*Ex FinMin Comments on Bulgaria's 'Endless' Protests for WSJ

Views on BG | July 29, 2013, Monday // 08:37|  views

Bulgaria's former Deputy Prime Minister and Finance Minister in the GERB Cabinet (2009 - March, 2013), Simeon Djankov, photo by BGNES

The Wall Street Journal


Bulgaria is making the international headlines these days, and not for happy reasons. For 45 days and counting, there have been daily protests against the government, numbering in the tens of thousands.

Protestors last week laid siege on Parliament while it was still in session, stranding ministers and MPs for one sleepless night. The police tried in vain to breach the barricades, hurting some protestors in the process and serving only to swell their ranks. The demonstrations are by now the longest-lasting since the dawn of Bulgaria's democracy in 1990.

An outsider might say that antigovernment protests are not uncommon in Europe nowadays. Just look at Greece, Portugal or Spain. But the protests in Bulgaria are not the garden-variety anti-austerity sort.

Bulgaria's fiscal house is in order: According to Eurostat, the country in 2012 had the second-lowest debt-to-GDP ratio in the European Union, at 17%, and the fourth-lowest budget deficit, at 0.6%. In Bulgaria, belt-tightening is a thing of the past. The minimum wage was increased by 30% in the last two years. Pensions rose by 10% in April.

Why, then, are Bulgarians taking to the streets? They want Bulgaria to become a normal country. And they are fed up feeling like second-rate Europeans.

In a Eurobarometer poll published last week, 51% of Bulgarians said they didn't feel like a citizen of the EU. Their country joined the union in 2007 with great expectations. With help from Brussels, people hoped, income and investment would rise, roads would be built, the bureaucracy would be modernized and the last traces of communism would forever be banished. Bulgaria, in short, would become a normal country, one in which you could raise your children.

Things didn't turn out this way. Investment rose and brought up incomes with it—not as much as people had hoped, but measurably. Since the beginning of the transition to democracy, life expectancy has increased by seven years due to a doubling of the health-care budget and a rapid decline in smoking. And money from Brussels did result in new infrastructure construction, especially during the previous government, led by Boyko Borisov, in which I served as deputy prime minister and finance minister.

But the vestiges of the communist era are still omnipresent in Bulgaria. They prevent normality from setting in.

It remains to be seen how long the current government, headed by Prime Minister Plamen Oresharski, can stay in office. A long life seems unlikely. But whoever comes to power next would face the same frustrations. Three bold reforms are needed for Bulgarian politicians to grow in esteem among their constituents.

The first is thorough reform of the state security services, including limiting their former members' involvement in public life. While other Eastern European countries quickly disbanded their communist-era secret police after the breakup of the Soviet Union, no government has wanted or managed to do so in Bulgaria. The Borisov government swept the diplomatic service of former secret police members, but broader efforts were stymied in Parliament or the courts.

As a result, members of the communist-era secret police still yield significant influence in Bulgaria's media, financial sector and even Parliament, where Lyutvi Mestan, the chairman of the Movement for Rights and Freedoms party, is a former secret police officer. Many notorious criminal bosses were formerly employed in the state security services. The knowledge and contacts they developed there help them today to influence some of the political elite as well as certain institutions that should support public order, such as the intelligence service, the prosecutor general's office, the high administrative court and the constitutional court.

The second is energy reform. Various politicians have used the energy sector as a source of illegal political and personal funding. This is a remnant from the Soviet era, when the Kremlin supplied Bulgaria with cheap oil and gas in exchange for obedience. Bulgarian authorities would resell some of the oil at market prices and pocket the difference. Variations of similar practices still exist.

Bulgaria's government needs to liberalize the sector, which is dominated by badly run government enterprises. A public listing of Bulgarian Energy Holding, the state-run behemoth, would bring much-needed transparency and also undercut corruption.

The third is reform in university education. A recent poll conducted on behalf of Bulgaria's education ministry found that 52% of this spring's graduating high-school class applied for university abroad. One in six members of last year's graduating high-school class went on to foreign universities. The majority of these students will likely continue their careers outside Bulgaria. That creates enormous pressure on the domestic labor market, which is rapidly aging.

A better system for funding educational institutions could help improve standards. Under a pilot program started in 2011, university departments that achieve better placement of their students in the job market receive more financial support from the central government. This program could be expanded, to offer universities progressively more budget money each year. But resistance is enormous, as many of Bulgaria's 53 universities would have to adapt quickly or lose students. There are already, on average, fewer students per university in Bulgaria than anywhere else in the EU.

These three reforms—limiting the role of the security services in public life, and reforming the energy sector and university education—go hand-in-hand. Resources that now are wasted in security services and in the energy sector can be redirected toward improving education, which in turn would make for a better-informed electorate in future elections. That would really give Bulgaria's politicians something to worry about.

Mr. Djankov was deputy prime minister and finance minister of Bulgaria from 2009 until March 2013.

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Tags: protests, demonstrations, protesters, barricades, police, Bulgaria, government, Plamen Oresharski, Eurobarometer, Simeon Djankov, Boyko Borisov, communist, era, EU, infrastructure, secret police, Soviet, parliament, Lyutvi Mestan, Movement for Rights and Freedoms, energy sector, education, reforms


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