Prof. Dr. Melanie Sully

Book on sustainable governance ed Dr Melanie Sully

Our annual publication on good governance in the Black Sea Region edited by Prof Dr Melanie Sully (2014) Extract here on Bulgaria

BULGARIA: SUSTAINABLE APPROACHES FOR GOOD GOVERNANCE

Marin LESSENSKI
Director, European Policies Initiative (EuPI)
Open Society Institute, Sofia

In 2013, Bulgaria witnessed two waves of civic protests, one in February 2013 and another that started in June 2013 and continued for months. The two protests had put forward different demands and apparently had different underpinnings – more social-economic in February and more pronounced political ones later in the year, demanding accountability and morality in politics.

Despite differences in grievances and demands, both waves of protests had one thing in common – popular requests for reconsidering the transition period, which started in 1989 and arguably still continues. For many, there is also total rejection of the past 24 years from two very different perspectives – one maintaining that the transition was manipulated by the former communist elites in their favour and the other by those nostalgic for the bygone “socialist” era.

However, rejecting everything is a strategy that leads to nowhere. The popular disillusionment and the existing deficits in political, social or economic conditions cannot erase tangible achievements of the country.

This dilemma presents an opportune moment to dwell on sustainability in the broader sense – whether in regard to the political developments or specific policies that enveloped Bulgaria in the past. This might point to the causes of current civic discontent and lessons learnt for the future and other countries. The “sustainability deficit” is a real issue in Bulgaria as it can be argued that problems in healthcare, education and public services in general are caused by the inability of governments to fully follow through given reforms. More often than not, governments have preferred to backpedal on their decisions for the sake of satisfying potential voters. Populism has been practiced not only by populist parties per se, but mainstream parties have resorted to it as a vehicle to advance their short-term goals, without considering the corroding long term effects.

The Erosion of the Party System and the Impact on Governance

Arguably, the development of the country in the recent past has been held hostage to two unwelcome processes in the party system. First, there has been fragmentation of the system with quick cycles of appearance and disappearance of new parties and second, the proliferation of anti-systemic and populist parties. These have negatively affected “sustainability” as defined here, making it very hard to reasonably debate, introduce and maintain necessary policy reforms that are not the result of populist pressure and unhealthy compromise.

While the early transition period was characterized with a relative clear system, consisting of the former communist party - Bulgarian Socialist Party (BSP) - and the anti-communist reformist bloc – Union of Democratic Forces (UDF) and the party of the ethnic Turkish minority as the third big player), 2001 marked a new beginning with the return of the former tsar Simeon Saxe-Coburg-Gotha. Simeon came back shortly before the elections in 2001, established a movement in April and just in June the same year won a sizable chunk of the vote, consequently forming a government with the Turkish minority Movement for Rights and Freedoms. The promise of Simeon to fix the country in “800 days” became proverbial, but of course nothing like this happened.

However, the legacy of Simeon II in politics was clear – anyone with “charisma”, and some sort of populist promise can easily beat the established parties. There are some cases in point. In 2005, the newly established extreme nationalist Ataka entered parliament with 8.14% of the votes. Its leader Volen Siderov came second in the presidential elections in 2006 and the party has been in every parliament since then and had members in the European Parliament.

In 2005, Boyko Borissov, the energetic former secretary general of the ministry of interior under Simeon, decided to enter politics and won the mayor seat in the capital of Sofia. At the end of 2006, he established his GERB party (abbreviation of Citizens for the European Development for Bulgaria), which took the popular vote in the 2009 parliamentary elections. GERB formed a government that lasted from June 2009 to February 2013, when it resigned in the face of protests.

The advent of such parties meant a heavy blow for the mainstream parties. The reformist Union of Democratic Forces, which was still on power when former tsar Simeon came, was dealt and heavy blow, going from 52.26% in the 1997 elections, to 18.18% in 2001 and the party’s successors did not make it to parliament in 2013. In a similar vein, the powerful former communist party got only 17.15% when confronted with Simeon’s movement in 2001 and it took them years to recover to a slightly better form. But even they had to form coalitions in 2005 and 2013 to be able to form cabinets.

Only the Movement for Rights and Freedoms sustained its results, but it functions on completely other basis as it controls almost fully the Turkish and Muslim community in the country.

