Bulgaria - Military Industry

The Bulgarian defense industry was active in the trade of small armaments, some of which found their way to outlaw or rebel forces worldwide. The Kostov government cut back significantly on foreign arms sales in 2000 and 2001 and cracked down on illegal arms shipments. Bulgarian defense industry has been considerably downsized and its output and exports have shrunk several times in volume.

The Bulgarian Defensive Industry Association (BDIA) was founded in 2004 by twelve companies leading in the branch and is aimed to serve as a forum for exchange of ideas between the state bodies and the defensive industry for resolving the problems of the branch and its steady development. The Association aims at forming an “united voice” of the Bulgarian defensive industry on the matters of modernization, defensive industry policy, the offset policy and the policy for procedures and procurement for the defense and the safety of the country, the scientific researches and the technological development.

Export of products of the Bulgarian defense industry doubled during the 2010-2011 period, and was comparable to export of electricity from Bulgaria to neighboring countries. Minister of Economy Traicho Traikov said during a July 07, 2011 conference dedicated to the future of defense industry in Bulgaria pointed out that the hi-tech products made by highly qualified experts form the main part of the export. The Bulgarian strategy for development of the defense industry was presented at the forum, in which NATO officials and representatives of the European Defense Agency (EDA) also took part. The document aimed at creating good conditions for the development of the high-tech military production sector. The new project has been developed in accordance to the European Strategy for defense-technological industrial base and Bulgarian production would be aimed at the European market.

Economy Minister Traicho Traikov said at the forum: “Bulgaria aims at development of a versatile and modern defense industry that is to allow us to easily find our place in situations like the present in Libya,” the Minister added. “The sector was not up to date with the modern trends and new challenges. Development of the Bulgarian defense industry is also related to our strategy for development of high-tech production and innovations in general.”

Bulgarian Defense Minister Anyu Angelov pointed out that in 2010 the ministry has paid 174 million euro to Bulgarian producers of military equipment and about 82 million euro to foreign companies. Minister Angelov confirmed that new arms would be bought for the Bulgarian army after 2013 from Bulgarian producers. Modernization will start first among the special army forces.

“Bulgarian companies have the capacity for selling products to the Bulgarian army and EU and NATO countries,” Minister Angelov pointed out. “Few months ago a procedure for delivery of equipment for the Bulgarian contingent in Afghanistan started. It was conducted by the NATO Agency for Maintenance and Support. Companies from all over Europe took part but finally a Bulgarian producer offering the highest quality at lowest price was chosen. We expect that Bulgarian companies would also be hired for modernization of 36 Mi 17 Russian helicopters, owned by other NATO Member States,” the Minister added.

In a market economy, the defence industry retains its uniqueness among other economic sectors because of its special relationship with the state as its regulator, investor and primary consumer. The uniqueness of the Bulgarian technological and industrial defence base and the role of the Ministry of Defence determine the office’s exceptional ability to have an immediate impact on the entire base, including on its research and development components. The Bulgarian technological and industrial defence base, in turn, affects the environment, directions and parameters of the transformation of defence capabilities. This interdependence has to be developed into a fruitful type of fresh relations between the Ministry and the defence industry, which are to replace the current distancing of their practices.

The global financial and economic crisis forced the reconsideration of the MOD’s investment plans and policies. The contraction in investment costs associated with the building of defence capabilities (in particular new weapons, equipment and systems) forge a new paradigm of planning which will lead to the rearrangement of priorities and a change of approach.

The immediate objective is a sharp and visible increase of efficiency and effectiveness in spending Bulgarian taxpayers’ money, for example by taking advantage of membership in NATO and the European Union, which provide opportunities for sharing defence costs as well as significantly improving their effectiveness.

The state of the Bulgarian defence industry and research & development is primarily a result of 20th century investments. The product structure and opportunities are concentrated in the technological sector, which meets the defence’s lower level requirements.

The contraction of Bulgarian and external investments, and especially of the costs of research and development led to a sharp reduction of the sector’s export potential and to its value to the Bulgarian economy. This trend has ? significant negative impact on national security. If this state of the Bulgarian technological and industrial defence base remains, the industry’s potential to meet the future material requirements of the Armed Forces will be reduced evermore progressively.

The Ministry of Defence intended to develop a fundamentally new, unified and comprehensive policy for Bulgaria’s technological and industrial defence base, in the context of NATO and EU membership, for the technological developments in warfare and the needs for development and maintenance of the material component of defence capabilities.

The Ministry of Defence’s clear vision and plans to develop the capabilities of the Armed Forces will provide conditions for the industry to develop well-informed long-term investment programs in new technological and production capacities. For this purpose the Minstry planned to established an industry forum to ensure the direct interaction, stable partnership and firm dialogue between government institutions, the industry and the research and development community with interests in defence.

Western industry has created an interlocking and complex web of technical rights ownership through decades of evolving national and international patent, trademark and copyright law. In the early 1990s, Bulgaria had no patent attorneys, so MOD engineers address the issues in parallel with their other branches of government which were trying to develop capability in these important new areas.