Business in the Eastern European country is emerging from the shadow of Soviet power
The figures look like statues in a Game of Thrones theme park. They represent the ispolini, an ancient race of giants that, according to Bulgarian mythology, once ruled the Earth. The monument, which looms over the central Bulgarian town of Shumen, was built in 1981 to mark the country’s 1,300th anniversary. This concrete, Cubist masterpiece is said to be the heaviest Communist monument in the world. That seems symbolically appropriate for Bulgaria, a country struggling with the weight of its past, particularly the 43 years of totalitarian rule that followed World War II.
In June 1990, when that regime had effectively died of exhaustion, you could almost smell the hope in the air in Sofia, Bulgaria’s capital. For the first time since 1931, people were looking forward to a free, democratic election. The country had its first post-Communist prime minister, Dimitar Popov. When I interviewed him, Popov spoke with cautious optimism about the modernisation, of Bulgaria (especially its economy) and his desire to attract Western investors. As one of the most respected judges in the country, Popov would have had few illusions about the scale of the task facing Bulgaria but, as we shook hands, he assured me that, in the volatile Balkans, the country would become a bastion of stability.
Yet different parts of Bulgaria were living in different centuries. Sofia was recognisably modern, if a bit dishevelled. Only a few miles up the hill from Sofia, in a hostel that had formerly served as a holiday home for Communist party members, the dawn chorus of braying goats made me feel as if I had stepped back into the 18th century. That dichotomy was reflected in the results of that historic election. Forced from office by public protests in December 1989, the Communist Party rebranded itself as the Bulgarian Socialist Party and won a majority in the national assembly. In the countryside, voters had preferred safety to modernisation. In Sofia, voters backed the Union of Democratic Forces (UDF), a centre-right alliance that promised change.
The success of the Bulgarian football team, powered to the semi-finals of the 1994 World Cup, seemed to confirm that a national renaissance was underway. Yet only three years later, hyperinflation, unemployment and bread queues earned the UDF a shot at government. Conscious of the need to define a unifying goal, new prime minister Ivan Kostov announced that he wanted Bulgaria to join the EU by 2007. He knew, as he said, that this would be regarded as a “common joke, because of our disastrous position” but it helped focus his economic reforms. When Bulgaria did join the EC, Kostov was no longer in office, undone by corruption charges levelled at some of his ministers.
Corruption has defined Western perceptions of Bulgaria ever since. Some estimates suggest that it costs the economy at least $7bn every year. According to business anti-corruption portal GAN Integrity, “kickbacks and bribes plague the public procurement sector, eradicating fair market competition and resulting in fewer opportunities for foreign investment”.
Many Bulgarians are sick of the corruption, but also feel that the West is slow to understand the poisonous legacy of a Communist system in which, as one person put it: “You couldn’t buy a screwdriver from a hardware store unless the owner was a friend or family – or you could do him a favour.”
Transparency International spurred headlines when it recently accused Bulgaria of doing little or nothing to punish corporate bribery. Yet less attention was paid to the fact that Belgium, Denmark, Japan, Poland and Spain were deemed to be just as bad.
It is possible to construct a more hopeful narrative for Bulgaria’s future. The cliché that the country’s political elite can ignore public opinion with impunity is not entirely true. In recent years, public protests have forced the resignation of deputy prime minister Valeri Simeonov (who criticised disabled rights activists) and parliament to fire Delyan Peevski, an oligarch with interests in banking, construction and the media, as security agency chief. That firing – in 2013 – prompted some Bulgarian politicians to recognise that there were limits to public patience.
Last year, Bulgaria’s parliament passed three laws against graft. A single anti-corruption investigative unit has been created, new regulations to combat money laundering were introduced and investigators were given the power to check bank data to ensure that magistrates are honestly declaring their interests. The last proposal is a tacit recognition that the judiciary has been an unreliable ally in the war on corruption.
Such measures earned Bulgaria rare praise from the European Commission which said, if the country kept progressing, it could be admitted to the Schengen Area by the end of 2019.
Those new laws partly reflected a recognition by some politicians that, left unchecked, corruption could tear the fabric of Bulgarian society. Foreign direct investment now only accounts for 2% of GDP, and 1m Bulgarians have emigrated since 1990 in search of a better standard of living elsewhere. On present trends, the working population could shrink by 21% by 2047. The government has already changed some policies, reforming education to support a thriving IT sector (which accounts for 3.6% of GDP) in an attempt to halt the brain drain.
The European Bank of Reconstruction and Development has financed 250 projects in Bulgaria to date, 55% in the private sector and 45% in the public sector. The public sector projects must comply with procurement rules as part of the conditions for funding.
Now in his third term as prime minister, Boyko Borisov has some room for manoeuvre. The economy is growing at around 3.5% a year, national debt stands at less than one-tenth of GDP and the government could afford to increase public and minimum wages by 10% in January. Despite the succession of downbeat stories from foreign correspondents, Bulgaria is climbing up the World Happiness Index – up to 100 in 2018, compared to 134 in 2015.
Bulgaria refuses to be simplified. There is some nostalgia for the security of life under Communism, yet others, notably the writer Kapka Kassabova, remember that era as like “living in a banana republic, but minus the bananas”.
Bulgaria’s future is more complicated than it seemed in that euphoric summer of 1990, yet more hopeful than when it was as a satellite of the Soviet Union.
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