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Bulgaria Enlarges Its Airspace, Balkan Militaries Expand

(Balkanalysis.com Research Service)- New NATO member and Washington favorite Bulgaria is taking the lead in establishing “a common air defense network” with its western neighbors, Albania and Macedonia.

As it aspires to NATO membership, Macedonia has been told to scrap its few fighter planes, in favor of its somewhat less fearsome helicopter fleet. And one of Albania’s “flying coffins,” an antiquated, Chinese-made MiG, crashed and burned the other week in Tirana. So that leaves only one contender.

On Friday, Bulgarian defense minister Nikolai Svinarov announced that the decision had been reached following his meeting with counterparts from the two Balkan states. According to an anonymous “expert,” this means that Bulgaria is “…effectively extending its current system across the airspace of its two neighbours” – hardly a reassuring thought for Macedonians who remember well from the previous century of wars the fondness their eastern cousins have  previously for their land.

For his part, Macedonian defense minister Vlado Buchkovski restated his ardent appreciation of Bulgaria’s counsel and support. According to the Macedonian Information Agency, Buchkovski rose to “…commend the support and remarkable cooperation of the Republic of Bulgaria whose successful story motivate us to endure in fulfillment of our goals. I am convinced that our Bulgarian friends will continue to support the open door policy and will unselfishly share their experiences and expertise from the NATO integration process with us.”

Bulgaria, which is eager to host US military bases as the Bush Administration continues with its strategic relocation program, is upgrading its current air defense system with help from the Americans. According to News24, the country will also be modernizing its 20 MiG-29 warplanes and 36 Mi-17 and Mi24 helicopters.

One day before the Bulgarian air network plan was announced, the five Nordic countries came out with a plan to help modernize the militaries of Croatia, Macedonia, Bosnia, Albania and Serbia-Montenegro. Danish defense minister Soeren Gade stated that this will involve “seminars on modernizing those countries’ armies,” reports the IHT.

Following its successful NATO accession, Bulgaria’s relations with Western defense contractors have solidified. Memorandums of understanding in the area of air defense were signed last week with Britain’s BAE Systems and Gripen, a joint British-Swedish company.

But in points eastward, Bulgaria ran into a controversy last month when it was accused of gunrunning by Edward Kokoity, self-declared president of the autonomous Georgian province of South Ossetia. According to Kokoity, “…Bulgaria is steadily supporting [the] Georgian army, supplying it regularly with weapons and ammunition.”

His side claims that almost all of shells used by the Georgian army against their positions were manufactured in Bulgaria. The Russian daily Komsomoletz had claimed in early August that an “impressive” quantity of 2,500 boxes of mortar shells, “enough to destroy all Ossetian arsenal,” was transferred from Bulgaria to the Georgian port of Poti – and thereafter used on the Ossetian rebels. While not denying the transaction outright, Bulgarian officials claimed that the number of weapons involved was considerably less than what the indignant Russians had claimed.

The big unknown for Bulgaria’s military has to do with the increasingly unpopular mission to Iraq. Troops in the field are getting edgy, now that deeply symbolic Islamic religious holidays are almost upon them. Defense Minister Svinarov has announced a Nov. 9 meeting to discuss possible redeployment with American counterpart Donald Rumsfeld – provided the latter holds on to his job following the US presidential elections expected to be held one week before.

As a NATO hopeful, Macedonia must count on the backing of established members of the club. Earlier this month the leaders of Turkey – one of Macedonia’s strongest allies- reiterated their support for the country’s bid, and Vecdi Gonul, the Turkish Defense Minister, was warmly received on his official visit to Skopje.

As a NATO member, Turkey is becoming increasingly important to American interests: according to UPI, bases are to be shut down in Italy and Greece to make room for one in the more strategic port of Izmir:

“…Reflecting its changing geostrategic priorities, NATO’s Joint Command Southeast in Naples, Italy, has been deactivated and Component Command Air Headquarters-Izmir has been activated. Further drawing down the NATO presence in southern Europe, NATO’s Joint Command SOUTH in Verona, Italy, and its Joint Command SOUTHCENT in Larissa, Greece, have also been decommissioned. Izmir’s municipal authorities are salivating at the prospect of the imminent arrival of 1,000 affluent foreign families.”

According to AFP, a high-level meeting held between the US and Turkey last week was designed “…to seek ways of increasing global and regional military cooperation.” An unnamed embassy official told the agency that the purpose of the meeting was not to win permission for the deployment of warplanes at Incirlik Air Base, but rather “…to discuss broad issues of Turkish-US cooperation, such as NATO, new threats, the struggle against terrorism, ways in which Turkey and US can increase cooperation in the region such as the Caucasus, Afghanistan and Iraq.”

Balkan Gold: Intrigue, Enrichment and Danger (Part 2)

By Christopher Deliso

The protests seen this week in Bulgaria (and documented in part 1 of this article) were not the first of their kind, and will certainly not be the last. In February 2000, the Romanian Baia Mare gold mine suffered a cyanide leak, which killed thousands of fish in the Tisza and Danube Rivers. It swiftly became an environmental disaster for Romania, Bulgaria, and especially Hungary and Serbia.

