Alexander Bozhkov, Co-Chairman of the Centre for Economic Development (CED), to the BANKER Weekly: COALITION IN POWER IS IN A STRADDLING POSITION
Mr. Bozhkov, isn't it disturbing that the Government's programme document - the so-called programme for government of Sergey Stanishev's Cabinet - is dominated by quite a general phraseology?
- Disturbing is the least that could be said. That document reflects the ruling coalition's unwillingness to look outside the short period within which its existence is guaranteed. In fact, it has been established with two purposes, both of them with a one-year horizon - Bulgaria's eventual accession to the European Union (EU) and the presidential elections. The coalition's future depends on them. However, it seems to be clear to the rulers themselves, as no clearly outlined long-term, four-year targets can be seen anywhere in the programme.
What is your assessment about the purely economic part of the programme?
- An absurdity can be noticed right away. The programme projects a 6-8% economic growth for the four-year period, while the 2006 budget draft envisions an economic growth below 6 per cent. So, it turns out that a drop in the economic growth instead of a speed-up is envisioned still in the first entire year of the incumbent Cabinet's ruling. This fact indicates the the Government is not ready to take any risks and work in the direction of speeding up the economic growth through decisive political measures. Thus, the private sector has been again left like an orphan as there is no synergy at all between the business activities and the State. The Government simply does not intend to make the private sector's life easier.
But reforms are realized with money, and the resources for the various social spheres will be frozen next year, too. The Government's financiers argue that this is done under the guidance of the International Monetary Fund (IMF) which will be insisting on a budget surplus. Is that the reason for the limited outlook of the rulers?
- The lack of views is evident both in the 2006 budget and in the programme. The fact that one of the key posts in the Government - that of the Finance Minister - was entrusted to an expert who does not belong to any of the political parties means that all three ruling parties do not intend to follow anyone's financial policy. Finance Minister Plamen Oresharski is simply an IMF representative in Bulgaria's Government. And his task is not to allow a collapse like the one we witnessed during the ruling of the socialist cabinet of Zhan Videnov. Mr. Oresharski's task in the Government is to protect the currency board and the Bulgarian lev, the balanced budget, and to restrict any attempts at reforms hiding risks.
Do you see indications that Mr. Oresharski could fail in fulfilling his tasks?
- So far there are no indications about a pressure on Mr. Oresharski. We saw in the 2006 budget that the statements of all three political forces for some serious changes in the policy were quickly and without much effort averted by the Finance Ministry. In fact, the budget itself has been drafted only by the ministry's professionals. It's good they are at least powerful enough to impose their stance after the Government itself has no clear views about its financial and economic policy.
How would you comment the Cabinet's policy in the sphere of privatisation and foreign investments?
- In the Government's programme privatisation has been literally cornered. This is normal as the Bulgarian Socialist Party (BSP) has always feared to speak about divestment and is also afraid to act in that direction. It does not undertake any commitments in that sphere because deep in themselves the politicians from the BSP dream of exercising control over the economy. They like state-run enterprises in order to enforce their policy through them. After the industrial sector, trade and services have already passed into private hands, part of the infrastructure - electricity, water, railway and sea transport - has remained state-owned. It turns out that the BSP will have to privatize these sectors namely, through which the party believes could enforce its policy. But if they go private, they could be supervised only by independent regulators, and not by governmental decisions. That is difficult and they do not want it. They would like to say tomorrow: We are cutting down water or electricity prices. Applaud us because we are good people.
The Cabinet's sacred first 100 days have already passed. What was done during that period, according to you?
- Much, although completely useless to the citizens. In fact, the complex coalition formula 3:5:8 was practically realized, by which the state positions were distributed. It's terribly complicated, especially where there are less than 16 posts. We saw what happened with the Tourism Agency and with the state firms' management boards. We are witnessing the struggles in the tax administration, how Interior Minister Roumen Petkov is attacking the position of the customs' chief... The first 100 days passed in such overtrumping and overplaying.