Банкеръ Weekly

Briefs

UNEMPLOYMENT FUNDS ARE ALLOCATED BY SIGHT

The implementation of a program of the Ministry of Labour and Social Policy called From social benefits to employment inflamed passions last August. The ministry led by Hristina Hristova sent letters to mayors who acted as employers under the program to inform them they should get ready to cut up to 70% of the people employed under this program. More people have been employed than it was expected and the funds would not be sufficient, the ministry pointed out. Meanwhile, the media surprisingly quoted Elka Dimitrova, Head of the Labour Market Policy Directorate in the social ministry, as saying that there was enough money for the program at least until 2007 and its implementation would continue. The scandal provoked by the termination of the greatest initiative to reduce unemployment rate was brought under control temporarily. However, there are some new facts arising now which are indicative for the chaotic behaviour of the ministry in this aspect.In accordance with the Law on Encouragement of Employment, the social ministry proposed how funds for fighting the unemployment should be reallocated. The act stipulates that the money may be redirected from certain regions in the country to others or be transferred from one program budget to another. In this case, the demand concerns reduction of the financing in 37 programs and employment measures which amounts to BGN6,640,598 as well as increase of the funds in other ten programs. For example, the money planned for implementation of the Youth Computer Training program should be reduced by BGN1,025, the funds meant to encourage agricultural producers to give jobs to unemployed people should be cut by BGN141,387, and the resources for stimulation of entrepreneurs should be down by BGN99,000. Meanwhile, there is a proposal to add BGN150,000 to the financing of the program From social benefits to employment. Oddly enough, the social ministry first claimed in August that the money on this program is not sufficient, then its experts said there was enough of it, and now it turns out that other initiatives should be cut for the sake of this one. It is written in the National Plan for Employment Activities that 70,000 unemployed people will be hired under this program in 2004 and that there is a budget of BGN141,282,076 to finance their salaries and training. By the end of July, there were 98,203 people employed (i.e. 18,000 more than planned) and just 48.53% (BGN68,561,434) of the funds utilized.This is not the only discrepancy and it comes as confirmation of the employers' opinion that the Employment Agency does not have data on which to base accurate forecasts. Employers are firm that even the proposed reallocation of the funds for implementation of the national employment plan is not adequate to the situation on the labour market. To answer the accusations, experts from the ministry said that the reallocation of funds is based on information provided by the regional employment offices. However, there are parts of the country where there are no such offices or where they are not operating, therefore no concrete figures can be obtained from them. Moreover, the reallocation of the money does not take into account the requirements of the labour market in the respective regions. There are neither detailed analyses of the structure of unemployment nor forecasts for implementation of the programs by year-end. The only information provided concerns the money spent by June 30, 2004. But the lack of interest in a program as well as the small percentage of utilized money are not a good reason to reduce its financing. This approach is a mistake, experts from private employment agencies comment. If a project is not being implemented according to the plans, the financial support should not be stopped, they underline, but measures should be taken for speeding up the initiative. There is also need of an additional explanatory campaign, because there are still entrepreneurs who do not know the privileges they could use.Another disadvantage of the reallocation plan proposed by the social ministry is that it does not name which regions will get more money. In fact, this appears to be a good chance for indirect pre-election propaganda. There are reasons to suspect that the rulers might direct the money to regions where electors show less confidence in them. Additional financing may go to the mayors representing the National Movement Simeon II (NMSII) and the Movement for Rights and Freedom (MRF), experts from the National Council on Encouragement of the Employment claim. In this case, the money will not be spent in accordance with the unemployment rate in the regions but will reflect political interests.The problem is that no criteria have been developed in Bulgaria to assess how employment programs and measures influence the labour market. Therefore, the efficiency of the fight against unemployment cannot be precisely assessed, nor can an adequate reaction plan be prepared, experts say. In fact, actions in Bulgaria are too chaotic and do not rely on concrete figures. The last research on the effects of the policy of the Employment Agency was carried out in 2000. Even its results were not precise, however, because the research failed to consider indicators that give real idea of the attained social effect. It did not define the achievements of the employment programs in the various administrative regions, either.A draft of national criteria for assessment of the effect of these programs on the labour market was reviewed on a meeting of the National Council on Encouragement of the Employment on July 29, 2004. However, nothing has been done yet for preparation of a methodology. It is part of the European Employment Strategy that Bulgaria is obliged to implement. The 2004 budget provides BGN200,000 for the purposes of this project.

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