While the Australian owners of the mine, Esmeralda Exploration, were quick to deny any wrongdoing, local residents burying thousands of dead fish begged to differ. Serbia’s Environment Minister at the time, Branislav Blazic said it would take “at least five years” for the river to recover: “…the Tisza has been killed. Not even bacteria have survived… this is a total catastrophe.”

The next month, the Australian company went into receivership with undisclosed debts. Hungary and Serbia threatened lawsuits against both Esmeralda and the Romanian government, which owned 45 percent of the mine. The latter flatly rejected the possibility of compensation for what was called Europe’s worst environmental disaster since Chernobyl.

However, four months later, the mine reopened with Esmeralda claiming a new devotion to environmental safety. New modifications to the physical structure of the mine and smelter were announced – after it had been revealed that at the time of the accident they were not up to EU standards. Indeed, according to a damning report from Greenpeace, the warning signs that such a disaster could occur had been apparent well before the time when the accident took place. The Australian company had been negligent in living up to its responsibilities, the report charged.

After having been suspended from the Australian stock market in March 2000, Esmeralda was re-instated in the end of 2001, with legal cases begun earlier that year against it in limbo. In the interim, however, it had been able to get back to work, continue to turn a profit, and so repay some outstanding debts to NM Rothschild & Sons and Dresdner Bank AG.

The company was able to later flee the bad PR with a quick name switch. Reincarnated as “Eurogold,” the Balkan’s biggest polluters were soon able to get back in action and further capitalize on their monopoly position in Romania. In 2003, the company released an updated report on its activities in Romania. The only mention of the disaster was in small letters at the very bottom, when Romanian subsidiary Transgold was named as

“…the subject of various claims arising from a tailings dam breach in January 2000. Eurogold is confident that the eventual outcome of these proceedings will have no substantial bearing on Transgold’s financial position.”

According to the Rainforest Information Center, an Australian environmental group, gold extraction using cyanide – “heap-leaching, as it’s called” – has helped fuel a boom in the gold mining industry over the past decade. Only problem being that this method has inevitable and catastrophic environmental effects for the whole area in which it is used.

Meanwhile, the world’s biggest gold mining operation, Denver-based Newmont, recently purchased 19 percent of the Toronto-based Gabriel Resources Ltd.- something which caused this aspiring Balkan investor’s stock to rocket by 48 percent overnight.

Gabriel has its sights set on Rosia Montana, a mine project located in the heart of Romania’s historic Transylvania region. According to the International Herald Tribune, the controversial project

“…will require the relocation of 900 villagers and heavy metal waste has already polluted some valleys and rivers. The company said it was satisfied after ‘performing extensive due diligence’ at the Romanian site that ‘environmental and social responsibility standards’ were being met.”

Romanians disagree. On August 28 a symbolic march wrapped up in Bucharest, which saw local protesters as well as environmental activists from Austria, Germany, Ireland and France cover 140 km in 6 days. Starting in the northwestern city of Cluj, the marchers continued to Rosia Montana and passed through 20 affected villages on their way to Bucharest.

The protesters object to a plan that would not only “…rip out a swathe of the mountain range,” but also force the relocation of almost a thousand people.

The project is under fire not only from environmentalists, but from archaeologists and historians too. Even Prime Minister Adrian Nastase and other top Romanian officials have expressed unease with the plan. Now, the company has stated delays will force it to begin work next May. However, buttressed by the lobbying muscle of a heavy hitter such as Newmont, Gabriel will probably be able to steamroll the protesters’ objections in the end.

Yet could tragedy similar to the Baia Mare affair happen again? It just has.

On September 4th, at yet another Romanian gold mine – the Baia Borsa – a pipeline gave out, causing the release of toxic heavy metals into the Cisla River. The disaster caused neighboring Ukraine to cut off water supplies to 5 towns. A local television station advised hospitals to store drinking water for 3 days in advance. Residents were also warned not to fish “for the time being.”

It becomes hard to argue with the idea that the Balkans are exploited for their riches and left as a waste dump, just so that greedy foreign corporate bosses can fatten their wallets.

In every corporate report one reads, the concepts of efficiency and comprehensiveness are stressed insofar as exploration techniques go. What the Romans did only patchily, what antiquated technologies could unearth only in spots, all of this failure is a boon for modern corporations.

Yet the dream of globalization is far from the one that has always captivated the imaginations of treasure-seeking individuals, fired with the excitement of the hunt, the thrill of discovery, the salvageable sadness of coming up empty-handed. After all, even if one tries his luck and comes up with nothing, there’s always next time.

Industrial excavation, on the other hand, leaves little room for singular thrill. And the price of its “success” is often too high, as the Romanian river disasters clearly show. Yet in a battle between Balkan villagers and global giants, there’s not much doubt as to who will win out.

In the end, the Macedonian superstition about bad luck tormenting the treasure-seeker seems to have come true – but on a global scale – with the mining industry today.

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Balkan Gold: Intrigue, Enrichment and Danger (Part 1)

By Christopher Deliso

A long term Canadian investment in Bulgaria’s gold excavation industry was threatened this week by local outcry over perceived environmental hazards. This controversy is far from the only one to have affected those hunting for hidden gold in the Balkans, though.

“I believe in an old superstition,” said one Macedonian man in Skopje, “that if you dig in the ground and find old treasures, and remove them, it will be followed by a huge amount of bad luck. So I am not interested in searching for them.”

