EKIP– Expert Club for Economics and Politics A Different Opinion
To answer this question, we must first answer the opposite - what are the great successes of the Transition? Because, somewhat paradoxically, its greatest successes also contain its greatest failures. The Transition in Bulgaria actually occurred only in 1997, after a period of severe economic cataclysm. The fact that in practice until then we refused to undertake any more serious reforms betrays the attitude of the Bulgarian political elite and society towards the Transition. We hope to the last that it will not have to happen. Alas, the reality is radically different.
What are the successes of the Transition?
The successes of the transition began when we accepted reality and in 1997 elected the most ambitious and pro-reformist government in the last 30 years. Simply because we had no other realistic choice. The reforms that this government undertook laid the foundation for our economic and social development 20 years later. The introduction of the currency board, the partial reform of the social system, privatization and other such reforms finally transformed the Bulgarian economy and turned it into a market economy, at least in the majority of economic sectors.
Then Bulgaria undertook a transformation in another respect as well. In foreign policy, we chose not to look to the East, but categorically to the West. The next two governments after that of the UDF successively brought us first into NATO, and then into the EU. However, economic reforms did not stop either, and in 2007 we carried out the most ambitious tax reform of the entire transition – the introduction of flat taxation.
This period of about 10 years between 1997 and 2007 can be identified as the brightest decade for Bulgaria in the last 30 years. During this period, our country experienced a real economic boom, much more substantial than the recent one, but perhaps somewhat paradoxically, not so well realized and properly appreciated. During this period, there was also a mood of at least some optimism in Bulgaria for our future development – both among the political class and among the ordinary population. Mostly because we have a goal – our transformation into a Western country with a Western standard of living, integrated into the Western Euro-Atlantic international community.
Where did we fail in this Transition?
All this changed after 2007 when we entered the EU and even more specifically after 2009 when the most dominant political force in Bulgaria in the last 30 years came to power - GERB. After entering the EU, Bulgaria lost its national goal. It can be said that in a certain sense we accept that a kind of end of history is coming for us, if you allow me to use this cliché. The cherished goal has been achieved, we are integrated into the promised land of the "West" and we almost expect that from now on there will be no crises, political or economic, and everything will go smoothly. Since we are already in the EU, this means that in the very near future corruption in our country will be completely eradicated, there will be jobs for everyone and our incomes will become like those in Germany. Right?
Alas, we are wrong again. The sad reality of our transition is that in a sense we are always running away from it. First we put it off until the last moment, until the knife was stuck to the bone, and then we wanted it to end as quickly and imperceptibly as possible. This is what I mean when I say that the great successes of the transition also contain its great failures. It was fast – barely 10 years in reality, but that is precisely why it was also beaten.
The reforms were successful, but insufficient. Whether we are talking about the privatization of state-owned companies, the reform of the social system, the reform of healthcare, or even the tax reform – none of these reforms were completed. Not to mention the problems with corruption. These reforms were started, but subsequently abandoned. And their abandonment was presented as their "completion". Our politicians and, in a broader sense, our society were satisfied with the sanitary minimum of reforms.
The achievements of the last 30 years are insufficient
Yes, these reforms have significantly improved our lives – according to recent data from Credit Suisse, Bulgarians are now over 10 times richer than in 2000. But because they were not ambitious enough, these reforms left key structural problems to continue to rot the foundation of the Bulgarian economy. The most striking example of this, and here of course I am biased, is the pension system. Nearly 20 years after the reforms, it has practically gone bankrupt. Especially in the current demographic context, this system, which forms the largest expense of the state year after year, is sooner or later doomed to bankruptcy. A bankruptcy that would involve the finances of the entire state, not just the National Social Security Institute. A bankruptcy that could plunge us into a crisis much more severe than the one that happened in Greece.
With the current system, we can postpone this bankruptcy, but not prevent it. The only way to avoid its catastrophic long-term consequences is to undertake the necessary reforms and move to a completely different model of pension insurance. Something that was started during the time of Ivan Kostov, but was never completed. The same applies to healthcare. The same applies to other sectors – transport with the de facto bankrupt BDZ, energy with the lack of competition, local monopolies and constant deficits in NEK, the long list of state-owned enterprises that are constantly losing money and only waste taxpayers' money. Not to mention how the excessive centralization of state finances leads to the chronic impoverishment of local authorities and the population in the countryside, which also causes its depopulation.
