Mining Regions in Bulgaria Turn to Tourism

By Maria Andonova, Maria Radmilova

Though quite opposite, the mining and tourism sectors play together in the business cards of four municipalities located in the southern Bulgarian region of the Rhodope Mountains - Madan, Rudozem, Zlatograd and Luki. The mining sector is inherited from the past while the tourism sector is the hope for the future. The four municipalities are located in the heart of one of the most beautiful Bulgarian mountains. In the past, the economic development of the municipalities greatly depended on the mining activities and nowadays the sector still plays an important role in local economy. The image of mining area quite impedes the development of the four as tourist destinations. At present, the goals of the municipal authorities to turn the areas into heavenly destinations seem difficult to fulfil.

Madan, Rudozem, Zlatograd and Luki were set up for the sake of the development of the mining sector. Still, the mining industry and the cosmetics sector co-exist in Rudozem and the mining activities are combined with the textile industry in Zlatograd.

Madan

Madan is the typical Rhodope Mountain municipality, covering a territory of 175 sq km in the eastern part of the Western Rhodopes. The municipality has excellent tourism resources but it is still a long and difficult way from the so much cherished tourism sector. The modest municipal budget of 4.3 mln Bulgarian levs, of which only 1.3 mln levs in own revenue, is far from being a good financial basis for restructuring the local economy. The funds from the budget are spent mainly on education, infrastructure, social and health care services. Though the Madan authorities have set the tourism sector as a priority, only 3.0 pct of the budget is set for its development. The municipality aims at promoting alternative tourism like mining tourism which is a practice in other European countries.

The only foreign investor in the region is Rodopi-M 91, owned by Austrian company Sportalm, which makes sports clothing. Gorubso is the backbone of the local economy. Of the total 10,000 labour force in Madan, 813 work in the company. Minstroy Rodopi is also an inheritance from the past, active in the mining equipment field. Heveya Kim, which makes rubber products, is also part of Madan's economic picture. Pony Sport and Matex are the players in the textile sector.

Jobless rate is a big problem for the municipality as it stood at 20.3 pct in September 2004. The unemployment rate was 28 pct at the beginning of the same year.

Road infrastructure in Madan is far away from the modern standards and this is one of the priority tasks set by the municipal authorities until 2006. The modernisation of the road infrastructure together with the idea for setting up a slaughter house and a wood processing company seem quite unrealistic considering the low budget of the municipality.

Rudozem

The mining sector is the most important industrial field as it is written in the municipal brochure published in Bulgarian, Russian and English. The local division of Gorubso is still working. Some 250 staff works in the mines and another 150 in the ore-dressing factory. The Gorubso division in Rudozem had a workforce of 1,800 in the mines and 450 workers in the ore-dressing factory until 1990.

The combination of the mining and the cosmetics sector in the town seems somehow strange. The decorative cosmetics plant has been set up in order to guarantee jobs to the women in Rudozem. Most of the production of all the companies in that sector is exported to Syria, Jordan, Georgia and Russia. There are also companies operating in the clothing and footwear sector and their production goes for export, too. The only foreign investment in the municipality has been made by an Italian company for granite extraction, Stones Company BG.

Unemployment is the most serious problem in Rudozem. The official jobless rate at the end of September 2004 stood at 22.76 pct but the unofficial data is at least two times higher.

In that economic situation, Rudozem is trying to find its place in the tourism sector. An ancient Roman fortress is located in the centre of the town and some 20 historical sites are registered in the municipality. The historical inheritance and the very natural resources are a good start for the development of Rudozem as a tourist destination. The big issue that is to be solved is creating good infrastructure, suitable recreation facilities and quality service.

Luki

Luki is the most interesting municipality of the four in terms of tourism sector development. It is close to the Pamporovo mountain resort and the Krystova Gora historical site is located on its territory. The Manastir village, the highest populated area on the Balkans, is also part of the Luki municipality.

The economic development of the region is also marked by the mining sector. Nowadays, the former Gorubso Luki is still operating and employs some 750. The monthly sales revenue stand at some 650,000 levs. The Fashion factory, formerly known as Prespa, employs 155 and has outsourcing agreements on the U.S., Italian and German markets. An "outsourcing agreement" in this case is an agreement under which a company has its products manufactured or assembled by a second company, often in another country, to take advantage of lower labour costs. The awarding company may deliver all materials to the second company, which provides the labour and workplace. A total 35,000 items are made monthly. The wood and wood processing sector is quite important for Luki.

A Bulgarian businessman from Kuklen has played an unconventional role in the development of the tourism sector in the region as he bought Gorubso residential buildings to turn them into a hotel complex.

The most serious problem of the municipality is the lack of good infrastructure and water supply system. The 2004 municipal budget was 1.431 mln levs compared to 1.739 mln levs in 2003 and the financial situation in Luki is getting worse.

The big advantage of Luki is the fact that the municipal administration has no debts. The town needs an adequate investment policy and a change in local tax scheme.

Zlatograd

Zlatograd is the southernmost town in Bulgaria and is proud of the oldest church in the Rhodopes and some very important historical dates. The jobless rate has been edging up. Despite the generous promises by Minstroy, a unit of MG Corporation, which has bought Gorubso-Zlatograd, the latter is almost non-operational. The official unemployment rate is 15 pct but the real figure is much higher. Nowadays, the economy in Zlatograd is marked by the operation of some companies in the textile and cut-and-sew aparel manufacturing sector.

No foreign investments have been made in the municipality so far. Despite the negative economic and industrial situation, the municipal authorities have set the development of the tourism sector as a priority. The natural resources of the region together with the ethnographic complex and museums are a good basis for the sector's growth. The ethnographic complex in Zlatograd hosts many interesting workshops, a cafe and water- and fulling-mills. The big dream of local administration for using the geothermal resources of the Erma river is quite away from becoming a reality. The business card of Zlatograd is completed by two construction companies and some private companies active in the wood sector.

($=1.49 Bulgarian levs)