When the World Bank Country Office in Bulgaria opened on April 1, 1992 the country was balancing large aspirations with many economic and social difficulties. Hopes for freedom rose amidst great challenges. The centralized economy of Bulgaria, which focused on heavy industry, had lost its markets virtually overnight. Energy supplies were cut and the economic turmoil created in the aftermath of the fall of the Berlin Wall had saddled Bulgaria with a major external debt problem and a sagging economy. Despite these challenges, however, hope – for freedom of speech, freedom of movement, and freedom of travel – still sprang forth.
While hope dominated during this historic moment, few – if any – could have envisioned the extraordinary economic, political, and social strides this country would make over the next two decades. Ongoing strategic engagement with international partners and the implementation of a prudent reform agenda over these years has allowed Bulgaria to overcome various hurdles - transforming from a fledgling market economy to an upper-middle income member of the European Union (EU) in just two decades.
Constant engagement with its international partners has been a cornerstone of Bulgaria’s successes over the last 20+ years. The prospect of joining the European Union and strengthening its role in the global community spurred a national consensus to follow this ambitious path. These hopes for increased international integration in the global economy were soon realized – first in 2004, when Bulgaria joined the North Atlantic Treaty Organization, and then in 2007, when the country joined the EU.
Throughout all these changes, the World Bank Group constantly engaged with Bulgaria – forging a solid partnership through good times and bad. When hyperinflation erupted in Bulgaria in 1997, the World Bank - in close coordination with the IMF - provided much needed financial support for the necessary structural reforms which were put in place as a response. When Bulgaria joined the EU, the World Bank celebrated alongside all of Bulgaria's international partners.
Starting with an initial $17 million Technical Assistance for Economic Reform Project, the World Bank Group has remained a firm development partner, committing over $9 billion to Bulgaria over two decades – including 44 operations, 24 investment loans, four Global Environmental Fund (GEF) grants and two World Bank-managed Prototype Carbon Fund (PFC) operations.
As the country evolved so too did this strategic partnership. Sustained economic growth, followed by the accession of Bulgaria into the EU in 2007, has allowed for a marked shift to occur in the country’s engagement with its international partners - from macroeconomic stabilization and structural reform to knowledge and advisory support. During this time the role played by the World Bank has transformed from one of premiere financier to that of a knowledge partner supporting Bulgaria in making the most from existing EU funding.
Bulgaria’s Country Partnership Strategy (CPS), in place since 2011, has altered the focus away from traditional lending operations toward a more knowledge-oriented partnership. This new strategy envisages knowledge support for smart, sustainable, and inclusive growth in Bulgaria in line with the Europe 2020 agenda and National Reform Program. The CPS also commits knowledge support to Bulgaria in speeding up the absorption of available EU funding – a task being implemented in conjunction with other international partners, including the European Commission, and the European Investment Bank.
The signing of a Memorandum of Understanding (MoU) in January of 2012 further reinforced this strategic call for an improved knowledge partnership between Bulgaria and the World Bank. This MoU sets the stage for Bulgaria’s new priority engagement with International Financial Institutions and builds on a mechanism that allows the Government to draw on EU Funds to cover the costs of knowledge and advisory services of the European Investment Bank, and the European Bank for Reconstruction and Development, and the World Bank.