Bulgaria Defence and Security Report Q2 2008

Publication Date	May 2008
Publisher	Business Monitor
Product Type	Report
Pages	37
ISBN Number	1749-1304
Product Code	BMI01891

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£425.00
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Summary

For Bulgaria, the success of achieving EU entry at the start of 2007 could soon give way to growing risks to political stability, as the broad government coalition loses a key binding issue. Other key security issues to consider include Bulgaria balancing its commitment towards its Western allies and its traditional ally, Russia. In the second quarter of 2008, the Bulgaria Government announced that it will allow the South Stream pipeline to pass through Bulgaria on its way to southern Europe via the Black Sea. The South Stream project is regarded as the rival to the United States and EU-backed Nabucco pipeline and may be seen as a contentious move by the Bulgarian Government. The Bulgarian Government's decision indicates just how much influence Russia has in the Balkan region.

The Bulgarian defence industry is relatively mature but is having to compete in a fast-moving market.

Bulgaria's ties with NATO led to the trend for defence firms to increase their participation in the modernisation process. According to Defence Minister Vesselin Bliznakov, Bulgarian defence firms are now encouraged to 'actively participate in the tenders and programmes' of the NATO Consultation, Command and Control Agency. The aim is to expedite the interoperability process and, at the same time, strengthen the local defence industry. In recent years the Bulgarian Ministry of Defence has investigated the possibility of privatising state-owned ammunition and weapons firms. In Q208 the Bulgarian Ministry of Defence examined the possibility of privatising the holding company Terem. A successful sale of Terem could see the Bulgarian Government make a profit of US$150.5mn.

Military expenditure is set to increase significantly in the short next one to five years, with the 2007 defence expenditure reaching 2.38% of GDP. NATO regulations stipulate that at least 2% of GDP needs to be spent on defence modernisation. To maintain the increased expenditure, Bulgaria receives assistance from the EU, which has committed some US$8.6bn for defence modernisation. In recent years the United States has financially assisted the modernisation of the Bulgarian Armed Force, mainly through the Foreign Military Fund (FMF). The FY08 FMF funding request stood at US$13.2mn. Bulgaria also benefits from the International Military Educational and Training (IMET) assistance programme. The programme supports the Bulgarian Armed Forces' officer training development. The FY08 IMET request totalled US$1.7mn. It is likely that the support from the US will continue in the near future as Bulgaria has become an important Eastern European base for the superpower.

Content

Executive Summary .........5 Bulgaria Security SWOT........................................................ 6 Bulgaria Political SWOT ....................................................... 7 Bulgaria Defence Industry SWOT.......................................... 8 Security Risk Analysis.....9 BMIs Security Ratings ............................................................... 9 Table: Regional Security Risk Ratings................................... 9 Table: State Terrorism Vulnerability Index ......................... 10 Regional Security: Europe................................................... 10 Overview.............................................................................. 10 International Terrorism....................................................... 11 Criminal Activities ............................................................... 13 Bulgaria Terrorism Risk Ratings .............................................. 13 Bulgaria Physical Safety Risk Ratings ...................................... 14 Bulgaria Conflict Risk Ratings.................................................. 14 Political Overview .................................................................... 14 Domestic Political Outlook....................................................... 14 Security Overview ..........16 Internal Security Situation ........................................................ 16 Table: Regional Insurgent Groups....................................... 16 External Security Situation ....................................................... 17 Bilateral & Multilateral Security Relations .............................. 18 Defence Industry ............20 Armed Forces ........................................................................... 20 Modernisation Programme....................................................... 21 International Deployment ......................................................... 22 Weapons Of Mass Destruction.................................................. 22 Market Overview.............23 Industry Trends & Developments.............................................. 23 Table: Key Players Bulgaria Defence Sector.................... 25 Arms Trade Overview ............................................................... 26 Procurement Trends & Developments ...................................... 26 Industry Forecast Sce28 Army Enlargements................................................................... 28 Government Expenditure .......................................................... 28 Table: Bulgaria Defence Sector Historical Data & For 29 Macroeconomic Forecast Scenario..............................................................................................................30 Table: Bulgaria Economic Activity...................................... 32 Company Profiles...........33 Arsenal................................................................................. 33 Arcus.................................................................................... 34 BMI Forecast Modelling .35 How We Generate Our Industry Forecasts ............................... 35 Defence Industry ....................................................................... 35 Sources ..................................................................................... 36

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Product features / use

Scope	Expert Insight/Opinion
Level	General Industry Strategies
Data	Detailed Market Forecasts
Profiles	Profiles of Key Companies
Features	Contains SWOT Analysis
Extra Info	Consumer Trends Highlighted