Who Plays the First Violin?
A month ago, during a meeting of the Bulgarian Business Leaders Forum with Prime Minister Plamen Oresharski and members of his cabinet, I told them we all play in one and the same football team – business people play forwards and score goals, while, ideally, the state takes on the role of a goalkeeper and pass the ball from time to time.
Everybody agreed that the comparison is quite relevant.
The comparison, in fact, had come to my mind while reading Businessweek annual survey – a respected analysis by respected media, which clearly paints the picture of how things are in today's economy at the end of every year.
But this year the analysis was different – it featured an Eastern European country.
It does not take an expert to guess that country was Poland.
Pitched against the protests and political instability in Bulgaria, the surprisingly protectionist policy of the government in Hungary, the lack of any government in the Czech Republic, Poland naturally stands out as the only Eastern European candidate eligible for this type of contest.
What is striking and newsworthy however is how Poland became Europe's most dynamic economy, overtaking western countries it could not even dream about catching up with a decade ago.
The factors, which paved the way for Poland to suddenly find itself in a position of envy, include a very important ”detail”: in fact it holds true not only for Poland, but the whole of Europe.
Here is Businessweek quote:
“Poland has a large internal economy, a business-friendly political class, and the hypercharged potential of a developing country catching up with its western peers.“
Businessweek analysts have hardly had even the slightest idea how important this detail could be with reference to Bulgaria.
Ever since the fall of the Iron Curtain, Poland has served as a model of free-market economics for Bulgaria. But while in Poland all governments without exception implemented aggressive measures to free the country's economy and begin its recovery, in Bulgaria each government insisted it should implement its own economic concept – short-term, unsuccessful and often of dubious merits.
Bulgarian economy's most valuable assets – the Currency Board Arrangement and low taxes – were not sufficiently advertised abroad and failed to act as a bait for what was expeced to be a shoal of foreign investors.
This is the reason why Bulgaria's current government, headed by Plamen Oresharski, faces an uphill battle. Anti-governmental protests aside, the cabinet is heading into a make-or-break period of six month. It is crucial that during this period the ministers prove they are professional captains, who know how to steer the ship in the right direction amid the stormy waters of the social-economic ocean.
I have no doubt that the government wants to see Bulgaria's economy recovered. They are all professionals and Bulgaria's business does need business'-friendly political class, just as in Poland.
True, the package of measures, which will gradually come into force as of the beginning of 2014, gives the hope that change is underway, but it is far from qualifying as a “certificate of love”.
Bulgaria's business is now trying to learn to play the piano, but if the piano is out of tune, don't blame the pianist, please.
Business can't do well without a business-friendly political class. This holds true primarily as far as the country's promotion abroad is concerned. Bulgaria has taken a few steps in this direction, but certainly not in the most confident and professional way.
Bulgaria is yet to write its message to the world, create a good and easy to remember logo, build its image and promote it abroad.
This is where everyone, who cares about Buglaria's economic recovery, should start. If the political class claims to be business-friendly, it should take special care to promote Bulgaria around the world only as a country good for doing business, nothing more, nothing less.
Truth is, Bulgaria is really a country good for doing business.
This is a country, which offers unlimited opportunities for doing business and I am absolutely serious in claiming this. But it takes a lot of efforts and a good sense where to put those efforts in and how to choose your partners. There is no other country in Europe, which offers so many vacant business niches, so low taxes, so many business organizations, eager to convince the government in office all they want to do is transparent business with good profit.
The way Oresharski government treats Bulgaria's business will be crucial for its future, not the street and the protests.
In the meantime don't blame Bulgaria's business to playing out of tune as it learns how to play the piano amid the new circumstances.
Bulgaria's business and the government are not just part of one and the same football team. We are part of one and the same orchestra.
But in this orchestra it is the government, which plays the first violin.
*The article was originally published in BGNES news agency
I call it the Bulgarian Blockhead mentality, where it is quite ok to screw your own people, but heaven forbid if any other nation criticises Bulgaria or Bulgarians or “stains” Bulgaria’s image. Well, Bulgarians do an excellent job in staining their own image, so it is ludicrous to point the finger at others. They are at complete odds with the rest of the world. Where else do people nod for “no” and shakes their head sideways for “yes”. There is great rhetoric everytime Government changes, but it’s business as usual in being a corrupt and untrustworthy society in Government and other Authorities and where the Political Mafia get away with “Blue Murder” - all very unjustly.
I don’t see my analysis as being overly harsh, but I observe as a Bulgarian, albeit I was born in Australia; but that isn’t my fault, I blame Hitler and Stalin and WW2 for my and my family’s fate and circumstances. I am lucky to be born in the “Lucky Country”, but I was also robbed of my rightful heritage and family – Blood is thicker than Water.
Yes George, "Obviously Bulgaria is doing something wrong." And yes, BG is clearly out of its league in many ways.
I think it has to do with the fact that for all those years, well decades, Bulgaria was cossetted comfortably by Big Daddy Soviet Russia and living comfortably under its umbrella; and where all the thinking was done for them. There was a format in place to be followed and nobody had to do anything extraordinary, creative or to be inventive out of the matrix. So consequently Bulgarians became too comfortable and insular in that type of society and nobody had to stretch the boundaries to exceed to be anything more; thus they didn't grow with the rest of the world, nor were able to gain experience in how things operate on a global scale outside of the Soviet sphere.
Came the time in 89/90 when things changed and Bulgaria transited to a so called democratic system and that's where the problems started, and Bulgaria was definitely out of its league of how to begin to function independently or even to function at all. The transition period and the confusion and turbulence at that time, was the perfect environment for a rush of power and corruption to form and take place. So the certain elites of the day paved the way to their own success and rewarded themselves handsomely under the guise of a democratic system and they all got away with it. They all had their own version of how to do things, but in effect nothing positive was achieved in the development of Bulgaria, and things just went downhill from there.
