Банкеръ Weekly



Is it curtsy to big investors, resolution to put an end to the poacher's felling and corruption, or great economic interests that is behind the successive reform in forestry? There is no explicit reply to that question at present, but most of the people engaged in this sector are ill disposed to the changes, prepared by a team of the Ministry of Agriculture and Forestry and the World Bank. The main reason for the negative attitude is the fact that they are connected with new loans: USD30MN from the World Bank, USD7MN from the Global Ecology Fund, and co-financing from other donors, including USD7.3MN from the budget. The establishment of a new, more efficient system for the management of the sector is the main principle, on which the model for the development of forestry is based. The separation of control from the economic activities will be the first step, which is aimed to put an end to frauds and increase proceeds and reinvestments. This, according to experts, will be achieved by the establishment of a market-orientated state-run organisation - a national forestry company - under whose control will be not only lumbering and trade in wood, but also all forestry and hunting-related measures, protection of woods, management of natural parks and hunting tourism. It is projected that the capital of the National Forestry Company would be formed by part of the loan from the World Bank (USD20MN) and budget funds of BGN42.5MN. Along with that, the State will continue to perform its controlling functions and the National Forestry Administration (although changed) will remain within the structure of the Agriculture Ministry. Three models for the reform have been worked out. The first one is in fact just a cosmetic improvement of the presently existing structure. The second one (which is most likely to be approved) projects the establishment of a national forestry company. The third model plans granting long-term concessions for the management of forests. Five branch organisations - the Bulgarian Chamber of Wood-processing and Furniture Industry, the Union of Forestry Trade Companies, the Association of Private Sylviculturists in Forests and the Environment - BULPROFOR, the Bulgarian Forestry Farm Chamber, and the Federation of Wood-processors and Furniture Makers - have declared themselves against the setting up of a national forestry company. In the beginning of the week they sent a letter to the Premier Simeon Saxe-Coburg-Gotha. The letter reads that comments are already going on in the branch (citing names and proofs) that after the money from the budget and the World Bank loan are utilized, privatisation of the state-run company will follow and the would-be buyer is already known. In that connection two or three names have already been mentioned as future managers of the company, who would fulfill the task. According to BULPROFOR's Chairman Antoniy Stefanov, the State should set up rules and competitive conditions for the firms' operation and control their fulfillment rather than undertaking the control itself and competing with small and medium-sized business in the forests. The state body becomes an economic entity and will have to make its decisions according to their economic expedience, he commented.

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