But as evidence suggests, populism turned out to be a very good vehicle in the short term for a given party or leader, but not very good to sustain its results. It is rather a “hit and run” tactic. Simeon’s movement now is just a mere shadow of itself, reduced to below 1% support. Ataka party, whose leader had the presidential post within its grasp in 2006, oscillates between 1.5% and 3% support (at the end of 2013), slipping back from the 7.30% of votes they received in the May 2013 parliamentary elections.

The consequences of the party system fragmentation arguably come at a heavy price for politics and governance of the country, because of at least four challenges. First, the corrupting lesson that nearly any newcomer can challenge the established parties with a populist promise – including the marriage of populism and extreme nationalism that Bulgaria may be witnessing. Second, this mode of behavior all but replaces the normal political discourse and even the need of party programs becomes obsolete. Third, even relatively mainstream parties are tempted to compete with the new phenomena using similar methods of trumping promises.

All these phenomena negatively affect sustainability as defined in the broader sense in at least several ways. The party system is volatile as parties come and go and as they are as a rule centered around a “leader”, the moment the leader goes, the party goes down with him/her. In terms of governance, it is difficult to impossible to carry out necessary reforms, which are always linked with painful period of restructuring. In other words, it becomes a challenge to put long-term benefits in front of short-term thinking.

A very indicative case in point can be provided with the pension reform. Bulgaria has probably the worst demographic situation among EU members[1] , but has been withholding a retirement reform for years because it would meet backlash from certain professions. The cabinet of GERB finally undertook steps, under pressure from the European Commission, in 2011 but the reform was never started. The new government of the BSP and MRF from May 2013 decided to scrap the plans, freeze any retirement reform and start new deliberations – possibly as retirees are BSP’s main constituency. The EC assessed the situation in its “Europe 2020”, EU’s growth strategy for the decade:

“Retirement reform: Bulgarian workers leave the job market earlier than the EU average. Ensuring the adequacy of pension provision - and increasing the supply of labour – depends on further measures to encourage Bulgarians to contribute to the system over longer working lives.”[2]

A Good Model: the added value of the currency board

But while developments in the party system and the ramifications for public debate and public policy can be a warning lesson, the country can offer examples of successes. After all, the country managed to implement reforms and join NATO in 2004 and then the EU in 2007 – despite all the up and downs.

One of the points that can be commended is in the realm of economic and financial policy – i.e. the currency board. Bulgaria introduced the currency board on 1.7.1997, which enjoys political and public consensus. The literature and debates on the usefulness of currency boards in other countries have diverse assessments, but it can be argued that for Bulgaria it had a beneficial effect not only for the economy and people’s daily lives, but also brought with it tangible effects on governance and policy making.

Bulgaria mismanaged political and economic transition in the early 1990s which led to a severe financial crisis under a socialist government in 1995-1996. The monthly inflation in January 1997 was nearly 500% and in March 1997 it was over 2000%. The BSP-led government decided to resign in February 1997 and open the way to a political solution. A new centre-right government of the Union of the Democratic Forces came to power to advance the European agenda of the country, jump-start the accession to NATO and introduced pro-market reforms.

But the efforts were underpinned by the introduction of a currency board in 1997, whereby the national currency lev was pegged to the German Mark. This continued unchanged for over 15 years and after the introduction of the Euro, the lev is pegged to the European currency.

The debate on pros and cons of currency board regimes in general notwithstanding[3], the statistics clearly demonstrate the effects for Bulgaria. Inflation was slashed to 1% by 1998[4] and has varied within reasonable limits since then. Businesses and the people had a broader horizon to plan and carry on their activities. In addition, the path towards EU membership (Bulgaria was invited to start negotiations in 1999) created the necessary framework for long-term positive development. This overall environment brought increased FDI flows and the gradual growth of the GDP which grew by 42% between 2001 and 2011, according to Eurostat[5].

The currency board came with at least several very beneficial conditions: first, the central bank (Bulgarian National Bank - BNB) became largely independent from political interference and second, the government could not print money and third, the central bank is longer a lender of last reserve for the commercial banks. Thus, undue political or private interest interference was limited – at least to an extent by the currency board stipulations.  The governments had to be careful what they spend and control on banks became much stricter (the collapse of the banking system in 1995-1996 is still a bitter lesson).