However, this has not stopped Macedonia’s would-be conquistadors of the alluring ore. In recent months, Skopje papers have been full of classified ads from individual selling metal detectors – and promising “certain” results for their new owners.

The area said to hold most promise lies between Kratovo, Kriva Palanka and the Bulgarian border, in the rocky Osogovski Mountains. In ancient times and up through the Ottoman period, the Kratovo area was the fabled center of gold and silver mining in Macedonia.

Yet despite the popularity of panning or electronic detection of gold among the people, as well as the unfortunate penchant for antiquities theft from Macedonia’s many unexplored archaeological sites, critics say that most metal detectors on the market are of limited use, as they detect from too wide a geographical range and cannot detect metals hidden far beneath the surface.

That’s why the professionals use more sophisticated methods. According to a Kumanovo man whose family hails from a Kratovo-area village, a mysterious helicopter was spotted circling a remote area in the mountains. Kratovo locals recently backed up the claim, telling Balkanalysis.com that a large area has been declared off-limits following positive tests for metals using high-tech airborne equipment.

However, there was some confusion among the sources on whether the company involved was Canadian, German or from somewhere else – and on whether the area of interest was indeed a gold mine, or perhaps an unknown archaeological site.

In any case, there was agreement that something is going on in the wilds of eastern Macedonia- and that those involved are doing their best to keep it quiet.

Who could be interested in Macedonia’s subterranean riches, if anyone? The answer to this little mystery will be unearthed, so to speak, in time. For now, we can concentrate on the known, that is, what is going on in Bulgaria. The scheme and scenario at work there are no doubt bound to be analogous to whatever is going to happen in Macedonia – indeed the rumors are true.

Reacting to widespread protests from Bulgarians in the southern city of Krumovgrad, Canadian gold mining company Dundee Precious Metals promised that its excavation of local mines will be done “under the European ecological standards.” The company has been exploring the Eastern Rhodope area of Bulgaria for the past four years.

The public outcry over possible pollution has led Jonathan Goodman, the company’s President and CEO, to announce the writing of a special report on “the influence of the company’s work on the environment in the region.”

Whether this mollifying tactic will work remains to be seen. It will largely depend on whether the Bulgarian people will trust this foreign investor- which is itself doubtful. The mining and smelting industries are among the world’s most reviled in terms of safety and public health concerns. Last week, some 4,000 Peruvian workers went on strike to protest pollution and water shortages caused by Latin America’s biggest gold mine.

The story of Dundee’s involvement in Krumovgrad begins in 2000, when subsidiary Balkan Mineral & Mining AD was awarded an operating license for the area.

According to the company’s projections, the Bulgarian operation will begin in 2006. Dundee plans to invest $45 million, and will hire almost 300 people.
Dundee also owns the Bulgarian Chelopech gold and copper mine and Ada Tepe, where exploration for gold is underway. A total of $150 million is to be invested in these central and southern Bulgarian sites, says Novinite.com.

A detailed explanation of the state of mining affairs in Bulgaria reveals that “…in recent years there has been a drive to privatise the industry and now virtually all mining operations are in private hands.” This has been expedited by 1990’s legislation that replaced long-antiquated Soviet rules governing mining. Bulgaria has for thousands of years been an important Balkan center for not just gold but copper, iron, steel, lead, silver and zinc, as well as coal.

Since “there are no restraints on foreign investment” in the mining sector, foreign companies have been able to make strong inroads into the gold mining industry.

According to the report, the necessary prospecting permit is awarded directly or by tender or auction, and is valid for 3 years, “…with a maximum of two further extensions of two years each possible.” If a deposit is found, the necessary  extraction concession is then granted to the permit holder. Extraction concessions “…are valid for a period of up to 35 years, with an extension of 15 years possible.”

In late June, Dundee issued a press release on the results of its large drilling project at the site of Ada Tepe, Krumovgrad. CEO Goodman stated that “…we are extremely excited with the results of the infill drilling programme at the Ada Tepe Project to date. The deposit is holding together very well and the high grade zones appear to be stronger than we had originally thought.”

However, despite the president’s optimism the Bulgarians seem justified in their fears of potential environmental mayhem – as we will see in part 2 of this article tomorrow.

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Bulgarian Mom Blames US for Son’­s Death, Danger Remains for Iraq Contractors

(Balkanalysis.com Research Service)- The mother of a Bulgarian contractor beheaded in Iraq is blaming the US for her son’s death, reports Novinite.com. The death is only the latest in a wave of killings that is making countries involved reconsider their presence in Iraq.Interviewed on Bulgarian radio, Maria Lazova, mother of murdered driver Georgi Lazov, wept, accused the Americans, and demanded, “what are our boys still doing in Karbala?”

Bulgaria has 480 soldiers in Karbala and has been one of George Bush’s most steadfast allies throughout the quagmire. Colin Powell rushed to praise Bulgaria for keeping its troops in place, pointedly contrasting it with the Philippines. But Powell’s rhetoric was more than nauseating. According to him, “the Bulgarian government and people have remained firm” in the face of the hostage threats:

“…they would not be intimidated by kidnappers, they would not be intimidated by terrorists… they did not walk away from the challenge that they are helping us meet.”

