Bulgaria's National Reform Program for... Downtown Sofia

Bulgaria's Finance Ministry unveiled on Monday a "National Program for Reforms 2015" that is supposed to boost economic and labor competitiveness with a number of measures within the context of EU's "Europe 2020" program.

The so called "reform program" is supposed to achieve ambitious goals for Bulgaria by 2020 - 76% employment, spending on research and development amounting to 1.5% of the GDP, a 25% increase of energy efficiency, having renewable energy reach 1.5% of GDP, lifting 260 000 Bulgarians out of poverty, reducing the number of school dropouts by 11%, seeing 36% of the Bulgarians aged 30-34 with university education, blah, blah, %, blah, GDP, blah, %*, etc...

Readers of Novinite.com (Sofia News Agency) were quick to notice that the array of astounding figures closely resemble the five-year plans for economic and social development, or rather, engineering, of the Bulgarian Communist Party.

Actually, it is probably safe to think that the efforts of the Bulgarian commies under Todor Zhivkov and the horrendously wise Soviet leadership in Moscow probably made more sense than the current jibber-jabber of the Borisov Cabinet, which only compiled a reform program because the eurocrats in Brussels demanded it within EU's 2020 grand strategy.

Leaving aside all debate of the wider EU plans and how much sense they make, and skipping graciously a mention of the fate of the Lisbon Strategy, may it rest in peace, which was somehow supposed to make the EU the world's most competitive economy by 2010, the so called National Reform Plan 2015 of the Bulgarian government appears to have little substance.

Its most likely consequence is that some time around 2020, if there is still a Bulgarian nation-state and an European Union by that time, some wiseacre clerks in Sofia will compile a report to explain why the figures cited above, more inspiredly known as "goals" or "priorities" were not achieved. They will then happily beget a new reform, development, or space exploration plan of similar soundness, if there is still anything left to develop 43 degrees north of the Equator and 25 degrees east of Greenwich.

I have already raised some similar points in "Welcome to Sofia, the Bulgarian City-State! (440 B.C.)" and in "Welcome to the Jungle: The Bulgarian Hinterland, 2020" but the overly ambitious figures of the "National Reform Plan" have apparently inspired me anew.

Sure, the Borisov Cabinet was supposed to come up with a reform plan under EU rules, as other EU members are drafting their own plans.

But instead of all the general talk about "Bulgaria's specific priorities: a stable financial sector, improving infrastructure, boosting youth competitiveness, bettering the business environment, and generating more trust for state institutions," as outlined by Deputy Finance Minister Boryana Pencheva, the Bulgarian government and its relevant ministries – most importantly those of Finance and Economy should've tried to figure out some way to draw in massive foreign direct investment, and to channel a significant share of that into the provinces.

My favorite part from presentations of the National Reform Plan is the talk about improving the labor market. How exactly – and why, really – would you take measures to improve the labor market if you have little economy worthy of the name, to start with, and if your population is dying off – as a results of similar ill-conceived reform, development, and structural efforts, that, sadly, were not confined to the communist period but continued to thrive in the post-communist period as well?

If you figure out how to draw in investments, and if you fix the education system (and if your society had decent moral and spiritual values – but that is too much of an overstretch, which is why it is brackets), the labor market will be perfectly fine by itself; not only that but foreign workers will start pouring in – as is the case of any proper Western country with a declining population.

The fact of the matter is that the National Reform Program in question is probably good only for some quarters in downtown Sofia where the state institutions will apply it to the gardens in front of their buildings without any thought ever crossing there mind that Bulgaria encompasses some more territories on the map, and that the way to have a decent economy with a real potential for GDP growth would be to try to develop all of them.

A much more important piece of news for Bulgaria than the reform plan is that the state-owned Bulgarian Posts company will shut down its offices in towns or villages with a population of under 800 people – which just means driving in one more nicely sharpened nail into the coffin of the Bulgarian provinces.

I have spoken with many foreigners from all over the world regarding their Bulgarian likes and dislikes. The one thing I found that all of them deem extremely interesting and enjoyable is the uniqueness of the Bulgarian hinterland, the setting of the Bulgarian villages and small towns. Not once did I hear an American, German, Russian, Spanish, Chinese, or Indonesian person say they were not impressed with what can be found there in terms of culture, nature, food, and traditions.

Clearly, what all of them dislike is the condition these vast swaths of Bulgaria's territory are in right now – namely, the total absence of any national initiative to develop them and the complete deficit of state authorities.

This means that in many of places people are on their own not only in terms of jobs - because the Bulgarian government is not trying to invest in them or to lure investors there, but also that you can be raped, beaten, set on fire, and eaten by a bear, or all of the above – and the representatives of the government and the elite in Sofia won't even know of it as they are probably hanging out on some business trip in the Maldives or in the nice shopping malls of the capital city.

