-  43  -

2001 to 69 percent and in EU-oriented exports, accounting for 67 percent of Bulgaria’s ICT exports, from 33 percent in 2001 to 66 percent in 2003. More significantly, there was a huge change in the composition of ICT EU-oriented exports: three four-digit SITC sectors— radiotelegraphic/ radiotelephonic products (7643), telecommunications equipment (7648),<sup>21</sup> and parts of apparatus—now accounting for three-fourth of ICT exports contributed only 33 percent in 1999.

Last but not least, while import intensities of both networks remain very high indicating lack of significant assembly operations, they began falling in 2002-03. Based on network trade intensities of CEEC-10 that successfully have entered into supply chains, the value of the share of imports of parts in network’s exports of parts and final products below 100 percent suggests significant involvement in division of labor based on production fragmentation.

Hence, despite a strong rebound and signs of entry of some firms, Bulgarian producers remain marginal suppliers in global ‘producer-driven’ networks. The share of networks’ products and parts in Bulgarian total exports remains low and reached its peak 1996 level only in 2003. Despite significant gains in EU markets, their shares in EU imports of both networks’ products are well beyond the share of total Bulgarian exports in total EU external imports.

# **C** **_._** _Bulgaria’s producer-driven network trade in regional perspective_

Hence, Bulgaria has a long way to catch up with most other CEEC-10 in terms of participation in ‘producer-driven’ network-based trade. The share of ‘producer-driven’ network products in total exports of manufactured goods, excluding chemicals, in 2003 puts it on a par with Latvia, and except for Serbia and Montenegro is much higher than in SEE-3 economies. It is, however, much lower than in Romania (Table 32).

**Table 32:** _Features of ‘producer-driven’ network trade of CEEC-10 and SEE-5 economies in 1996, 1999 and 2003 (in percent)_

||Share in|exports o|f manuf.|Exports (cu|rrent US$)|Share|ofparts|inexp|orts of|Share of I|CT network|
|---|---|---|---|---|---|---|---|---|---|---|---|
||(che<br>(|micals ex<br>inpercent|cl.)<br>)|total<br>Average|parts<br> growth|auto n|etwork|ICT n|etwork|exports in<br>driven'|'producer-<br> exports|
||1996|1999|2003|2003-00|2000-03|1999|2003|1999|2003|1999|2003|
|Czech R.|18|24|34|22|21|47|57|56|26|13|36|
|Estonia|22|28|30|1|16|52|45|58|54|80|72|
|Hungary|13|52|54|11|10|71|79|30|21|52|58|
|Latvia|7|3|5|27|13|62|56|57|25|58|61|
|Lithuania|24|14|19|24|14|28|14|73|73|57|41|
|Poland|13|19|26|16|22|41|66|40|42|30|22|
|Slovak R.|19|30|41|25|35|30|37|46|44|14|12|
|Slovenia|21|21|22|10|14|37|47|35|25|9|12|
|**Bulgaria**|**8**|**5**|**4**|**24**|**24**|**66**|**60**|**49**|**41**|**28**|**64**|
|Croatia|7|5|8|16|14|96|84|37|49|33|61|
|Romania|4|6|10|14|10|83|89|78|19|42|43|
|Albania|0|3|2|41|97|21|73|10|54|47|57|
|Macedonia|3|3|2|2|2|70|86|26|63|7|14|
|Moldova|12|5|3|11|13|16|34|17|36|67|29|
|Serbia & Mont|10|13|11|10|14|80|85|46|34|3|9|

Note: For Serbia and Montenegro the most recent data available are for 2002. Source: Computations based on UN COMTRADE Statistics.

Bulgaria fits neatly into two different patterns of specialization that appear to have been emerging in Central Europe since 2000. First, like most CEEC-10 economies that ‘plugged-in’ automotive networks, it has been moving towards specialization in automotive parts. While the share of parts in Bulgarian automotive exports was 66 percent in 1999, it fell to 44 percent in 21 See Table 17 above on emerging top performers of electro-engineering industry.