SENSE OF FAILURE

SENSE OF FAILURE

Thu, 08/19/2010 - 16:13

Bulgaria's botched reforms and lack of progress benefit President Georgi Parvanov

Prime Minister Boyko Borisov

Despite protestations by the current government that the economic crisis ended in April, the business community thinks otherwise: the worst is yet to come. Recent price hikes for heating and natural gas imported from Russia (as much as 25 percent in the case of the latter), coupled with the refusal of those in power to pay debts owed to private businesses (in some cases in the region of millions of leva) presage a harsh autumn and an even harsher winter. Many businesses are going under only because they were naive enough to be working for the state of Bulgaria. They now discover that the state's official contracts, signed and sealed, mean little when the ministers in charge refuse to pay for work already done.

At the same time, the government is using the time-honoured technique of distracting the public's attention by trumpeting its own "successes" in the fight against organised crime. Sadly, the spectacular arrests of alleged gangsters and white-collar criminals rarely result in any meaningful prosecutions and even less frequently in jail sentences. There have been glaring examples of botched police raids as well. One of them was the "busting" of an art auction which resulted in precisely nothing, and another was the interception of a computer server distributing scanned books, many of which are out of copyright. Hours after Interior Minister Tsvetan Tsvetanov smugly made that announcement, the whole content of the "pirate" server appeared on... pirate bay. In the meantime, "ordinary" crime of the type affecting ordinary Bulgarians is on the rise. Burglaries and thefts increase while Tsvetanov explains them away by referring to the "economic crisis."

Some Western diplomats in Sofia have suggested that many of Bulgaria's problems, especially in the area of corruption, might be solved if the media behaved more in line with Western practices of objectiveness and independence. But that remains wishful thinking. While the mainstream newspapers and, especially, the major TV channels here differ wildly in their approach to the politics of the day, they appear to be oddly unified in their obsequiousness towards whoever is actually in power.

With very few exceptions, the media appear to be servicing the good of the state rather than the public interest, with the notable exception of the incessant flow of sensationalist reality shows and soaps that would not offend anyone.

Prime Minister Boyko Borisov's by now habitual reflex is to shift the blame elsewhere, usually onto his predecessors. While in many instances he is right in saying that the mess left behind by the tripartite coalition of former king Simeon, Ahmed Dogan and Sergey Stanishev exceeds the wildest imagination and will consequently take a long time to clean up, his at times grotesque insistence on vilifying anyone but himself for the current state of affairs has started to produce Communist era-type jokes. Two men meet in the street and one asks the other, "What will the government of Boyko Borisov be remembered for?" He replies: "Sergey Stanishev."

His is a voice of reason in an increasingly hysterical political world

His is a voice of reason in an increasingly hysterical political world

Some observers predict that Boyko Borisov intends to stand for president in the 2011 election. Borisov would indeed fit well into the shoes of a president, because from that position he can do what he is best at: making pungent and controversial remarks without having to bear any responsibility for them. Consequently, the sole strategic aim of the government at the moment seems to be to ensure that he does indeed become president. Towards that end, it has started doing exactly what it vowed not to do a year ago: spend the fiscal reserve. To start with, it readjusted its own projected budget deficit from 0.1 to 5 percent ‒ a drastic increase within just a few months, revealing its inability to handle both the revenue and the spending part of its own finances.

Saved money is easy to squander, as everyone in these cash-strapped times knows. But opening up the state coffers without implementing any real reforms may be a great disaster in a country whose economy has been limited mainly to the now-punctured property bubble.

There are several scenarios for the economic and political situation in Bulgaria in the coming months, and none of them is particularly optimistic. The most obvious prediction is that unemployment will go up while wages will remain at their current levels – or be axed even further. That will create a fertile ground for mass emigration, either seasonal or permanent. It is of little comfort that the price of real estate will continue to fall. Some banks may experiences difficulties. The previous government adopted a bill to guarantee personal savings up to 50,000 euros, but now with the spending of the fiscal reserve the situation has changed. Forecasts suggest that by the end of 2010 it will have been reduced from 8 to 4.5 billion leva. Bulgaria had a very nasty experience with hyperinflation in 1996-1997, and in the worst case there might be a re-run, especially if panicking depositors start withdrawing their money because the state is unable to guarantee it, as it has run out of its own fiscal reserve. The government may then resort to the Greek scheme: call in the International Monetary Fund to save the country from bankruptcy and put the blame on it for all the unpopular measures.

Politically, the chief beneficiary of the current situation is Boyko Borisov's "arch-enemy," President Georgi Parvanov, the former leader of the Bulgarian Socialist Party and former agent for the Communist-era state security. A proponent of Bulgariea's increased dependence on Russian power resources, he is known for his loyalty to Russia's Vladimir Putin. Despite his many faults and vices, Purvanov is now seen by a number of Bulgarians as a ray of moderation and common sense against an increasingly hysterical background. There are indications that Parvanov now has his own "political project" that may pitch him directly against Borisov and his GERB, or Citizens for European Development of Bulgaria. Any predictions in the Balkans must be taken with a very large pinch of salt, but such a scenario may not be so very far-fetched. On the other hand, it may. If Borisov fails completely, he may just disappear from the political scene like so many before him. Parvanov will then stand unchallenged.

Issue 47-48 Boyko Borisov

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