Lazov and fellow driver Ivaylo Kepov were kidnapped on June 29 near Mosul. An Iraqi group “affiliated with al-Zarqawi” demanded that Iraqi detainees be released in exchange for the Bulgarians’ release.

Now, Bulgarian officials are trying to determine whether other remains found on Wednesday near the town of Beiji, on the Tigris River, may be those of Kepov.

As with all the other previous beheading victims, the decapitated body was found wearing an orange Abu Ghraib-style jumpsuit. Along with the still unidentified body was a head in a sack.

Contractors like Lazov and Kepov make particularly easy pickings for the kidnappers. According to the Associated Press:

“…Many of the nearly 70 people taken hostage in Iraq in recent months are truck drivers who haul cargo for private companies — work that is vital to normalizing Iraq’s postwar economy. The truckers are easy targets compared with the thousands of other foreign contractors in Iraq, many of whom work in critical service jobs with the U.S. military or on reconstruction projects.”

Considering the steadily worsening security situation in Iraq, it seems only a matter of time before other small Balkan nations suffer such unfortunate atrocities as well. Macedonia in particular, which has hundreds of contractors in Iraq and neighboring states, could prove susceptible. And a country which is ten times the size, Romania, is even more conspicuous with its 700 soldiers and contractors in Iraq.

Indeed, the contracting experience for natives of poor country is markedly different from that of “Top Gun” Americans such as this week’s Afghan vigilantes. Of the most recent hostages kidnapped, two were Kenyans, three were Indians and one an Egyptian. A third Kenyan was shown yesterday on a video broadcast together with the six others.

One of the Indians was shown protesting that “…KGL (Kuwait & Gulf Link Transport Co.) sent us by force to Iraq. Now they (the captors) have caught us. They say we are siding with America.”

After peaking in September 2003 and January 2004, the company’s stock has slid since March. While hardly news, revelations of indentured servitude among poor contractors can’t be good press for Kuwait’s largest shipping company.

Now, however, there are signs that the company may acquiesce to the kidnapper’s wishes and pull out of Iraq. An Indian report of Friday midday quoted Abu-Zaineh, the manpower planning manager for KGL, as saying “…the most important thing for KGL is that the seven people arrive in Kuwait safely and talk to their relatives, whatever that takes.”

Bulgaria All Set to Join the EU, Probably

By Christopher Deliso

Bulgaria’s completion of membership negotiations with the European Union on Tuesday has paved the way for its entrance into the EU on January 1, 2007. Having jumped this hurdle, there remains only the EU Accession Treaty (to be signed next spring) as the last major bureaucratic formality for Sofia’s joining up with the bloc.

Nevertheless, the EU has reserved the right to defer the entrance if it feels the country is not quite ready by that time.While the EU had agreed on a dual admittance of Bulgaria simultaneously with its neighbors to the north in Romania, the latter is still working on completing its negotiations.

An indignant Bucharest lashed out “unexpectedly” today at the news of Bulgaria’s speedier negotiations, with Foreign Minister Mircea Dan Geoana dismissing them as unnecessarily hurried. However, it has been known for months that Romania was lagging behind in finalizing all parts of the negotiations, and in the view of the EU, the Romanians have been given fair warning. While Bulgaria closed the final 2 of the agreement’s total 31 chapters by Tuesday, Bucharest has still 7 to finish. The latter is still expected to enter together with Bulgaria, however.

Brussels has offered considerable financial aid to Bulgaria (4.4 billion euros from 2007-2009), and on Monday upped this amount by almost 240 million euros. However, Bulgaria’s net benefit will be somewhat smaller, reports BNN, “…because part of the funds will flow in later and the country will have to pay 303 million euros to the bloc in annual membership dues.”

Bulgaria has enjoyed a considerably greater reversal of economic fortunes than have its EU-aspiring Balkan neighbors. The government points to reduced unemployment, tourism gains, increased GDP and other improvements. The IMF has voiced cautious optimism in its latest report.

The government has continued an aggressive marketing campaign to outline opportunities in the country for foreign businessmen. On Monday, 7 major Bulgarian companies were added to the ranks of the European Business Congress.

The country’s national film industry is now set to be privatized, hoping to attract foreign investors with a 95 percent share offering. The long-deferred privatization of state-owned tobacco monopoly Bulgartabac is said to be going “according to schedule,” with a strategy report to be concluded soon and the tender process to begin in July. And the government plans to offer concessions for energizing investment, up to 130 million euros, for developing key airports in the Black Sea tourist hubs of Varna and Burgas.

While these promising signs, as well as the completion of negotiations- some six months earlier than had been anticipated- provided reason for cheer, there remains work to be done. Outstanding reforms still to be completed fall across many sectors, including judicial, administrative, and environmental. Meat and other food processing plants must be upgraded to EU standards as well. And wine producers have their own responsibilities, which some believe cannot be fulfilled so quickly.

And, despite the broad economic growth (5 percent annually anticipated for the next 3 years), some fear that the Bulgarian economy will have to be restructured for EU accession to be realized. UPI reports that inflation jumped from 6.1 to 6.8 percent between April and May, and argues that growth, “…is sucking in imports. The trade deficit last year was 12.5 percent of gross domestic product. Economists do not expect the deficit to contract significantly in the next two years.”

