Discussion Papers 2002.
Regional Challenges of the Transition in Bulgaria and Hungary 78-85. p.
LEGAL FRAMEWORK OF REGIONAL DEVELOPMENT
IN BULGARIA
Boris Kolev
The legal framework
The Constitutional basis for regional development and regional policy is its Art. 20.
According to it: "The State creates conditions for balanced development of the in-
dividual regions of the country and supports the regional bodies and activities by
means of its financial credit and investment policy."
Another very important document is the Regional Development Act, approved
in March 1999 by the National Assembly of the Republic of Bulgaria. On this legal
basis was elaborated a National Plan for Regional Development (NPRD).
General national objectives for regional development
There have been defined several general national objectives for regional develop-
ment. Among them are:
— overcoming of existing regional disparities,
— diminishing the number of municipalities and districts that have attained a
crucial level of poverty, unemployment, depopulation, environmental dam-
age, social and ethnic tension,
— application of a differentiated regional approach to the economic restructur-
ing,
— development of projects for participation in EU programmes for regional de-
velopment and cross-border co-operation.
Responding to the second of these objectives (i.e. optimising the number and
size of the administrative-territorial units), the National Assembly approved a spe-
cial law. According to it the number of districts was increased from 9 to 28. As
basic units of local self-government were adopted 262 municipalities. Six planning
regions were adopted as a spatial premise of the National Plan for Regional Devel-
opment. Each of them includes various number of administrative districts. It's im-
portant to underline that these 6 regions aren't administrative level.
Boris Kolev : Legal Framework of Regional Development in Bulgaria.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 78-85. p. Discussion Papers. Special Issue
Diagnosis of the current state
of the regional development problems
As a result of the natural and socio-economic conditions, there are well-defined
interregional differences in the economic and social level, employment rates, in-
come and living standards. For example the difference between the leading region
and the most underdeveloped one is 1,4 times with respect to income — 2. 5 times
in terms of unemployment rates and 24 times in terms of direct foreign investments
(for the period 1992-1998). The districts of Sofia city, Plovdiv, Bourgas, Varna,
Rousse, Sofia, Lovech, Gabrovo, Blagoevgrad, Stara Zagora and Haskovo play a
leading role in the present period of transition to the market economy. These re-
structuring processes evolve at the lowest place and mark a great number of acute
problems in the districts of Montana, Vratsa, Vidin, Targovishte, Smolyan, Silistra,
Pazardjic, etc. Most of their municipalities have a border-line location in the pe-
riphery of the country. The economic and regional policies in the past aggravated
all these problems of the "centre—periphery". The predominant share of these ter-
ritorial units with their settlement network is located in mountain and rural areas
with mono-structural economy. A typical feature of theirs is the absence of pro-
duction facilities, processing a final product, while the production of agricultural,
forest and mineral raw materials, offered at the domestic market or for export at a
minimum price, is predominant. Another important problem, reflecting on them, is
the demographic situation. The very low natural increase rate, the internal migra-
tion and emigration led to depopulation in certain areas, especially in North-
western Bulgaria, in the rural, mountain and border territories.The Republic of
Bulgaria has recorded a negative natural increase of the population in the recent ten
years. A very serious problem is the ageing of the population in active age. For this
period the emigration has reached about 30-40 thousand people per year. The ma-
jority of the emigrants have been young people. It has to be noted that mainly peo-
ple with high educational and professional level are involved in migration move-
ments.
Other problems are the ecological ones. Many areas confronted with serious en-
vironmental have emerged, featuring a varying intensity of environmental pollu-
tion, as a consequence of the industrial development policy of the near past. These
areas cover about 0.3% of the national territory. The above mentioned ecological
problems have a direct impact on the living conditions and deteriorate the invest-
ment attractiveness of the respective regions of the country.
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Boris Kolev : Legal Framework of Regional Development in Bulgaria.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 78-85. p. Discussion Papers. Special Issue
Principles of planning
The elaboration of the NPRD was based on the following general principles
— good information for the regional economic, demographic, social, infra-
structural, ecological, etc. situation,
— long-term horizons, determined by the future demands of the society,
— compliance with regulations, related to efficient use of the regional factors
and potentials of national and local significance,
— prioritisation, governed by the ranking of the objectives with a view to de-
fining their impact on the undergoing phenomena and processes in a short-
and long-term period in the various regions, as well as, application of an
adequate management of the districts in conditions of local self-government
of the municipalities and shortage of financial, economic and other potentials
— continuity, that is imposed by the provisions of the law for annual reporting
on implementation processes and monitoring of attainment of the set objec-
tives and tasks of the development plans for each region.
It is note worthy that these principles of the regional development policy are
also valid for the elaboration of the plans for the lower planning levels (planning
regions, administrative units as districts and municipalities).
