The incoming Bulgarian government’s agenda
(Note: Dr. Ognyan Minchev is the Executive Director of the Institute for Regional and International Studies in Sofia, Bulgaria.)
SOFIA — Elitist socialists and liberal intellectuals look down upon GERB leader Boyko Borisov with ill contained condescension or even derisive contempt. The Sofia mayor demonstrates a folksy style of unpretentious vanity, which could be compared to a Jesse Ventura populist appeal. While socialist elites graduated from the Moscow diplomatic school and collected several Harvard/Oxford-level scholarship diplomas, Borisov came out of the fire brigade section of the police academy and later on made a career with his private security business, guarding celebrities like the ex-communist leader Todor Zhivkov and the ex-king Simeon Saxe-Coburg-Gotha. He probably watched his clients carefully and learned a lot from them about the informal side of politics.
It was just Borisov’s folksy style and populist charisma that helped him on July 5 to beat soundly the stuck-up offsprings of socialist and ex-communist aristocracy like ex-PM Stanishev. The governments of the last decade were ideologically indifferent and based entirely on elitist consensus of vested interests. People viewed this consensus as highly cynical. They wanted to elect someone like them, and the leader of GERB was the best offer for an ordinary guy. Borisov is a populist not because of an affectionate charisma, but because he seems to represent the ordinary guys against corrupt and sterile elites at the post-communist top of society.
What could we expect from the government of “an ordinary guy” like PM elect Boyko Borisov? Events — more than values and interests — will shape the activities of the new GERB government in its first year in office. The world financial crisis is just rushing upon Bulgaria, having swept the United States and the West of Europe. The most optimistic prediction for economic decline is 3.5 percent for 2009, and the most pessimistic is between 7 and 10 percent. The economic team of GERB is composed of inspired neo-liberals and free marketers willing to reduce public spending and support business with the lowest possible taxes. Some key figures in local business management and prominent international experts (like Simeon Djankov of the World Bank) will be included in the GERB team at high executive positions. The country already has the lowest flat income tax rate of 10 percent, and currency board restrictions have been observed successfully for 12 years after 1997.
Yet neo-liberal orthodoxy will not prove enough to pull the country out from the crisis. On the one hand, Bulgaria is among the countries with lowest living standards in Europe (its GDP in PPS is only 40.1% of the European average), and additional factors like unemployment growth, welfare restrictions and reduction of wages will further endanger fragile balances of society — mass scale emigration of young people may resume, public education and healthcare could worsen even below their poor present status. On the other hand, Bulgaria’s economic system suffers primarily from a general inefficiency of institutions, both public and private, which is the key structural issue of economic and social improvement. The challenge of institutional inefficiency does not come from an alleged complexity of institutional reform, but from the vicious circle of oligarchic control upon the public institutions.
Like most post-communist countries, Bulgaria performed tough simultaneous political and economic transformation, in which major economic assets were appropriated by the networks of ex-communist regime officials. After integration in NATO and the EU, a specific social contract was signed between Eastern European nations and their ex-communist and new capitalist elites. Citizens will not ask about the shadow origin of the new wealth possessed by the old guard apparatchiks. The new business elites, based on old regime power resources will observe law and order, the rules of democratic Europe. This is a social contract that the majority of Bulgarian new and old elites refused to sign.
Strong networks of vested interests — semi-legitimate by origin and semi-criminal by their activities — have established full-scale control upon the public institutions, and their business is focused entirely upon illegal draining of public resources in private hands. This is a system that has no reference to market or to competition. This is a system of criminal corporate control over state and society. This is a system of structural corruption at all levels, a system of power and wealth, which has to be disintegrated, in order to achieve decent environment within public institutions.
Will the GERB leader — and the GERB government — have enough determination, political will, and resources to clash with the corrupt system of corporate oligarchy, which jeopardizes Bulgaria’s chances of decent membership in the community of democratic nations? We don’t know yet. We could presume two basic options of governmental strategy in dealing with the issue of institutional reform. The first option means nothing less than a war against organized crime, which springs out of the institutions of the state. It requires punctual investigations, merciless transparency, and an efficient justice system against criminal vested interests behind the public scene. This war we cannot avoid if we opt for decent and high standards of institutional performance, which are obligatory within the EU membership. If we need to restore the trust of our partners, to open the gates for EU funding, to achieve acceptable levels of affluence and security – we have to open and win this war.
