STRUCTURAL TRANSFORMATION AND INDUSTRIAL COMPETITIVENESS OF BULGARIA AFTER 10 YEARS OF EU MEMBERSHIP Paskal Zhelev * Summary After the global crisis it was realized that manufacturing should be assigned a major role for Europe to continue to be a global player. The European Commission has called on EU countries to step up their industrial policies and try to restore the central position of manufacturing for creating jobs and growth. In this context the aim of the paper is to look at the process of structural change in Bulgaria in the period after its EU accession. An attempt is made to explore whether the Bulgarian economy has managed to reindustrialize and improve its industrial competitiveness taking advantage of the alleged benefts of the full EU membership. The analysis has been made in comparison to another two similar countries. The results show that so far reindustrialization has not been achieved and, despite the slight improvement in the industrial competitiveness, in relative terms it is extremely unsatisfactory. Key words: manufacturing, reindustrialization, technological intensity, GVA, exports, structural change JEL: F63, L52 Introduction Ample historical evidence and recent empirical studies have conclusively shown that structural transformation (the shift of productive resources from low-productivity to high-productivity economic activities), especially towards manufacturing (defned narrowly as part of the industrial sector without mining, utilities and construction), has been the driver of economic growth, catching- up and development. Chang (2007) states that history has demonstrated that the single most important factor that distinguishes rich countries from poor ones is basically their higher capabilities in manufacturing, where productivity is generally higher and grows faster than in agriculture and services. According to a * Assoc. Prof. Dr. Paskal Zhelev, Department International Economic Relations and Business, Faculty International Economics and Politics, University of National and World Economy. He also holds a visiting appointment at Plovdiv University. Dr. Zhelev is Secretary Member of the Board of the Union of Economists in Bulgaria. e-mail: pzhelev@unwe.bg