NEWS

Bulgaria moves from myth to reality

All the commentators who predicted that dramatic political changes would ensue from the unprecedented transformation of a former king into the prime minister of Bulgaria have certainly been disappointed. The first actions by the government of Simeon Sakskoburgotski following the overwhelming victory of the National Movement for Simeon II (NMS) in the June 17 election have been deemed slow, careful and pragmatic. The election brought the former king’s party into power with a majority of 120 seats in the new 240-seat Parliament. When the right-wing Union of Democratic Forces (UDF) and the Socialist Party (BSP) categorically rejected any collaboration with the royalist party, Sakskoburgotski formed a coalition government with the Movement for Rights and Freedoms (MRF). The price for the inclusion asked by the MRF (which mainly represents Bulgaria’s Muslims) was the post of minister of agriculture for Mehmet Dikme, and the office of minister without portfolio for another representative of the Muslim movement. As agreed, Ahmed Dogan’s MRF party was given seven ministries, including defense. MRF deputy Mehmet Ali Zhafer was sworn in as defense minister in early September. Relations with Turkey Does the emergence of the pro-Turkish MRF as coalition partner presage a new, more dynamic development of friendly relations between Sofia and Ankara? This supposed new period began in a rather odd way, which Bulgarian commentators promptly dubbed as football diplomacy. When the deputy leader of the Turkish government, Mesut Gilmaz, visited in late August to attend the UEFA Cup qualifying match between the Turkish team Galatasaray and the Bulgarian team Lefsky, he took the opportunity to mix duty and pleasure. Gilmaz exerted pressure on Bulgarian officials to resolve a dispute between the Bulgarian State and the large Turkish conglomerate Ceylan, in connection with the construction of some major infrastructure projects in Bulgaria, and in exchange for electricity exports from Bulgaria to Turkey. But this mediation effort by the Turkish politician failed to persuade the Bulgarian ministers concerned to look more kindly on the large private Turkish group, whose serious economic problems have been a cause of concern in the Bulgarian and international press since Turkish officials put restraining orders on the bank accounts of over-indebted Ceylan last year. For his part, Dogan was obliged to disown in person the statements made by a leading member of his party about the supposed need for an amendment to an article in the constitution which declares that Bulgaria is monoethnic. The public feeler put out by Muslim party representative Yunal Lutfi, before the agreement for the MRF’s political cooperation with the NMS was even signed, raised a storm of opposition from the public. This opposition can be explained only in part by the Bulgarians’ anxiety about the dramatic developments in neighboring FYROM. The new prime minister also succeeded in securing the silent support of the socialists by including two prominent BSP members in key government positions, while the former mayor of Blageofrad, Konstantin Paskalef, who was elected with socialist support, was named deputy leader of the new Cabinet. This is in spite of official announcements by BSP leader Georgi Parvanov that his party continues to be in opposition, which Bulgarian observers do not find very convincing. Keeping promises In the light of Sakskoburgotski’s generous election campaign to promise to radically raise the living standard of Bulgarians within 800 days, which was a decisive factor in his electoral victory, the new government’s first economic measures, announced by the premier in late August, met with positive reception. Although, as announced, the government’s full program will only be made public after a review of the legacy of the UDF government, which will give the new Cabinet a clear picture of the country’s true state, most observers believe that the first bittersweet taste of economic policy will probably show the generous election platform making a fast landing on the hard reality of the country’s limited potential. For instance, the positive effect of future cuts in indirect taxation and tax on profits and an increase in the minimum wage for public servants are counterbalanced by the expected increase in electricity prices and central heating – which are vital for urban dwellers – and for telecommunications. A number of economists have expressed misgivings and KNSB, the largest trade union in Bulgaria, has already convened a national rally to protest against poverty on November 1. And Pirita Sorsa, the International Monetary Fund’s new permanent representative in Sofia, has publicly expressed reservations about the negative effect of tax cuts on the budget. The appointment to government posts and higher levels of public administration of new people whose only common feature seems to be a lack of any connection with the political sphere in Bulgaria is probably the prime minister’s chief concern. His political opponents have already claimed that he is not leading his government but lording it over them, given that not only the ministers but also deputy ministers, general secretaries of ministries and directors of large public organizations are appointed only with his explicit personal approval. There were many contradictory reactions to the recent appointment of the premier’s personal bodyguard, Bojko Borishov (no connection to the author of this article) as general secretary to the official responsible for public order in the Interior Ministry. This appointment has been interpreted as an indication of the premier’s special interest in personal control of the security sector. Political circles in Sofia were also surprised by the choice of the controversial Stoyan Yanev as manager of the prime minister’s private office. Yanev became widely known here in the early 1990s, after the fall of the first UDF government, in which he served as interior minister, when he decided to settle permanently in the United States, doing little to enhance his popularity in his homeland. Since his recent reappearance on the Bulgarian political scene as one of the principal advisers and organizers of Simeon’s election campaign, news of his supposed involvement in the church of the South Korean Sun-Yung Moon, whose controversial activities in the USA and other countries have received wide coverage in the Bulgarian press, caused a sensation. Meanwhile, the mass media’s tolerance of any new government for the 100-day honeymoon period will soon come to a premature end, judging by a series of recent articles referring to infringements on existing legislation during the changeover in the upper levels of public administration. The main thrust of the new government’s foreign policy is still Bulgaria’s progress toward accession to the European Union and NATO, as Sakskoburgotski said when announcing his government’s program. According to the premier, this priority will continue to determine the country’s policy in the Balkans, where Sofia is working for security, stability and cooperation. The National Movement and the views of the new prime minister With this declaration, I establish the National Movement for Simeon II with three main objectives. First, a fast and qualitative change in living standards in our country by building up the market economy according to the criteria for accession to the European Union and an increase in the inflow of foreign investment. I am prepared to propose a package of economic measures and a system of social and economic partnership through which the well-known diligence and initiative of Bulgarians will change your lives in no more than 800 days. (From the NMS founding speech on April 6, 2001) The policy of our platform puts improvements in living standards above everything else. The great aim is to help each and every Bulgarian citizen and family. You will have higher incomes and you will be able to spend more. Around the world, 50-70 percent of GDP comes from consumption. It is obvious that the Bulgarian economy cannot grow unless the incomes of Bulgarian citizens grow. (Television announcement to the nation on June 5, 2002) In a televised speech on August 19, 2001, Prime Minister Sakskoburgotski announced a radical taxation reform to come into effect on January 1, 2002, and which included an increase in the level of tax-free income to 110 leva (about 20,000 drachmas) a month; an income tax cut from 20-38 percent to 18-29 percent; abolition of tax on company profits and the abolition of taxes on profits from the sale of stocks and bonds. And the premier added: From October 1, 2001, the price of electricity and central heating will rise up by up to 10 percent. This difficult decision is dictated by the combined pressure of three factors: The tendency toward a permanent increase in the prices of energy suppliers; a change in the parity of the American dollar and the Bulgarian leva; and last but not least, the artificial restraint on these prices since 1999. The minimum wage (in the public sector) rises by 85 leva (about 15,000 drachmas). The government sees this increase of around 17 percent in the minimum wage as a the first step toward a substantial rise in the income of the poorest Bulgarians. Commenting on the decision to double the monthly family supplement for each child aged 8-18 (about 3,000 drachmas) the premier stated: The government understands that, despite the considerable additional burden on the budget, this increase is only a small contribution toward solving the demographic problems in Bulgaria and the economic difficulties of young families.