The last 10 years have exposed the illusions of the Transition
But perhaps the greatest failure of the Transition is of a completely different nature, not purely economic. And this failure is that from relying on "salvation", economically, socially and politically, from one empire - the Soviet Union, we began to rely on "salvation" from another, now emerging empire - the European Union. We never formed our own vision of what Bulgaria should look like. We always rely on this vision to come from abroad. We will be "like them", we tell ourselves, and in our constant attempts to be "like them", we are ready to hand over our sovereignty to them. We simply do not have the ambition to be independent.
Of course, I am not trying to deny geopolitical realities – Bulgaria’s specific history and geographical location put it in a position where it must always choose to side with one or another global geopolitical alliance. But this does not mean that we should rely on the vision for our overall national and especially internal development to come from this Union. Our first decade of EU membership has very clearly revealed how illusory such expectations are. Despite our EU membership, corruption in the country has not been eliminated, on the contrary – we could say that it is more obvious and repressive than ever in the last 20 years.
In economic terms, it is no different - the European funds are more of a poison for our economic development than the miracle cure that we thought would give us the standard of living of Germany. After 10 years of European funds, our economy is not more dynamic, but more stagnant. It is clear to everyone that at best they are extremely ineffective, and at worst they are a tool for enriching corrupt interests, dirty businessmen and further entrenching them in power.
Why do we continue to rely on "salvation" from outside?
Yet we continue to turn a blind eye, especially among our political class. Now, membership in the Eurozone is being touted as our new path to salvation. This is an especially insane fulcrum given the fact that 1) the Eurozone is the most unstable element of the EU and 2) our mere accession to the EU has not achieved all that we had hoped for. Why do we continue to think that joining yet another union, one with far more glaring and substantial flaws, will solve our problems?
The big problem of Bulgarian society 30 years after the fall of the communist regime is that we have fallen into the lethargy of "stability". Just as then, so now we are afraid of change. We are afraid to be ambitious, we are afraid to have a vision for the future. This is especially evident from the recently published government document "Vision 2030", which supposedly presents the vision of the rulers for the development of Bulgaria in the next decade. What kind of vision? Don't waste your time reading this meaningless document - the vision for the next decade is simply to repeat the last one.
The true meaning of "stability" is stagnation
This means that the vision of our rulers is a vision of stagnation. This is precisely the true meaning of the notorious "stability". Our politicians are unwilling to take the necessary steps to combat, or at least try to, the most serious problems that smolder beneath the surface of this blissful Euro-subsidized stagnation, sorry, stability. Demographics, social system, healthcare, monetary policy, Bulgaria's place in Europe and even the world - everything is left on autopilot. To the extent that something is done on these topics, it is simply to temporarily patch up the problems and postpone their solution.
But the more we delay, the more we stagnate, the worse it will get. Stagnation never ends with some magical boom that solves the problems that simmer beneath its surface. But the worst thing is that no one in the opposition, inside or outside the parliament, has a better alternative. In fact, the biggest anti-government oppositionists from our political elite want us to surrender our sovereignty even faster and become part of a huge federal Europe. The vision is either to be vassals of Brussels or to become its territory outright. Which would only deepen the deepening stagnation, both economic and social.
We need to shake off the slave mentality
The European Union is not our "salvation", just as the USSR was not then and Russia is not today. "Salvation" can never come from outside. This is something that the Bulgarian revivalists and revolutionaries in the 19th century were painfully aware of and that is why they were categorically against relying on an external force for Liberation. Nowadays we seem to have forgotten this wisdom. It is forgotten even among most of our "nationalists", who, despite their patriotic posturing, do not mince words about the most important foreign policy national issue of our days - will we accept the Euro? They even seem to support it, thus turning political Bulgarian nationalism into nothing more than a parody theater.
It is high time to shake off this slavish mentality and the deceptively blissful lethargy of "stability" that simply masks our decline, both economically and socially. Our political class must replace lethargy with ambition. The Bulgarian people need a new vision for their future development. They need a new national goal. Some ideal beyond the petty issues and low-quality circus that parliamentary politics inundates us with. And we must clearly realize that a better and brighter future for us and our children can only be won independently. It will not come from Brussels, it will not come from Moscow, nor even the even more distant Washington. Our history clearly shows this. It is high time to learn from it.