According to BNN, Prime Minister Simeon Saxe-Coburg Gotha pledged that “…from now on the Bulgarian society will live under European laws and rules and this must apply for all citizens.” However, there is still the reality of pervasive corruption and organized crime in Bulgaria.

Car rental agencies in neighboring Macedonia and Greece usually don’t allow their vehicles to enter Bulgaria, due to its reputation for theft. Powerful mafia bosses controlling the drugs trade have resumed a “turf war” this month, resulting in Godfather-style gun battles and assassinations. The most bizarre saw 2 gunmen dressed in the black robes of Orthodox priests killed 3 and injured 2 in downtown Sofia on June 4.

Earlier this month a major counterfeiting ring was busted, with Europol sweeping across 50 locations in the country and seizing 95,000 euros worth of fake cash.   According to Europol Director Juergen Storbeck, the counterfeit bills were so expertly done that major banks would even be fooled by them. Calling Bulgaria a “major center” for European counterfeiting, Storbeck also claimed that “…more than 400,000 travellers’ cheques, fake visas for the United States, Canada and Greece, false passports and counterfeiting software were also seized.

The Bulgarian Interior Ministry attests that 18 counterfeit printing operations have been discovered since 2001 alone. Police as far away as the FBI in Las Vegas have been kept busy with detecting the artful work of the Bulgarian gangs. This week the American Secret Service and FBI announced plans to open for business in Sofia.

The government has long been equated with cronyism and corruption, and its infamous arms industry has also been plagued with scandals. It was embarrassed recently when Gen. Dimitar Vladimirov, head of the National Bodyguard Service, had to fire 10 of his men– for moonlighting as mafia men in their spare time.

Theoretically, it is still possible that Bulgaria’s actual entrance date into the European Union may be deferred, if it cannot follow through on time with “…commitments it has made during the accession talks,” according to Foreign Minister Simeon Passy. One of the most important of these commitments, reports BNN, “…includes early closures of two Soviet-designed reactors at the country’s only nuclear power plant.” The reactors are set to be closed in 2006 and are subject to “a special protocol” in the EU membership negotiations, said Passy.

It was precisely the issue of this “safeguard clause” that provoked the Romanian government to criticize Sofia for its alleged “rashness.” The essential value of the stipulation, for the EU, is to ensure thatthe aspirant countries stick to their reforms and complete them on time. As its negotiations with the 25-member bloc are now sluggish, Romania feels somewhat vulnerable. However, it is likely that all things considered, Bucharest will have to go along with whatever clause the EU and Bulgaria decide.

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Ideas, Enthusiasm Fuel Bulgaria’­s Tourism Growth

By Christopher Deliso

Recently welcomed into NATO, and preparing for EU membership in the next few years, Bulgaria continues to take major steps forward in its remarkably quick transition from Sovietization to Western capitalism.

Although a large part of its success has to do with good geographical fortune (i.e., not suffering from growth-retarding war, as have its West Balkan neighbors), Bulgaria has also embarked on a genuinely progressive and proactive marketing and publicity campaign to entice visitors and foreign capital from the outside world. And there are clear sign that the hard work is paying off.

A major difference from its neighbors is the Bulgarian government’s involvement with overseeing the process. A nationwide contest was recently held by the government to choose a new national slogan for a worldwide marketing blitz. The winner, reports Novinite.com, was “Get Involved,” thought up by 2 young Bulgarians, Dimitar Gavanski and Assen Petrov, who were “…victorious among more than 500 participants.”

Speaking at the official ceremony on Friday, Prime Minister Simeon Saxe-Coburg noted that the wide enthusiasm for participating in the contest included not only Bulgarians at home but also those from the diaspora.

While this was a positive indicator of national enthusiasm and some degree of governmental foresight, the slogan contest was not the most ingenious recent idea that will translate into tourism-based prosperity. An ambitious project of associating the country with mythical and cultural figures, as well as one symbol from Western popular culture, shows an increasing sophisticated understanding of how to appeal to deep-pocketed Western tourists.

The promotion will include re-appropriating the ostensibly Greek Orpheus and Dionysius, as well as a “myth-based ballet” by former gymnastics coach Neshka Robeva, and most important of all, the Harry Potter cottage industry.

The perhaps surprising first part of the strategy has been bolstered by the recent discovery of an ancient temple in Bulgarian Thrace that Bulgarian archaeologists believe to have been venerated as the burial place of the renowned musician Orpheus (though this has not been confirmed definitively).

As for Dionysius, archaeologists excavating in the Rhodope Mountain village of Perperikon claim to have found the sanctuary of the ancient god of wine and sensual delights. According to head archaeologist Nikolai Ovtcharov, “…this sanctuary in the Rhodopes is as important as that of Apollo at Delphi.”

According to ancient historians and legend, Alexander the Great was told by the oracle of Dionysius that he would be the “master of the world” before his Asian campaigns, and where the father of Octavius (the future first emperor of Rome) learnt of his son’s illustrious fate. Ovtcharov also argues for the theory that that the popular traits and powers of Dionysius “…in fact come from the Balkan legend of the god Zagrei.”