With all that said, my point is simple – all the "fiscal consolidation measures" and "labor market measures", whatever that means, of the reform plant will be good for nothing unless there is a real economy and a motivated population somewhat evenly distributed out across the entire country.

There are ways of doing that for Bulgaria. First, tap in the vast potential of the pan-European and intercontinental transport corridors that pass through its territory. For the time being, they exist just on geographic maps for there are no proper ports, roads, and railways; attracting transit traffic can have just as important economic benefits as foreign direct investments.

Second, seek to draw both industrial investments and settlers from abroad (both ethnic Bulgarians and foreigners) to currently underdeveloped regions in the country. Bulgaria is so small, and all of it has such a great climate that such a strategy could work out – especially with the proper transport infrastructure.

Third, finally figure out the way to both sustainable agriculture and tourism – in all of its varieties; unfortunately, providing high-quality tourist services, generating unique ideas, and doing good PR and advertising campaigns have proven to be prohibitively difficult for the Bulgarian state and the better part of the local business.

To be fair, the Borisov government has some good points here and there in that respect. For one thing, all the Prime Minister himself talks about day and night, on all TV channels, is the construction of highways, and some progress is finally being made there.

The InvestBulgaria Agency and the National Company Industrial Zones are working to develop several industrial zone pockets around the country. And the Cabinet even moved to offer on concessions a couple of defunct provincial airports – Gorna Oryahovitsa and Shtraklevo near Ruse (and near Bucharest) – an initiative previously considered a taboo.

This patchwork of projects, however, won't generate much in terms of the revolutionary changes needed to reverse the economic and social situation on the ground all across Bulgaria.

Even the much celebrated progress of the Trakiya Highway (just imagine – in 135 years of history, the third Bulgarian state will complete one major highway!) disregards the fact that some empty-headed bureaucrats directed it to go from Sofia straight to the Sunny Beach resort on the Black Sea, rather than to the Port of Burgas, a gateway for Asian goods with a vast potential – one more indication that having fun with cheap booze, seaside display of silicon breast implants, and chalga music are more important to the Bulgarian society than the development of a proper economy and infrastructure.

The condition of the Bulgarian railways – is the worst in the EU – as the Deputy Head of the unit responsible for Bulgaria in the Directorate General for Regional Policy of the European Commission, Karsten Rasmussen just put it; the ports on Black Sea and the Danube are completely failing to take off in spite of their strategic location – with the government even affording the luxury of shedding generous low interest development loans from Japan.

All of the state-planned industrial zones around the country still remain in the future despite the hopes of attracting some major Chinese investments. What is more, those are designed to further concentrate economic activity and population in Sofia and a couple of other cities rather than spread them out around the country.

I was told by one of the CEOs of the National Company Industrial Zones that foreign investors simply won't go to some regions lacking infrastructure and human resources. I dare disagree with this investment causality because it seems to rule out any efforts to develop economically and socially and doom altogether the regions that are already falling behind. 

A further point in hand is that, for some reason, the contemporary Bulgarian psyche considers villages, small towns, and provinces outside of Sofia, Varna, and, probably, Plovdiv highly non-prestigious and shameful place to live. What once were the idyllic rustic communities of their forefathers are now seen by Bulgarian city residents as the equivalent of Siberia labor camps, Sahara sand dunes, and Jupiter craters combined.

That might have been fine, had the above mentioned cities actually been orderly and clean. All of that means that any potential overall improvement would require a massive paradigm shift – of the sort that has made developed societies aware of the benefits of living in suburbs and towns that are not overcrowded and closer to nature.

One communist era-joke exposing the typical pseudo-urbanization of the time says that the main similarity between communism and a nuclear bomb is that both obliterate the differences between cities and villages. In Bulgaria's post-communist period, however, villages, towns, and entire regions are being abandoned to disappear from the map, while the couple of surviving cities continue to bear many of the negative features of "provincial" or "village" life.

I am well aware than any Bulgarian government official will tell me that my points are off topic, that I am putting apples and oranges in one basket, and that the national reform plan blah, blah, doesn't have much to do with villages, provinces, and regional development. Of course it doesn't – those places are simply disregarded when it comes to government efforts or projects, or wider public and business sector initiatives.

However nice any reform plans might be – and they usually aren't – at the end of the day it all boils down to the quantity and quality of jobs, industrial plants, foreign tourists, schools, roads, cultural clubs, and well-educated middle class that you have on the ground. Bulgaria doesn't have many and much of any of those

Four of Bulgaria's six planning regions are among the top 10 poorest regions (NUTS 2) in the EU with Bulgaria's Northwest (Severozapaden) being the gold medalist in this poverty ranking. Bulgaria is usually at the bottom of all EU rankings being last in everything. My secret guess is that with its plans, projects, efforts, and policies, the Bulgarian government is eager to preserve our lead in poverty.

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