4 marine infrastructure, created pressures on the coastal environment and threatening habitats and the very values that draw the interest of visitors and investors. A new challenge will be to find the metrics to gauge the extent to which Bulgaria’s Blue economy transition could also foster growth and accelerate the pace of job and income creation in the hinterland regions. An upsurge in Blue economy innovation and technology development could drive maritime economic expansion, and emerging new industries could create opportunities for high-quality jobs beyond the traditional sectors. Therefore, any future Blue economy strategy should highlight that the distributional economic effects of the traditional and emerging sectors on onshore communities could well expand to those communities that may not be considered strictly coastal. The drivers for growth and jobs in the post pandemic economy will need evidence-based policy reforms and investment plans in the Blue economy sectors supporting sustainable economic development. From crisis to recovery: Bulgaria’s transition to Blue economy The outbreak of the coronavirus pandemic has placed substantial pressure on the Bulgarian economy. The GDP contracted by 10 percent in the second quarter of 2020, the deepest quarterly GDP slump on record amid efforts to contain the rapid spread of COVID-19 (IMF Policy Tracker, 2020). The national GVA decreased by 8 percent year over year.6 The biggest drops were recorded
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