Finally, the upcoming fourth installment of the wildly successful film series (”Harry Potter and the Goblet of Fire,” due out in October) “…has been enriched with the landmark personality of quidditch team head Viktor Krum, whose imagery background is Bulgarian.” According to Novinite.com, the idea was hit upon immediately in March, “…when it became known that a Bulgarian boy would play the role in the next blockbuster.”

Parents and teachers regularly bemoan the apparent fact that the younger generations hardly bother to read any longer, their lives oversaturated with computer games and television. Yet the millions of readers, many of them children and teenagers, who were enthralled by J.K. Rowling’s magical world of wizards in the guise of English public schoolboys changed all that.

Now, the Bulgarians feel a considerable fortune has fallen into their laps. The character reference to Khan Crum, one of Bulgaria’s most famous medieval rulers, has rescued the warlord from the dusty prison of academic books. At least peripherally, the film may increase general awareness of Bulgaria as a nation and historical state. And perhaps a few young readers/viewers will develop a more avid interest in exploring the country’s history. It would not be the first time such a thing has happened.

For the Chief of National Tourism Advertising and Information Agency, Ivaylo Gyurov, the strategy aims to “stir the attention” of residents of Bulgaria’s typical market- Slavophone countries such as Russia, Ukraine, and the Balkans. But considering the free marketing boost the country will get from the Harry Potter franchise, it may well help in the much richer Western market.

Indeed, Western interest in the country as a tourist destination has increased considerably over the past few years. British retirees who used to look to Greece or Spain for seaside villas have now been attracted to Bulgaria, as prices are considerably lower there than in the EU states. Scores of websites run by British estate agents attest to the growing demand. More general Bulgarian tourism websites in the English language also abound.

According to statistical data from the World Tourism Organization, “…the number of tourists from the European Union (EU) coming to Bulgaria went up by 48.2% over the first four months of the year.” The Greek “import” market has been particularly strong, increasing by 50 percent- a total of 221,321 people. Tourism revenues have also increased over the first two months of 2004, by 30 percent on average. While the Bulgarian government has gotten into the habit of trumpeting its successes on a quarterly basis, it’s hard to find the same dedication from neighboring states. Macedonia, especially (which deceptively considers any foreigner who spends a night in the country to be a tourist), has a woeful record for wide publicization of its statistics (probably because they are not particularly auspicious).

More examples of creative vision from the Bulgarians include scenic rail tours in retro-fitted vintage train cars, the oldest being a steam-powered train dating from 1934. The tour, which takes in Sofia, Plovdiv, Bachkovo Monastery and more was recently tested on 56 Spanish tourists. Organizers are expecting 350-400 more Spaniards to see Bulgaria by rail before the season’s end.

Another sector of growing importance, health/spa tourism, has been targeted by 7 Bulgarian tourism organizations which recently provided market research detailing why they should develop this side of the industry. While Croatia, Poland and the Czech Republic currently are among the most “preferred health tourism destinations” in the region, they believe Bulgaria- with its plethora of wooded mountains, lakes and seaside- has potential in this area. Statistics forwarded point to the need to target the over-50 market. Forecasts indicate that by 2010 “…the number of tourists using that kind of tourism services will go up by 75 percent.”

The government has also taken its show on the road rather successfully. Appearances at major trade fairs across Europe have highlighted Bulgaria’s visibility abroad. The country is quickly advancing into the upper echelons of the promotions business among Balkan countries, far above countries like Albania, Macedonia and Serbia.

For example, visitors at this week’s tourism fair in Skopje were laden down with not one but 8 glossy booklets on subjects ranging from wine tourism and hunting to health spas, conventions and museums, in addition to Black Sea destinations such as Varna. The booklets come replete with excellent photographs, important data, logistical information and interesting vignettes.

Most remarkably, the standard of written English is not even that bad by Balkan standards. This is in contrast to neighboring Macedonia, which suffers a dearth of quality promotional material. Glossy booklets produced by Macedonian tour operators are almost completely devoted to “export” packages- to places like Egypt, Tunisia and Turkey.

All things considered, Bulgaria’s steady advance as a desirable tourism destination owes to more than just its atmosphere of guaranteed peace and its rich environmental variegation. It also owes to creativity, cleverness, and enthusiasm- all vital intangibles in the development and sustenance of a dynamic tourism industry.

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Bulgaria To Become Regional Air Leader Amid Privatization Plans

(Balkanalysis.com Research Service)- As Bulgaria’s European integration program grows ever stronger, the country is trying to cement its status as a regional transportation and tourism hub. New international investment interest shows that this plan is bearing fruit, while the World Tourism Organization lauds Bulgaria’s recent successes as a tourism draw.

On 21 March, the Sofia Morning News reported that the German government will back Bulgaria’s efforts to become “…a regional centre for air traffic control.” This likelihood received confirmation over the weekend with the visit of Bulgarian Minister for Transportation Nikolay Vassilev to Germany. Vassilev met with his German counterpart, Manfred Stolpe, who suggested that German air traffic control experts visit Bulgaria soon to follow up on the details of the proposal.

It comes just as Bulgaria is upgrading its air traffic control system to conform to standards set by the European Organization for the Safety of Air Navigation (EUROCONTROL). An Italian company, Alenia Marconi Systems, is responsible for providing the new system, which underwent preliminary trials earlier this month. According to the report, Italy’s work here comes “…due to its interest in the privatisation of Bulgaria Air.”