Spatial framework of the implementation
of the regional development policy
The Regional Development Act envisages two types of regions different in content,
spatial scope and functions. They are: planning regions and the so-called areas for
purposeful impact. The second type (areas for purposeful impact) is fixed by an
Act of the Council of Ministers (Government) and in the NPRD. According to this
Regional Development Act the principal functions in the sphere of the regional
development are assigned to the districts. They work out their own plans.
Planning regions
As it was mentioned, the regions of this type are 6 in the country. Single plans for
regional development are worked out for each planning region. These plans are
integrated in the NPRD. They are integral parts of it. Those plans are a result of
local initiative (bottom-up approach).
The planning regions have a diverse natural, socio-economic, demo-graphic and
infrastructure potentials. Their basic parameters by 1999 are as follows:
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Boris Kolev : Legal Framework of Regional Development in Bulgaria.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 78-85. p. Discussion Papers. Special Issue
— The territory of the regions varies from 10,588 sq. km . for the North-western
to 27,552 for the South-central region. The highest share of arable land is to
be found in the North-eastern (58,7%) and the North-western region (58%),
while the mountain areas in the South-western region are above 60% of its
total territory;
— The differences in the number of population range from 585,512 for the
North-western to 2,142,700 inhabitants for the South-western region, half of
which is the population of the capital Sofia. Population density varies from
44.9 for the North-western to 105.6 inhabitants/sq. km for the South-western
region (the national average figure is 73,4 inhs./sq. km .);
— The North-western, the North-central and the North-eastern regions have a
principal economic specialisation in the secondary and primary sectors. The
main specialisation in the southern parts of the South-western, South-central
and South-eastern regions is in the field of ore-mining and forestry. The sec-
ondary sector is developed in the centres of growth and development and the
declining industrial areas. The gravest problems are related to the prospects
for social and economic development of the North-western region and the
southern parts of the South-eastern and South-central regions. The plans for
regional development of individual regions combine the following main di-
rections:
• development of innovative environment and enterpreneurship,
•
development of the technical infrastructure of regional and local impor-
tance (mainly construction and reconstruction of road network, water
supply and sewerage systems),
•
improved living standards for the population (regional and local facilities
in health care, education, social care, environmental protection, upgrad-
ing of the conditions of life in residential areas, work and recreation
zones in the settlements and graviting areas),
• development of new small and medium-size enterprises,
• creation of conditions for alternative employment (mainly elaboration of
projects and programmes related to restructuring of existing activities and
creation of conditions for such an employment in declining industrial ar-
eas),
•
technical assistance (it covers measures and activities related to funding
of regional studies and strategies, plans and programmes for regional de-
velopment, etc.).
These 6 planning regions have been formed to correspond to the regions at level
NUTS 2. The second type regions are, the so called, areas for purposeful impact.
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Boris Kolev : Legal Framework of Regional Development in Bulgaria.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 78-85. p. Discussion Papers. Special Issue
Areas for purposeful impact
This group is defined by the Council of Ministers Decree No 105 of 2 June 1999
for the period of action of the NPRD (years 2000-2006). It covers only some spe-
cific areas of the country's territory, respectively the planning regions. These re-
gions play an important role with a view to create maximum efficiency of the re-
gional policy at a lower level. That's why various kinds of areas of the country are
defined as important and comprehensive parts of the spatial location and applica-
tion of specific measures for their development.
The following types of areas for impact have been defined:
— areas of growth,
— areas for development,
— areas for cross-border co-operation and development,
— areas with specific problems and priorities. This type includes two subtypes:
declining industrial areas and underdeveloped areas).
The total number of areas for purposeful impact is 77. They cover 63% of the
territory of the country and 73.9% of its population.
Areas of growth
The areas of this type have as a centre a large city of more than 100,000 inhabi-
tants. They have an important place in the national economy. Their basic charac-
teristics are: highest rates of economic development, well-developed social infra-
structure of highest rank, established complex technical infrastructure of national
importance. These areas and especially their centres form the skeleton of the set-
tlement network of 1 st rank (Sofia) and 2 nd rank (most of the district centres). Dur-
ing the period of action of the NPRD they will be the factor for accelerated devel-
opment of the national economy. Their main objectives are: attainment of advanced
economic growth with GDP growth twice as high as the country's average; sharp
increase of investment activity.
Areas for development
These areas have as a centre a medium-size town of 30,000 to 100,000 inhabitants,
good and complex technical and social infrastructure of regional importance. This
group includes municipalities, for which the regional centre is at a distance of more
than 50 km versus another centre of an area of growth or for development. These
areas will play an important role for balanced development on regional level. Their
development objectives are: attainment of accelerated economic growth at GDP
growth rate above the country's average; creation of conditions for development of
economic activities; enhancement of the quality of existing human resources in
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Boris Kolev : Legal Framework of Regional Development in Bulgaria.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 78-85. p. Discussion Papers. Special Issue
compliance with the demands of socio-economic development; upgrading and de-
velopment of elements of technical, social and market infrastructures of regional
importance.
