ECONOMY

Bulgaria seeks economy boost in arms sales to NATO, Arab states

SOFIA – Bulgaria, once a major Soviet bloc arms exporter, is trying to rebuild arms sales, which are still a fraction of Cold War levels despite rising sharply in the past year, a senior government official said yesterday. Deputy Economy Minister Milen Keremedchiev told Reuters the reformist cabinet that took over last July wanted to restore exports to traditional Arab markets, while targeting a new market – that of NATO, which Bulgaria is striving to join. But he said Bulgaria could not dream of the $800 million in annual sales of the communist 1980s because major markets such as Iran, Iraq, Libya, Syria and Sudan are now under UN embargo or off limits for fear of offending allies, including the United States. «If we manage to sustain levels of $200-$300 million this year, we will consider that quite a good result,» Keremedchiev said. Bulgaria’s arms exports rose to more than $200 million in 2001 from annual sales of $40-50 million in the previous several years, he added. New image Bulgaria, under fire for violation of arms embargoes even after communism ended in 1989, has worked hard to improve its image, blocking sales to black-listed states in order to boost its bid to join the European Union and NATO. Some arms plants, such as Arkus in Lyaskovets, already make small quantities of NATO-standard weapons. But most still work under Russian licenses, and the bulk of the exports still go to markets seeking Russian-model weapons. The recent recovery has been underpinned by renewed sales to Arab states not under embargo, as well as Pakistan and India. India, a major client over the years, sealed a contract with Bulgaria «worth tens of millions of dollars» earlier this year and was also eying new deals, Keremedchiev said. He said Egypt, Jordan and Kuwait were also interested. Bulgaria has also attracted China, which is interested mostly in ammunition and has placed orders for several million dollars this year. It has already started exporting military products to NATO members such as France and the Czech Republic. It has also entered the US market, where it sells Kalashnikov rifles, ammunition, gas masks and flak jackets to official institutions such as the armed forces and police. The bulk of Bulgarian arms are produced by its three biggest arms makers – the Arsenal assault rifle producer in Kazanluk, Arkus in Lyaskovets, which produces pistols and ammunitions, and the Vazov group of arms plants VMZ in Sopot. Arsenal and Arkus have been sold to management and employees, while VMZ is on a list of over 1,600 firms due to be privatized. Turkey is working to emerge from its deepest economic slump since 1945 with the help of $16 billion in IMF lending, mostly targeted at reducing Turkey’s massive debt load.