More specifically, the Italian air carriers Air One and Volare have shown “considerable” interest in the state-owned Bulgaria Air, which is set to be privatized. This interest was reiterated in Monday’s meeting between Transport Minister Vassilev and Italy’s Adolfo Urso, deputy minister for Productive Activities. In addition, enhanced connections on existing routes are also being sought. According to Urso, Italian flagship carrier Alitalia wants to have 4 regular weekly flights between Sofia and Milan. Bulgaria Air also is planning to launch Milan-Sofia flights as well, says Vassilev.

However, there are some holdups to progress. There are fears that Sofia Airport’s construction of a new runaway “is facing a break off.” Ironically, Bulgaria is feeling the backlash here from America’s trade war with the EU, which among other manifestations has included the dollar’s devaluation over the past year or so. Now, the contracting Kuwaiti-Arab consortium wants to revise the contract, “…since it was signed in March 2003 at a considerably higher US exchange rate.” The dollar has fallen from 2.20 Bulgarian leva to today’s 1.50 leva- meaning a big loss for the funders.

The consortium is made up of Kuwait’s Mohammed Abdulmohsin Al-Kharafi & Sons and the Arab Admak General Contracting Company. The former is run by Nasser Al-Kharafi, an industrialist perennially on Forbes’ list of the world’s richest people. The Bulgarian venture is not the Al-Kharafi’s first tourism/transport project. According to the magazine, Nasser and elder brother Jassim are “…trying to woo European tourists to their Disney-esque Port Galib on Egypt’s Red Sea coast, a project estimated at $2 billion.”

Kuwait has had long-term involvement with Bulgaria’s transport infrastructure. The Kuwaiti Fund for Arab Economic Development gave a $40 million loan in 1998 to build a new runway for Sofia Airport. This agreement was amended in May 2003 with the inclusion of “preparatory works and consultancy services,” inflating the loan amount to 40.078 million euro.

Yet the funds and thus work progress have been slow in coming, the government only ratifying the amended agreement in January 2004, resulting in the release of the first $1,700,000. But the problem of contract resolution spurred by the currency drop has yet to be resolved. Transport Minister Vassilev is expected to get negotiations underway on his visit to Kuwait next month.

Detailed descriptions of the planned Sofia Airport refurbishments can be found here.

The government has high hopes for the Bulgaria Air privatization. It is set to begin after parliament approves a strategy. Although a document regarding it was submitted to the Economy Ministry five months ago, reports the Sofia Echo, “…it has not yet been discussed.”

And while privatisation experts fear the process could take “many months,” “…the longer the period the better the chances of Bulgaria Air to become even more attractive [to foreign investors]. Last week, the Transport and Communications Ministry allowed the air carrier to lease more planes in order to meet increased demand from passengers.”

Bulgartabac Privatization Gets Back On Track

(Balkanalysis.com Research Service)- According to a report Friday from the Bulgaria News Network and the Ministry of Economy, yet another multi-national- Britain’s Gallaher Group– is eyeing Bulgaria’s tobacco monopoly, Bulgartabac. The other four potential bidders, who announced their intentions last summer, are UK tobacco giant Imperial Tobacco Group, Korea’s KT&G and British-American Tobacco, together with Altria’s Phillip Morris.”I am pleased with what I heard of the new privatization strategy,” said Gallaher’s Vice President for the Balkans and Central Europe, Guenter Panhoffer. He was referring to the government’s strategy- which we reported on in October and earlier– to sell Bulgartabac factory by factory rather than as a single unit. A previous attempt to privatize the company last April failed because of adherence to the old unitary thinking.

Complementing the purchasing bidders were five companies trying out for the part of privatization consultant: SG Corporate Finance Advisory, Paris; JP Morgan Plc, London; a Credit Suisse First Boston (Europe) consortium, London; Morgan Stanley & Co. Limited, London; and finally UBS Ltd, London, together with Balkan Consultancy Company, Sofia. The field was crystallized on February 2, when a deadline for bidding set in December expired.

Finally, on 17 February, Morgan Stanley was chosen. This was owing to its “…successful record in consulting similar privatisations in neighbouring Serbia,” according to the Bulgarian Ministry of Economy. Unsurprisingly for the Balkans, Bulgartabac’s board of advisers is comprised of the same deciding cabinet ministers.

The ministry plans to get the privatization underway in 3 months, by which time Morgan Stanley will have conducted due diligence at the factories and worked out its privatization strategy. Reuters adds that “…the process is an important condition for Bulgaria’s loans from foreign donors and for credit-rating upgrades.”

Reuters yesterday added that “foreign majors” had “abandoned” the privatization attempts begun last spring, due to the perceived unattractiveness of some of Bulgartabac’s subsidiaries. Besides separate unloading of subsidiaries, the new government plan aims to close loss-making units.

However, strategy was not the only reason for a breakdown in talks. Bulgaria’s politically powerful Turkish minority asserted its interests as well. From our October 2003 report:

“…One of the sticking points in April’s negotiations was the collective fate of tobacco workers under any future owner. Most of the affected workers are Bulgarians of Turkish origin, and their interests have been propelled by Turkish political leaders inside Bulgaria’s ruling coalition.”