Yet it is a risky endeavor for anyone’s political career to embark upon such a tough ticket — to oppose the real seat of wealth and power in post-communist Bulgaria. This is why the GERB government might go for a second option — to a campaign of imitated justice restoration, in which some key political figures or shadow dealers might be really prosecuted with great publicity while the real infrastructure of illegitimate oligarchic power is left untouched. This is a risk, which also involves the authoritarian temptation to substitute real institutional reform with a public manifestation of a “strong hand,” which ordinary people can endorse in their search for security and justice.
The span and the depth of institutional transformation will be the key indicator for the GERB government success in office. The other basic tasks of this incoming government might be enlisted as follows. First, concentrated effort in developing national infrastructure could not be postponed any longer. Bulgaria has probably the worst road system in Europe, and the funds — both national and European — for road construction were either misappropriated by previous governments, or simply not utilized on purpose. B. Borisov has already declared highway construction as a basic priority for his government, yet the list of infrastructure emergencies goes well beyond highways only. Urban traffic, urban plumbing, water systems, and resources — those are only the first points in the list.
Another urgent concern is Bulgaria’s energy strategy. The previous government — heavily assisted by Bulgaria’s president Georgi Parvanov — has adopted a number of energy projects, putting the energy system of the country entirely in the hands of Russia’s Gazprom. A nuclear power plant in Belene should be constructed by Russian Atom-Export-Story, employing Russian nuclear technology, Russian fuel, and Russian investment. The single big oil refinery of Bulgaria, Neftochim Bourgas, is owned by Russia’s Lukoil company. Bulgaria signed two major contracts with Gazprom — one for the South Stream project and another one — for a 35-year period of gas supplies and gas transiting through Bulgarian soil. Bulgaria joined as minority shareholder to the oil pipeline project Bourgas-Alexandroupolis, designed to transfer Russian oil to the Aegean coast. Taken together, all those projects put the country into almost 100 percent energy dependency from this single source — Russia. It’s a position of vulnerability for a country like Bulgaria — to be member of NATO and the Euroatlantic security community, to be part of the EU as an economic, political, and values-based community, and to sustain this full dependence upon energy from Russia. A government, respectful to Bulgarian national interest should opt urgently for diversification of the national energy portfolio. Bulgaria has to maintain a strong partnership with Russia while insisting on its independence and membership into the community of Western nations.
The new government has to go for an active and pragmatic foreign policy. The legacy, which GERB receives from the Triple Coalition, is unenviable. Bulgaria is a relatively small country, which could hardly make a difference in a global scope, or even within the larger European context. The Balkans and the Black Sea region are both dimensions of Bulgarian foreign policy activities, a position that could really place the country as a valuable partner in international community. Both the Balkan and the Black Sea dimensions were in effect deserted by the outgoing government — partly for an absent strategic capacity, partly for ill-considered concerns about potential discords between Sofia and the major regional powers — Moscow and Ankara. As a Balkan and Black Sea country, Bulgaria has to initiate strategic proposals for both regions for the EU strategy-making process.
Finally, the preference of partner(s) by GERB in governing the country may make a significant difference. GERB has 116 MPs, which is close to, but short of, a parliamentary majority. The format of the incoming government is an open issue. The first option could be a minority government of GERB, supported by smaller center-right fractions like the Blue Coalition and Order, Law, and Justice (OLJ) Party, and by the radicals of “Ataka” Party. The minority government would provide a coherent start, but it takes serious risks in the longer run. If the smaller parties are not involved in power-sharing from the very beginning, their situational interest may easily depart from the GERB government activities, in particular in periods of real hardships and tough challenges.
A second option for government is the coalition in the European People’s Party format — GERB plus the Blue Coalition. This option involves minimal power-sharing, but it is subject to an uneasy personal relationship between both leaders — GERB leader Borisov and the ex-PM Ivan Kostov, heading the Blue Coalition. Bringing a third party — the OLJ populist leader Yane Yanev — into the formula could widen political support, yet add to unpredictability of political balance within the coalition.
Borisov has a very strong personal control over the decision-making process of GERB, which adds stability to the expected government performance, but also brings the risks of identification of personal failures with the complete failure of the party in government. Both GERB and its leader are quite inexperienced in political process at national level, which opens the door for unexpected opportunities and for dangerous risks. Partnerships with the parties, sharing closer identities, might help in bringing better stability to the government process.