Bulgaria’s Black Market Boom: How Economic Crime Threatens the Nation’s Future

The Center for the Study of Democracy (CSD) sheds light on the vast impact of economic crime on Bulgaria’s economy and future stability.

A Breeding Ground for Organized Crime and Corruption

In the post-Communist years, Bulgaria’s economy became a breeding ground for organized crime and corruption. Fueled by international and national factors, this economic crime wave has reached alarming proportions.

Conditions for Systematic Corruption

• The divestiture process created a regulatory vacuum in various economic sectors.
• The shortage of investment capital and legitimate business structures enabled organized crime to infiltrate and control vast sectors of the economy.

Significant Criminal Schemes

Contraband Channels

• Annually generates around 1 billion USD.
• Illicit trade with petrol, cigarettes, and other commodities.

Draining of Banks and Financial Pyramids

• Billions of dollars were lost due to corrupt privatization methods.
• Organized crime gained control of state assets at a fraction of their worth.

‘Parasite’ Economy

• State enterprises’ profitable activities captured by private companies.
• Resulted in the complete ruining of state enterprises.

The Flow of ‘Dirty Money’ into Politics

• The long-standing absence of effective legislation regulating political parties’ financial resources has facilitated the flow of ‘dirty money’ into politics.
• Collaboration between business and politics erodes trust in democratic institutions and distorts the political landscape.

Organized Crime’s Influence on the Broader Business Sector

• Through privatization, control of imports and exports, racketeering, establishment of monopolies, and venturing into ‘cyber crime’ and credit card fraud, organized crime groups continued to strengthen their hold on the Bulgarian economy.

The Economic Costs of Criminal Activities

• Undermine the transition to a free-market economy by destroying fair competition and private initiative.
• Jeopardize Bulgaria’s image on the international stage.

A Call for Action

• The fight against economic crime requires concerted efforts from all sectors of society.
• Redefining national security and incorporating new notions like ‘security sector’ can help address challenges of trans-border crime and terrorism.
• Targeting the root causes of economic crime, bulwarking against its devastating effects, and fostering public-private partnerships can help restore the rule of law and pave the way to a more prosperous future.