Delia Meth-Cohn: Implementation of Structural Reforms Often Lags in Bulgaria

Novinite Insider » INTERVIEW | March 16, 2003, Sunday // 00:00

Delia Meth-Cohn is Senior Consultant at the The Economist Group and is chairperson of the Fourth Round Table with the Bulgarian Government, which will take place on March 18 and 19, 2003 in Hilton Hotel, Sofia.

Delia Meth-Cohn answered questions of Milena Dinkova

Q: Which are the main themes of the upcoming Fourth Roundtable with the Government of Bulgaria?

A: We expect the Roundtable to focus on three main themes. First, it will look at how the Bulgarian government can better work with the business community to implement structural reforms. The government has set the economy on the right track, has established good relations with the business community, and has a long list of badly needed structural reforms to make Bulgaria more competitive. But implementation often lags behind.

Secondly, we will look at the whole question of judicial reform. This touches on an array of important questions - creating a transparent and unambiguous legal landscape for business, ensuring that privatisation deals are carried out fairly and without delay, creating an independent judiciary, and implementing and enforcing newly passed EU laws.

And finally, we'll look at the competitiveness of Bulgarian business. Is local industry becoming more competitive? How can Bulgaria attract more foreign investment to restructure the economy faster? How can the government encourage the development of new business? What can the government do to revive the local market, without abandoning its macroeconomic policies?

Q: What do you expect from the Roundtable?

A: We expect the Roundtable to focus the government's minds on those issues where further reform is needed to help business develop. And we expect the government to explain more fully what it is trying to achieve and how the business community can work with it to reach their common goals.

Q: How do you assess Bulgaria's development in the last two years?

A: Bulgaria has never been in a better shape in terms of economic stability. The painful reforms of the last five years are showing results. Growth is picking up, exports are rising despite the difficult climate, inflation and debt are under control. This government has speeded up structural reforms which is the necessary next step to make sure stability policies bear long-term fruit. Successful banking privatisation, for example, is a key reform to ensure sustainable growth. Now the government needs to focus on following through on its reform measures to ensure that ordinary Bulgarians start to feel the gains as well as the pain of transition.

Q: What do you think are the weaknesses of Bulgaria's economy?

A: The main weaknesses for the entire economy are the poor legal environment and the lack of sufficient productive investment, either foreign or local. Too much money and effort is still wasted on state-owned companies that are not viable, which holds down the rest of the economy. And the way in which most companies were privatised in the past has slowed down restructuring.

Q: Some analysts voice the opinion that the Cabinet of Simeon Saxe-Coburg brought the end of Bulgaria's transition. Do you share this view?

A: Not at all. Transition involves two aspects: first, creating a stable macroeconomy that supports long-term, sustainable growth and secondly, restructuring the microeconomy to ensure competitiveness. Bulgaria has achieved the first and this government continues to sustain stability. But it has only recently started to make the kind of structural reforms that are necessary. Even countries like Hungary or the Czech Republic are still struggling with structural reforms that are linked to transition.

Q: Can the Roundtable help the economic reforms in Bulgaria?

A: It's much easier to talk about reforms than to implement them. What the Roundtable can do is to provide a constructive forum for business and government to focus on priorities. It can also help benchmark Bulgaria with other countries and show that the country is moving in the right direction. That positive message often gets lost in the day-to-day news of scandals and organised crime, but it is important that young Bulgarians regain faith in the economic future of their country.

Q: Do you think events as the Economist Roundtable foster the economic ties between the countries?

A: Indirectly. Many participants in our Roundtables are from multinational companies, interested in the region as a whole. The economic integration of Central and Eastern Europe has largely been driven by such companies, which have brought their new plants into a global supply chain. But these ties on the ground need support from above to flourish. Free-trade agreements with neighbouring countries, for example, make investment in this region - and in Bulgaria - far more attractive.

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