SOFIA (SeeNews) – Bulgaria needs to boost employment and productivity in order to narrow the income gap and speed up convergence with the European Union, which it hopes to join next year, a World Bank report said yesterday. Bulgaria’s per capita income is only 30 percent of the average in the 25 EU members and, unless action is taken, this will decline, the report, «The Road To Successful EU Integration – The Policy Agenda,» said. Labor market reforms are vital for Bulgaria to narrow the income gap with the EU and improve living standards, bearing in mind the country’s declining population, it added. Bulgaria’s population is declining by 0.8 percent per year due to a negative natural rate of population growth and emigration, which have led to a rapidly aging population and declining work force. «The main problem is that there are not enough qualified workers, and the reasons for this problem come from both the demand and supply side,» Georgi Ganev, an analyst with the Bulgarian Center for Liberal Strategies think tank, said at the presentation of the report in Sofia. «From the demand side, the problem is that the connection between business and education is still artificial, and from the supply side there are stimulation problems – nobody is punished or praised on the basis of how much education they have created,» he said. Another Bulgarian economist, Georgi Stoev from the Industry Watch think tank, said the labor market needed fewer entry and exit barriers and the state should reduce its participation in the economy. «I would like to see the education and healthcare sectors as real markets,» Stoev said. The World Bank recommended to the Bulgarian government a reform agenda focused on five areas that should speed up convergence with the EU. This agenda includes improving the quantity and quality of human capital, upgrading the transport network, promoting efficient and transparent public sector management, improving labor market performance, reducing regulatory complexity and judicial reform to strengthen the enforcement of contracts. The head of the Bulgarian Chamber of Commerce and Industry, Bozhidar Bozhinov, said the administration needs urgent reforms as it often hampers business initiatives and the development of the labor market.