A Microcosm of Bulgarians' Plight

Views on BG | April 4, 2013, Thursday // 16:26

The Economist

by G.K.

Looking at Kaolinovo’s newly built playground with its red slides and green swings, one might wonder for a moment which western European town this is. But then one turns one’s head and sees a tumbledown, windowless building. And only a quick look at the run-down, oversized Soviet-style administrative buildings around the main square makes one realise that Kaolinovo must be somewhere in eastern Europe.

Kaolinovo is the town with the highest unemployment rate in Bulgaria. Over 64% of the workforce in this municipality in north-eastern Bulgaria are without a job, five times the national average. Bulgaria ranks among the worst performing European Union (EU) countries for employment trends since the beginning of the global economic crisis, according to the Economist Intelligence Unit. Almost 430,000 jobs have disappeared since 2008. More than half of unemployed have fallen below the poverty line. As a consequence of poverty, unemployment and high utility bills, Bulgaria saw the largest nationwide protests in 16 years during the last two months.  The demonstrations put an end to Boyko Borisov’s centre-right government. Six people set themself on fire during the demonstrations. Four of them have died.

Back in Kaolinovo, Dimitrina, a middle-aged shopkeeper, admits she doesn’t understand politics. She points to the shelves in her store: “I have 40 breads and I cannot sell them since yesterday. People are penniless.” A few who work on “the Project” are employed, she says meaning the couple of dozens construction workers renovating the main square and the children’s playground , a project financed by the EU. The rest of the municipality’s 12,000 people, predominantly of Turkish ethnic origin, are either jobless or work on the tobacco fields. Few lucky ones, says Dimitrina, have a job at a nearby mining facility for kaolin,  a white rock used in the paper and porcelain industry that gives the town its name. “Before the factory employed 500 people, now it’s no more than 20-30,” she says.
A few hundred metres away from her store, Sevdalin has a similar story to tell. The old man runs a “Store for 1 Lev”, a cheap shop that sells everything from cosmetics to church candles with prices that rarely exceed one Lev (half a euro). Despite the prices, however, the store is empty. “Whatever it costs, when you don’t have any money, you simply can’t buy anything,” says Sevdalin with a sad smile on his wrinkled face.

Six years after joining the EU, Bulgaria remains its poorest member. People in the 7.3m country earn an average monthly wage of €400($520) with pensions of less than half that.  According to a new report by the European Commission, nearly half of the population is at risk of poverty or social exclusion. Unemployment rose to above 12% in February, the highest since 2005.

“The half a million job losses in the last four years are the main reason for the stagnating household incomes and the increasing burden on the social budget,” says Georgi Angelov, an economist at the Open Society Institute in Sofia. Excluding EU funds, nearly half of the state budget is allocated for social spending.  The employment crisis hit those without educational qualifications the worst: just 15.5% of Bulgarians with a basic education are employed.

This helps explain the high jobless rate in Kaolinovo where two thirds of the people have never made it to middle school. “I may not have been to university, but I can count the money I made so far today,” says Sevdalin. “It’s zero.”

Sevdalin and Dimitrina’s stores may be empty but there is one place in Kaolinovo that is full people, mostly young men: the betting shop. Drinking beer and watching football games on a Monday afternoon, most men are engaged in lively discussions about the next championship game. “They come here every day,” says Ognyan, one of the older visitors, who is sipping coffee at the bar. “They have no work so all they do is bet.” Are they trying to find work? “No, football offers much better odds.”

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Tags: kaolinovo, unemployment, Bulgaria

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