BULGARTABAK SHOULD BE A SYMBOL OF TRANSPARENT PRIVATISATION
Neil Parison, Senior Public Sector Management Specialist for Europe and Central Asia at the World Bank, to the BANKER weeklyMr. Parison, before launching the PAL 2 loan, the World Bank required that Bulgaria made reforms in its judicial system. What problems will this system have to solve?- First, let me tell you which areas the Bank is most concerned about. You might remember that in May this year, when the World Bank Country Director Andrew Vorkink paid a visit to Bulgaria, he highlighted two problems that needed special attention. First he said the judicial reform, and second - the privatisation of Bulgartabak. Mr. Vorkink added that the Bank would want to see a stable progress in the solution of these specific problems, so that negotiations on the launching of PAL 2 loan can go on successfully.As far as the reforms in the judicial system are concerned, I would like to underline that they are extremely important for the application of the entire reforms agenda for Bulgaria. The Bank experts claim that, in order to have a good investment climate, a country must definitely have a modern and reliable judicial system. This system plays a significant role in attracting additional investments, including direct foreign investments. Besides, the citizens of the country should have trust in a key state institution. So, judicial reforms are crucial to the restructuring in all other areas - social restructuring, economic restructuring, public sector development, etc.We hope that a significant progress can be achieved in reforming of the judicial sector in a short period of time. For this purpose, the National Assembly should adopt the amendments to the legislation that are currently being discussed. These amendments concern the immunity, the replacement, and the mandate of the judges. It's important to expand the opportunities for holding the judges responsible for their actions. This can be achieved by adopting amendments to the Law on the Judicial Power that refer to the immunity of the magistrates and also by voting the proposed age for retirement. Besides, when there are personal or professional reasons that impede a member of the system from exercising his functions properly, there must be a mechanism that allows his replacement.All prepared reforms in the judicial system aim at increasing the confidence of the private sector and the citizens in the system. The society and the business must be convinced that there are mechanisms through which any kind of problem in the judicial systems could be solved.You said that the second important condition for launching of the PAL 2 loan is the successful privatisation of Bulgartabak. What is your opinion of the course of the privatisation procedure?- Any privatisation faces the risk of attracting some political pressure. This is mostly valid for the big privatisation deals. I would like to highlight that the World Bank does not underestimate these difficulties. What's important to us is that the sale of Bulgartabak becomes an example of a transparent and legitimate privatisation process that we can demonstrate to the investors community. This is the method to attract more investors, including strategic ones, to the Bulgarian market. That's why the sale of Bulgartabak is more important as a symbol of the opportunities that Bulgaria offers to foreign investors. Well, if Bulgartabak hasn't been sold by the end of the year, will the Bank launch the PAL 2 loan?- I think the progress achieved in the area of the judicial reform is most essential to us. As far as Bulgartabak is concerned, the government and we are making review of what has been done so far and what else can be achieved for the deal to be concluded. The future development of the private sector and the business environment will be significant, too.Are you going to collaborate with the Open Society Foundation of George Soros? At the end of a meeting with the Bulgarian Prime-Minister, Mr. Soros said he would support the reform of the judicial system.- All organisations that have an interest in supporting the achievement of a faster growth of the Bulgarian economy and the reduction of proverty can profit by their work together. So, we are operating with different partners. In the area of the judicial reform, as you know, there are a number of agencies, apart from the Soros foundation, that are related to the European Commission Delegation, and the EU PHARE programme and the USAID are among them. We are trying to cooperate closely with our partners and we also rely on our direct relations with the Bulgarian authorities.During your current visit (on July 15), you talked with the IMF representatives in Bulgaria. What did you discuss?- I did not go to that meeting with the Resident Representative of the Fund, Piritta Sorsa. I know that my colleagues discussed the progress that Bulgaria has made within the PAL 2 programme. Recently, the Fund approved the third review of the stand-by agreement and launched the sixth tranche of the negotiated financing to Bulgaria. On that occasion, the Fund and the World Bank exchanged their opinions of the reforms in Bulgaria.You represent the World Bank, how would you comment on the changes made in the Bulgarian government?- I cannot make any comments on this issue. What we have to do is to work in the suitable manner and to consult the government. We have established a concrete programme with the Bulgarian authorities and it aims at achieving stable growth. We think it is the right programme for Bulgaria. We expect a 5% growth in the next two years, as well as reduction of the poverty. We hope that the redistribution of the responsibilities in the Council of Ministers will not concern the principles of the programme.Still, do you think these changes will have either a positive, or a negative effect on the reforms?- I think that it is too early to make any comments on this question. We have reached an agreement on what has to be achieved. We believe that the government will be able to keep on making progress.