Areas for cross border co operation and development
-
-
This group includes municipalities located close to the state borders and munici-
palities connected with them, having potentials for such a co-operation and devel-
opment. The territorial identification of these areas complies with the practice of
the European Union. The objectives of these areas for CBC (cross-border co-
operation), are: opening to the national space; resolution of some cross-border eco-
nomic and transport problems; creation of economic and financial conditions for
economic growth based on existing local and cross-border potentials; implementa-
tion of CBC in economic activities, employment tourism, etc.
Declining industrial areas.
This type of areas includes one or more municipalities with mono-structural econ-
omy in the past, now with bad economic results and growing unemployment.
Grave social problems are anticipated in these municipalities during the period of
action of the NPRD. The main development objectives during this period are:
creation of conditions for utilisation of existing assets for purposes of socio-
economic development; transformation of the economic structure from mono- into
multi-structural; creation of opportunities for alternative employment.
Underdeveloped rural areas
These areas with specific problems include municipalities comprising villages and
small towns. They are with predominantly rural areas or forestry functions. Their
problems ensue from demographic and mono-structural economy, lack of direct
investments, etc. They must realise the following development objectives: to stop
the further decline of rural activities by means of better utilisation of available ar-
able land and other rural potential adaptation to the market-based economic condi-
tions; diversification of the economy based on local traditional activities as rural
tourism, handmade souvenirs and other goods, carpetrary, etc.
The institutional framework
The institutional framework is very important for the implementation of the re-
gional policy. At a national level, there are two main structures responsible for im-
plementation of the regional development in Bulgaria. The first of them is the
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Boris Kolev : Legal Framework of Regional Development in Bulgaria.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 78-85. p. Discussion Papers. Special Issue
Ministry for Regional Development and Public Works, and the second one is the
Council for Regional Development, affiliated to the Council of Ministers. Members
of this structure are deputy-ministers of Regional Development, Agriculture and
Forestry, Public Health, Environment and Waters, Transport and Communications,
etc., Its President is the Ministry of Regional Development and Public Works. In
fact, it is an intraministerial organ. There are formed six commissions in this Coun-
cil for each of the planning regions. There is also a group of NGO such as the Na-
tional Association of Municipalities in Bulgaria, Association of the Danubian Mu-
nicipalities, the Bulgarian Black Sea Coastal Association of Municipalities, many
regional agencies for regional development, etc. There was founded a special Di-
rectorate General to the Ministry for Regional Development and Public Works,
responsible for the harmonisation of the national policy for regional development
and spatial planning with the Aquis Communautaire of the EU regional reglamen-
tations. There is no special unit organising co-ordination the national regional pol-
icy and spatial planning with the neighbouring countries till now.
The fmancial framework
The general requirements govering the elaboration of a special financial plan for
the needs of the regional development are the implementation of an approach that
could ensure application of the available variety of financial mechanisms among
the different funds and sources. In this aspect there are two special programmes:
— Programme for development of the CBC,
— Programme for development of the planning regions.
The first of these programmes will finance activities related to the construction
of new border cross points and measures ensuing from Regulation No 3760/1998
of the European Commission.
All financial funds necessary for the implementation of the second programmes
include two types of sources: national and foreign. The national sources are: sub-
sidy from the state budget; non-budgetary funds and organisations; local budgets,
trade companies; bank loans and private funds. The foreign are: EU programmes
and funds (ISPA, SAPARD, PHARE, etc.), state guaranteed credits and free aid
from abroad. The total amount for the period of action of the NPRD (2000-2000)
is 1.146 billion EUR from which capital costs 1.078 billion EUR and current ex-
penses — 67.4 million EUR. The following proportions are defined in the frame-
work of the national financial plan for regional development:
— 50% should go to the areas of growth and areas for development,
— 20% should go to the declining industrial areas and underdeveloped
— rural areas,
— 20% should go to the areas for CBC and development and
— 10% are for the rest of the regions.
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Boris Kolev : Legal Framework of Regional Development in Bulgaria.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 78-85. p. Discussion Papers. Special Issue
In accordance with the requirements of the Regulation for the European Struc-
tural Funds a current and follow-up financial control on the expenditure of funds
and the processes of implementation of all plans, programmes and projects will be
taken up by the Ministry of Finance of Republic of Bulgaria.
Finally, all state officials and experts have expectations that this first attempt for
elaboration of a new modern regional development and policy will be successful.
References
Council of Ministers Decree N 105/02.06.1999 for approval of Regulations for the criteria
to determine the districts for purposeful impact and their territorial range. The State Ga-
zette, N 53/1999, Sofia
Geshev, G.—Kolev, B. 1998: Comparative Perspectives of Spatial Development and Planning
in Bulgaria. In Proceeding of the First ESTIA Project Meeting. Thessaloniki, 16-17
Oct. 1998.
National Plan for Regional Development. Sofia, 1999.
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