This was accompanied by government debt reduction. From 108.3% of the GDP it was slashed to 13.7% in 2008 and rose only slightly to 18.5% in 2012[6] – the second lowest in the EU after Estonia. The fiscal policy helped the country escape the greatest shocks of the world economic crisis and the EU stated in 2013 in the country’s Europe 2020 implementation that:

“Bulgaria's public finances are strong overall. Maintaining this sound fiscal framework is a condition for delivering on the important reform agenda which must be pursued in the coming years.”

This is a reminder that while the currency board and fiscal discipline are to create pre-conditions, they cannot substitute further efforts and reforms of public services, where the country is falling behind.

Conclusion: sustaining the rules of democratic governance

The current text provided two cases – an example of the political processes, which undermines sustainability through the fragmentation of the party system, erosion of rational public debate and diminishing accountability in politics and decision-making. There was also the opposite example - a sustainable policy – the currency board, which undoubtedly is having numerous beneficial effects not only on the economy, but also on policy making in general.

The parallels have not gone unnoticed and some Bulgarian observers have even called vaguely for introducing a kind of “political currency board” – e.g. set of rules to guide politics, hoping that a technical solution could have a similar positive effect on politics and policy making in general.

Unfortunately, this experience is not directly transferable and there is no magic wand for the domain of politics. The priority of political parties in the country should be to regain the trust of people and to help regain trust in public institutions. According to a recent survey only 7.3% of respondents have trust in political parties. Trust in the current parliament is only 9.8% and in the government – 15.2%[7]. This is well below reasonable and sustainable levels of legitimacy, necessary for good governance. It is a fact that there is an erosion of public trust in parties and institutions across the EU. The Eurobarometer latest survey[8] says that the average trust in the EU27 in political parties is at 16% (15% for Bulgaria), 25% in the government (16% for Bulgaria). But this is no consolation and excuse to keep the current state of affairs. It is also a two way process - there should also be a sustained effort also on behalf of the citizens themselves to get engaged in public issues and interested in politics to hold decision-makers accountable and improve governance.

Fortunately, there is evidence of a growing understanding that democratic governance cannot be sustainable just through elections every four years. The civic protests of 2013 in Bulgaria are an encouraging sign that citizens are becoming more demanding and participate more actively on a daily basis – this will ensure politicians abide by the rules in the future.


[1] EU Employment and Social Situation - Quarterly Review - March 2013 - Special Supplement on Demographic Trends. Available at  http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KE-BH-13-0S2/EN/KE-BH-13-0S2-EN.PDF

[2] European Commission, Europe 2020 in Bulgaria. Available at http://ec.europa.eu/europe2020/europe-2020-in-your-country/bulgaria/index_en.htm

[3] See Roumen Avramov, “Economic and Political Challenges of Acceding to the Euroarea in the post-Lehman Brothers’World”, 2009, EuPI, OSI-Sofia. Available at http://eupi.osi.bg/fce/001/0066/files/SummaryReport.pdf

[4] Anne-Marie Gulde, “The Role of the Currency Board in Bulgaria's Stabilization”, http://www.imf.org/external/pubs/ft/fandd/1999/09/gulde.htm

[6] National Statistical Institute, http://www.nsi.bg/spagebg.php?SHP=1&tab=4#cont

[7] Open Society Institute – Sofia survey, published July 2013.

);Details  here and below in Introduction by Melanie Sully


 Full version and details of rest of book here:

Introduction

Melanie SULLY

Executive Director, Go-Governance Institute
Professor, formerly in Political Science, Diplomatic Academy, Vienna

This book[1] continues the series looking at good governance in the Black Sea Region and builds on the last conference held in Istanbul based on the theme of dialogue. The Black Sea region is faced with a number of challenges on sustainable governance, how to build on progress achieved, how to avoid slipping back to the past and finding strategies for faster implementation of good governance (ie “rule of law, legitimacy, trust, accountability, checks and balances, effective institutions, coordination and strategic management”)[2].  Many countries exhibit what can be described as a “sustainability deficit”. This book looks at what reforms are best suited to sustain democracies over time and which have been most successful to date eg media freedom, fighting corruption, constitutional reform. It shows weaknesses too and examines what policies may best suit future sustainability in the realm of good governance such as educational, cultural, ecological and people-to-people projects.