Bulgartabac has rich holdings across several countries. All in all, its 22 domestic subsidiaries include 12 processing factories and 9 cigarette factories. It also owns 5 cigarette factories in Russia and one each in Ukraine, Serbia and Romania.

Optimism for Bulgaria’s bid were heightened last summer when three similar privatization sales in Italy, Serbia and Morocco “…fetched prices ranging from double to quadruple original estimates,” in the words of the “Financial Times.” Time will tell if the Bulgarian government can actually get the 300 million euros it anticipated the new strategy would bring it last August. However, the fact that the privatization process is back on track is indeed a reason for optimism.

Business Breakthroughs Help Bulgaria Pull Ahead

(Balkanalysis.com Research Service)- It’s official- the EU’s associating of Bulgaria and Romania in a unique accession group has ended, due to concerns in Brussels and Strasbourg over slow reform in the latter state.

By contrast, Bulgaria is looking good, with promising signs from key sectors buoyed by recent breakthroughs in foreign investment.

According to Reuters, the American private equity fund Advent yesterday signed a 230 euro million deal for 65 percent of Bulgaria’s state-owned telecom operator BTC, “…after nearly two years of legal and political battles.” Even now, it took a “last-minute breakthrough” to close the deal, due to squabbles over BTC’s dividend and a mobile phone license.

In contrast with Romania, which has recently been held up as an example of sluggish structural reform, Bulgaria’s BTC sell-off is being regarded as an example of success, according to Reuters. Bulgaria’s telecom market has long interested foreign investors. In 2001, Greece’s OTE successfully launched the country’s second mobile operation. Directed by CEO Nikos Avgerinos (now head of OTE’s Macedonian mobile operator, Cosmofon), the operation got off to a quick start. (See our UPI interview with Mr. Avgerinos reprinted here).

Another promising privatization is that of Bulgartabac, the state-owned tobacco monopoly. After 9 months of waiting, the appointment of a foreign privatization consultant on Tuesday means that the government’s final strategic plan will be completed within 3 months, and bidding can resume. Tobacco is one of Bulgaria’s most promising industries and the consumer base in this Balkan state is formidable.

In tourism, Bulgaria continued double-digit gains recorded last year, when British package tours for the first time started arriving on its Black Sea shores. Enthralled by the inexpensiveness of the country, and its happening night life, droves of tourists came to mark Bulgaria’s most successful summer season ever.

Now, newly released data from the Economy Ministry shows that Bulgaria has attracted 21.96 percent more tourists (195,544) in January 2004 compared to the same period last year. Since December, says the government, there’s been a rise of 26.15 percent in tourists. Bulgaria’s interior is blessed with mountains, making it a winter sports destination as well as a summer one. Among the skiers, snowboarders and nature lovers, 50,000 or so have come from Greece. The next most popular country of origin is neighboring Macedonia, followed by the United Kingdom, Serbia, Turkey, Russia, Germany, Israel, the United Stated and Italy.
According to the report, an EU tourism commission study reveals that “…Bulgaria is one of Europe’s fastest developing destinations.” The survey showed that the country is achieving “…great success at a time when the world tourism faces hard times as in 2003, when it marked a decline of 1.2 percent.”

Of course, there are some caveats. Bulgaria’s inexpensiveness- the country’s prime tourist draw- will level off after it joins the European Union in 2007, and both wages and service costs rise. And foreign dominance is not always beneficial. Germany’s Deutsche Bank may have bowed out from the Bulgartabac deal last April, but it can still develop a presence as owner of major European package holiday operators. As in the more popular tourist countries of Greece and Turkey just next door, Bulgarian tourism managers could find themselves the indentured servants of international giants, lured by a quick injection of cash but paying for it over the long run. While by no means pristine, post-Communist Bulgaria does have its charms and unsightly package tourism could sully them.

Sofia Bombing Mafia, Not Terrorist Related

By Christopher Deliso

An explosion in downtown Sofia on Monday, in which four people were killed and seven injured, comes as “…the latest in a series of violent attacks attributed to turf wars in Bulgaria’s organised crime,” according to the Bulgarian News Network.

In other words, despite al Qaeda fears every time a bomb goes off, US-friendly Bulgaria is still endangered more by its own groups than the outside world. The bomb, which was placed in an elevator shaft, killed businessman Stoil Slavov and 3 of his bodyguards. The owner of a fuel trading firm, Slavov also had connections with the owners of Bul Ins (a large insurance firm sharing the building that was attacked).

Like many Bulgarian bosses, Slavov had received various death threats, according to Bulgarian National TV, since 2001. The prominent and extremely wealthy Iliya Pavlev was assassinated last year.

BNN added that Bul Ins is a successor of SIC, “…a former insurance company suspected of being a front (for) an underworld group involved in illegal traffic and extortion rackets.” Macedonian National TV stated that the Bulgarian opposition is calling for changes in the Interior Ministry following this latest surfacing of the underworld.

However, the strong presence of mafia in government has made this hard in the past, and is currently hampering regional intergovernmental investigations of organized crime.

“The Bulgarian criminals we are investigating are unfortunately under the protection of the government,” one Macedonian law enforcement official told Balkanalysis.com.

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