While the effects of this new EU membership could hardly be called "tangible" by the large majority of the Bulgarian population, one fact, six months after the EU entry of the country, deserves specific attention on behalf of policy-makers and policy-researchers.

For the first time since planned economy of communist type, Bulgaria succeeded in producing a long-term, comprehensive development plan, covering not only the key economic sectors, but also identifying the strategic issues in the areas of demography, social services, minority integration, urban and rural disparities. The exercise proved extremely difficult, encompassing more than 18 months of discussions and negotiations among ministries, central and local authorities, government and socio-economic partners, mainstream macro-economy and interest groups. The document is called 'the National Strategic Reference Framework' (NSRF)  in typical Brussels terminology, which might be the reason why the official approval of the NSRF received relatively limited media coverage.

After the so called "changes" in 1989, Bulgaria started a slow and not strategically oriented (at least not in a documented manner) process of restructuring the economy with a focus on gradual privatization and fight against unemployment. The example seems the exact opposite of Leszek Balcerowicz's' shock therapy, which it may be argued , was a good choice because it enabled vast numbers of private entrepreneurs to enter the market quickly and effectively. There were 45,011 private companies in Poland by the end of 1991, which together with the unincorporated entrepreneurs employed 3 million people outside agriculture, or 25% of the Polish labor force, and produced 40% of the Polish GDP.

Bulgaria on the other hand underwent all the negative phases of a post-communist economy without an identified direction, apart from European (and Atlantic) integration. To quote from the NSRF, "internal and external factors during the 90s caused severe underinvestment in infrastructures, loss of human potential by emigration or labour market inefficiencies and resulted in one of the lowest GDP per capita in Europe". The transition towards functioning market economy of course accelerated after 1997 following the introduction of the Currency Board arrangements. Market liberalisation, privatisation and restructuring of state-owned companies and the process of deregulation of natural monopolies allowed the country to establish a functioning market economy (European Commission concluded that Bulgaria has a functioning market economy in its 2002 Regular report on Bulgaria's progress towards accession ), and that is two years before Poland entered the EU.

The point of the present article is not to compare Poland and Bulgaria, and even less to attempt to demonstrate the higher GDP per capita in the former, but rather to suggest that having no plan is possibly the most dangerous plan. And the fact the EU provided the incentive for Bulgaria to produce a plan and a vision, allowing through it the access to 6,853 billion euro, undoubtedly constitutes a positive impact of EU membership on the country, and will also have the needed leverage effect.

In brief, how does Bulgaria plan to develop as an EU member state until 2015? Investments are concentrated in the two factors of growth : physical and human capital. Nevertheless, in order to bring about the expected impacts for these investments, the rule of law and efficiently functioning judicial and administrative systems are overarching basic preconditions. The latter statement would have been visionary, had it been made in 1990. At the present moment, it is simply logical.
Bulgaria sets three strategic thematic priorities:
• Improving basic infrastructure;
• Increasing quality of human capital with a focus on employment;
• Fostering entrepreneurship, favourable business environment and good governance.
In addition, there is a commitment to supporting a balance in its territorial development, inter-regional and in view of urban-rural dimensions, as well as to the horizontal policies of equal opportunities and non-discrimination and sustainable development, including energy efficiency.

The first priority foresees support for better quality transport infrastructures, ICT infrastructure and links, and investments in environmental protection infrastructure. The second priority supports adequate human resources in both the public and private sectors. Investment in modern education, training and lifelong learning as well as good health is expected to increase the level and quality of employment and support reintegration and inclusion into the labour market.
The third priority is focused on setting up an effective business support framework by improving the regulatory environment, encouraging entrepreneurship, innovation and developing efficient and transparent state administration. The partnership between government at all levels and the civil society, if strengthened, can support effective policy design and implementation. The main issue remains legislation enforcement.

Whether this strategy is going to work will be assessed in 10-12 years time. However, what is important is that there is an identified, agreed and financially-backed up country development plan. What is more, in order to reach this stage, problems and their roots had to be admitted. And as much as success can be measured at this stage, there is such and its name is 'honesty' in politically sensitive policy areas.

04.07.07

Angelina Todorova,

Angelina Todorova is a Bulgarian researcher. After her BA (Hons) in Philosophy, Politics and Economics at the University of Oxford and a MA in Nationalism Studies  at CEU/University of Toronto, she came to Bolzano last year to attend the MA in European Integration and Regionalism (EURAC/University of Graz).

Photo: View of Lake Dospat in Bulgaria