Jakub Forst-Battaglia puts the topic in an historical context and looks at the conflicts in the Austro-Habsburg monarchy revolving around the memorable years of 1914-18. A number of complex solutions were put forward then for salvaging multi-national structures including federations. In this process education and culture often played a pivotal role.

The Assembly of European Regions is concerned with building stable societies in the twenty first century and has rich experience in sub-national governments and in promoting territorial diplomacy. One area of priority is on culture, small-scale people-to-people projects, stressing the need for being close to citizens in a kind of “governance on the ground”. The Assembly is currently under the leadership of Dr Hande Bozatli from the Black Sea country of Turkey.

Kornely Kakachia and Levan Kakhishvili examine Georgia and recent elections as indicators of sustainable democracy mentioning the achievement of a peaceful transfer of power while pointing out the challenges for the future. The authors also examine the important role of personalities in the party system.

Kamal Makili-Aliyev points to the difficult starting position of his country Azerbaijan in the early 1990s and detects progress in foreign policy (described as a “survival tool”) and economic development. The author is nonetheless aware of major challenges and the role of best practices as a guide to future sustainable governance.

Gevorg Melikyan sees the low accountability of government and weak opposition as holding back progress in Armenia. The increasing use of social media though by civil society has the potential to increase the pace of democratisation. Here the sustainability deficit is a major challenge for the government, weak political parties and civil society alike.

Oleg Smirnov on the Autonomous Republic of Crimea looks at community and civic institutions as indicators of sustainability and the role and responsibility of NGOs which often lack skills, awareness and “courage” to promote sustainable good governance. Therefore he stresses the importance of training and effective public consultation.

Sergii Glebov writing against the background of dramatic developments in Ukraine explains the choice his country faces between two integration models explaining the background to the protests and implications for sustainable reforms. The collapse of the Association Agreement threw up a veritable dilemma of sustainability in this large but vulnerable country.

Jean Van Acker and Svitlana Fesenko for EUBAM explain the importance of border management (between Ukraine and Moldova) for sustainable reforms in the Black Sea Region in fighting corruption and smuggling. Training strategies help promote positive good governance in this effort.

Sergiy Gerasymchuk leads projects concerned with the relationships between Romania, Moldova and Ukraine and here examines the potential for instability in the republic of Moldova. As in Ukraine he sees the role of both the EU and Russia as important added to the specific part played by Bucharest. He concludes there are some difficult choices ahead which could affect outcomes on good governance.

Cristian Gherasim looks at changing communications technology and social movements in the Black Sea region with particular reference to Romania. He sees that social media can act as a catalyst for protest and change but also be a factor in maintaining sustainability.

Marin Lessenski also mentions a sustainability deficit with reference to Bulgaria and rising protests stemming from government’s inability to carry through reforms.  The weak, fragmented party system lacks sustainability. There is however an increasing understanding that civic involvement is necessary in between elections to overcome this deficit and maintain good governance reforms.

Igor Uznarodov looks at the delicate situation in the south of Russia and the difficulties in the recent history of the country as well as the endemic political culture. The author stresses the importance of external benchmarks for progress and education to ensure sustainability of reforms.

Basak Alpan looks at what she calls the Gezi “event” in Istanbul, Turkey which involved clashes with the police highlighting a gulf between elites and protestors not wanting decisions on big projects or their way of life being made in their name without civic participation. Here as elsewhere where unrest has recently dominated the agenda, it is too early to say what the outcomes are likely to be for the sustainability of good governance. Elites and governments can no longer rely on a passive population but are being increasingly challenged by a buoyant civil society.

Alexandra Dancasiu and Josef Mantl look at the classic interpretation of sustainability with respect to the global environment and climate change which impinges on the future of the Black Sea region and its peoples.

 

 



[1] Contributions to this book were mostly written, researched and completed by the end of 2013/beginning of 2014.

[2] Taken from „Recommendations for Ukraine“, James Sherr, Chatham House, London in Digest, Security in an Insecure World, 6th Kyiv Security Forum, 2013.