Meanwhile it became very clear that for the next few years, many years, that nobody had any idea how to run a sovereignty and it became a great period of stagnation, extreme poverty and disillusionment for the general population. So then the powers that be, decided it was a brilliant idea to become part of the EU after it was formed, and made the push to become an EU member state. This was to be the great salvation for all, in being part of the EU, and it was seen and promoted as the answer to fix all the problems. But guess what, it isn't working either. That's because Bulgaria has never learned how to function properly on its own merit and develop trade and resources and to grow wealth independently of anyone. So it is not a question of whether to trade with the East or the West, the fact is, BG does not function at all within itself. Basically the left hand has no idea what the right hand is doing and that's how it has always been. That's the main problem that has manifested in its entirety and is why Bulgaria is a totally dysfunctional Nation. And that is how it is seen internationally – dysfunctional and corrupt.
I'm sure my little Turkish friend Gosho's demands for Bulgaria to turn into the Las Vegas of the Balkans have absolutely nothing to do with recent under the radar law change in BG which means that only casinos belonging to Oreshaskys pal the Skull can operate in BG. try accessing any gambling website not belonging to the Skull whilst in BG and see what happens. Just a "coincidence" eh, Georgi boy?
One thing I can guarantee to you is that Asians love gambling. They are addicted to it and that’s one of the reasons why Macau outgrew Vegas 10 times already. There is an opportunity for gambling tourism in Bulgaria and frequent visitors from Japan, China, Korea etc. if every major Bulgarian resort feels and looks like Vegas. Just imagine enjoying the slopes and the beaches and gambling in the casinos at the same time.
Here we definitely have some form of solution for Bulgaria and its prosperity.
I just don’t know how “ready and willing” those Bulgarian governments are to “address the issue”. (Bulgaria becoming the gambling hub of the EU)
Just note that only for one day Macau generates the weekly revenue of Vegas.
Read the article from WSJ below please.
Yeah Mat and Sasha there is truth in both of your statements. Bottom line here is that BG is a nice piece of real estate and everybody wants a piece of it.
Anyways what we need here is a solution and something must be done, things cannot continue like this and all options should be on the table. Options like increasing trade with Russia and leaving the EU and etc. Whatever the case may be and whatever brings prosperity to the Bulgarian people and the country.
The fact of the matter is that there is growth in the emerging markets and countries, which have absolutely nothing to do with Europe or the EU, are experiencing some of the highest growth. Many of them are ex soviet republics like Kazakhstan, Azerbaijan, Turkmenistan, Uzbekistan, Tajikistan and etc. Also countries like Armenia, China, Mongolia, Laos, Thailand, Indonesia, Georgia, India, Pakistan even neighbouring Turkey and etc. way too numerous to mention all (all of the above with 5% or higher growth for the past few years).
Obviously Bulgaria is doing something wrong.
The EU’s GDP fell behind the US with almost a trillion dollars and China is steadily catching up.
Here some links with info.
Bulgaria sure could utilize some loans…
And the end of the day many things are happening in many parts of Europe and Eurasia but Bulgaria continues to be stubbornly at hold.
.....;-).....One remark only, mattbg: what to "extort" and whom to "pressure" on, when the key branches of BG
economy are in the no Russian, but in the "sure Western" hands today, any doubt? Well, what about "Maritsa Iztok-1,3" energy complexes, which are in the USA businessmen hands now?, yeah, those very businessmen who sharply increased the electricity prices in early 2013......with all the well known consequences.
The problem, the REAL problem for the modern Bulgaria, Matt, is not the mythical "Russian pressure" but the REAL
CONTROL over everything which is of interest in BG for the Western Masters. Do open Your eyes, Matt, everything
is so obvious in this sad story.
the problem is george that the chinese have been over a number of times in different business areas, and each time they dip a toe, the government/mafia screw them, so the chinese don't want to trade here either.
fact is only russia want to trade with BG, as their government/mafia are far more experienced in extortion and "business pressure", and teach the BG amateurs a lesson every time.
"It's political classes of all stripes are mired in corruption. The bureaucracy in setting up and running a business is truly horrendous. It's labour market is under-skilled due to poor investment in education and is prone to leaving for new places. It's utility infrastructure outside the capital area is under funded and run indifferently. It's not that great in the capital - yes you can get a net connection but you can't get a reliable electricity supply"
This in some degree describes the bottom line here. Which is: no results. After 23 years trying to be "European" and trying to play in the major league games of Western capitalism BG must realize that it is out of its league. Bulgaria cannot compete wih the major EU economies and it should diversify its trade focusing on similar emerging market economies in order to be able to build some wealth.
Of course Bulgaria has been in Europe since time exists and should continue to enjoy its common cultural heritage in music, arts, cuisine etc. but when it comes to economics I'm afraid the country is "out of its league". Needles to even mention that the country's location is more predisposed to trade with the East rather than the West.
Bravo George! I am happy that you are proud Bulgarian, but you should also be proud of your Turkish roots, it is not something to be ashamed of. Anyway, this still doesnt alter the fact that I agree with your recommendation for Bulgaria to turn its back on Europe and trade exclusively with those countries whose values you share - Turkey, the Middle East, China, North Korea, Zimbabwe etc.
Bravo George! My ethic Turkish Bulgarian brother George is absolutely right. Bulgaria should immediately stop looking west and instead turn to the more progressive countries such as Russia, China, Zimbabwe and North Korea to become our major trading partners and models of the democratic values that Bulgaria aspires to.