2.1. The economic analysis of Silistra Region
2.1.1 The study of ‘Regional profiles: development indicators’ of the Institute for Market Economics
According to the study, in the last 10 year, Silistra region has not managed to attract sufficient external and internal capital, which could stimulate the economic activity in the region and increase the level of occupancy and of income. The geographical isolation of the region and the low living standards are the primary reasons that determine the inhabitants to migrate inside the country. The analysis of the Institute for Market Economics regarding the economic state of the region has reached to the conclusion that Silistra Region has the lowest living standards, measured as GDP per inhabitant – 4.505 leva in the year 2009.
Silistra is the region that attracted the least amount of direct foreign investments in 2010 - only 14 million Euros, in comparison with 2008, when it attracted twice as much foreign capital. In the year 2011, the regional municipalities (Alfatar, Glavinitsa, Kaynardzha, Dulovo, Silistra, Sitovo and Tutrakan) had absorbed nearly 16 million Euros during the EU operational programs, making them rank on the twelveth place among the country’s regions, in relation to the local population.
The business environment is one of the indicators of Silistra region, among other more economically developed regions from the country – for example, Burgas, Veliko Tarnovo, and even Sofia (the country’s capital).
Considering the number of companies related to a thousand inhabitants, Silistra region has 32 companies/1000 inhabitants, making it the next to last of the 28 regions from Bulgaria (along with Montana region), at a short distance from the last one, Kardzhali, and Targoviste region, having 31 companies/1000 inhabitants.
Besides Kyustendil, with a difference of 5.84 Euros, Silistra region is at the bottom of the classification for the value of direct foreign investments in the non-financial district for an average age person (cumulated).
As a summary of the above study ‘Regional profiles: development indicators’, made by the Institute for Market Economics in 2012, we have the following information for the ‘Economics’ indicators in Silistra region:
- GDP per inhabitant in 2009 – 4505,00 leva;
- The unemployment rate (over the age of 15) in 2011 – 13,20%;
- The occupancy rate (over the age of 15) in 2011 – 38,30%
- Companies for each 1000 inhabitants in 2010 – 32,00 leva;
- Annual average income per hosehold in the year 2011 - 2589,00 leva;
- The expenses for fixed assets per 1000 inhabitants in 2010 – 737,37 leva;
- Profit earning capacity for sales in 2010 – 7,20%;
- Annual direct foreign investments in the non-financial district per average age person (cumulated) in 2010 – 117,02 еuro;
- Payments per person from the operational programs per person in the year 2011 – 133,06 euro.
2.1.2 The second edition of the ‘Regional profiles: development indicators’ publication (2013) of the Institute for Market Economics
The negative conclusions about Silistra region from the previous analysis are being confirmed and they are even more serious.
The document of the Institute for Market Economics, that studied the processes from 2012, confirms the fact that Silistra region is one of the least developed in the country, and according to the majority of criteria from above, it is ranked on one of the last places.
The most severe problem is the economy, whose structure is characterised through a larger proportion (a quarter) of the agriculture, as well as low productivity and services.
Silistra has attracted the least amount of direct foreign investments of all the regions of the country. This is probably due to the bad state of the infrastructure and of the insuficiently developed business environment. According to the living standard, it is ranked as the last region in the country, according to the GDP per inhabitant of 4485 leva/person in 2010, which is lower than the same indicator for 2009 – 4505 leva/person, but it’s only 48% from the national average. The economic activity is reduced, the number of businesses for 1000 inhabitants is 32, far from the national average (50). During 2007-2011, the number of companies has increased by 310, but they are mainly micro-enterprises which mostly don’t have hired personnel.
Silistra region has a specific economic structure. Its characteristic is the high share to agriculture, which has a gross added value – 24.6% (the largest share from the country in the year 2011), bigger than the one from the industry (19.1%).
The poor economic activity is somewhat compensated by the relatively good activity of local institutions which attracts funds from the operational programs of the European Union. At the end of 2012, an average of 163.2 leva per inhabitant was attracted, a large value which is still under the national average (171.4 leva/inhabitant).
The region has the largest number of farms (13.500) from the North-Central Region, as agriculture contributes with approximately 18% to the occupancy rate. Every inhabitant gets 14.4 decares of ploughable land, which is the double of this country indicator.
2.1.3 Analysis of the regional economy and the development possibilities of Silistra Region
The analysis was made by SEENews Research&Profiles, a brand of AII Data Processing Ltd, on the request of Bulgaria ON AIR in October 2011.
The work concludes that, when it comes to the smallest average salary, Silistra region occupies the third place after Vidin and Kardzhali. The salaries of the employees with labour agreements from Silistra, are the lowest from the Northen-Central Region, in the first six months of 2011, and in June they increased to 499 leva, compared to 555 leva, which is the average for the region, and the average for the country - 629 leva.
For the most important economic activities from Silistra region, the study reaches to the conclusion that, the largest part of the added value is generated by the services, followed by industry and the agricultural district. The main branches of the industry are:
- The food industry – meat processing and milling;
- Machine building – metal processing machines;
- Construction materials – concrete elements and plywood.
The most important economic agents indicated in the study are the following companies:
Mekom SA – Silistra – meat processing
Kremonini SA – Silistra – meat processing
- Construction materials manufacturing:
Bramak roof systems SRL – Silistra – concrete elements manufacturing
Fazerles SA – Silistra – plywood manufacturing
ZMM Stomana SA – Silistra – manufacturing of metal processing machines
Dunavski industrialen park SA - Silistra
The study has reached to the following general conclusions regarding the economic profile of Silistra region:
- Excellent conditions for the development of cultural and practicable ecoturism;
- It has all the premises for the development of a highly productive agriculture;
- The most used cultures on a large scale are cereals, followed by vegetables. The actual turns for animals play a minor role in the structure of regional agriculture;
- A powerful manufacturing and services concentration in the regional center;
- A yet unexploited potential for the cross-border cooperation with Romania;
- Potential for the tourism development – mainly due to the Danube river and Srebărna Lake;
- The lowest rate of foreign investments of all the country’s regions;
- Small means attracted from operational programs of the European Union.