Bulgaria is the European Union’s poorest country. A country that was once called the “Silicon Valley of the Eastern Bloc,” is on the verge of social collapse. Bulgarians have been evacuating the country in alarming numbers. Here’s a look at what was once a nation with unlimited potential, transformed into a hopeless mess.
The United Nations Population Division says Bulgaria will lose 23% of its remaining population by the year 2050. For years now, the country has seen an exodus leaving home for greener pastures. Since the Berlin Wall fell, Bulgaria has been on a social and economic slide like no other country in Europe. Once, during the 1960s, Bulgaria’s high productivity levels and social development rankings made it the country a model for other socialist countries‘ administrative policies. According to Transparency International, Bulgaria is currently at the bottom of the list of most corrupt members of the EU.
An economic snapshot comparison reveals the biggest reason Bulgarians are leaving home. Today, about 23% of Bulgarians left in the country are in abject poverty. What was an industrial powerhouse in the Soviet era, is now a wobbling service (66%) industry wannabe. While unemployment is relatively low at about 6%, workers only take home about €495 euro a month. Looking at Per Capita GDP, Bulgaria’s economy is unchanged from 1973 figures. From 1980 until 1988, Bulgaria saw spikes of amazing growth figures. After the wall fell, the country sank into instability and negative growth. Only in the years prior to the Great Recession did the country recoup some of its potentials. But since the economic downturn of 2008, Bulgaria has waffled 1.32% and a high of 3.81% annual growth.
During the Georgi Dimitrov era, Bulgaria was considered a relatively privileged state within the great Soviet Union. Today, the country’s name seldom leaves the lips of Brussels decision-makers unless there’s a problem. Inside Bulgaria, only one in nine people believes the country is better off since capitalism was adopted. Consequently, 60,000 Bulgarians are leaving home each year, half of them headed to Germany. And the resultant “brain drain” caused by the best and brightest heading for better circumstances only exacerbates the country’s downward spiral.
Recent signals show the overall situation in Bulgaria is worsening, rather than improving. When Bulgarian Deputy Prime Minister, Krasimir Karakachanov called for the biggest Bulgarian human rights NGO, the Bulgarian Helsinki Committee to he shut down recently, Amnesty International and Human Rights Watch went ballistic.
Bulgaria will soon have a shortage of qualified doctors. This report tells of the average age of general practitioners being over 39. Almost 40% of the country’s GPs are over age 60, and 17% are over 65. The trend is endemic of an impending catastrophe when and if the social system breaks down completely. Luckily, Bulgaria has managed to keep its debt down to a manageable level, unlike neighboring Greece.
Bulgaria’s plight can be traced to two basic problems really. First, the European Union was never about creating a profitable and equal union of nation-states. The central powers, if I may call them that, have been about superiority and control since the Dark Ages. Germany and France will dominate and leverage, as they always have. To a lesser impact, so will the other large and/or influential members. Eastern Europe, by and large, is a big satrap geared to feed the more prosperous members. I think we can see this in trade and money flows, and in the character of characteristics of commerce. For many, this was to be expected when the Soviet system failed. But, the root cause can be traced to the communist functionaries who unseated Zhivkov. In power until 1997, these mediocre Bulgarian sellouts were not only inept, they were in power at a time when Bulgarians needed strong leadership to forge the capitalistic way forward.
Bulgarians can blame the Anglo-European hegemony that filled the vacuum when the Soviet Union collapsed. For a decade Bulgaria’s leader wheeled and dealt with the only “pimps” they could, Brussels and the NATO alliance. In 2004 Bulgaria had begged and pleaded, and bent it knees enough to satisfy the Americans. Then in 2007, the country made it to the “promised land” of EU prosperity – only for Wall Street to snatch the rug out from under. Consequently, many Bulgarians consider capitalism and western democracy a disaster today. This Pulitzer Center report tells us just how pitiful the situation in the Balkans nation is. Sadly, the story can only give us LGBT and Romany rights improvements to show a ray of sunshine from Bulgaria. Yana Paskova holds out hope for Bulgaria to finally achieve prosperity, but I do not.
Are Bulgarians right to cling to their impressions of socialist times? This seems to be the most poignant question. This Rand report from 1986 entitled, “The Challenge to Soviet Interests in Eastern Europe: Bulgaria and Czechoslovakia, it examines socio-economic and political aspects of the countries from a western strategic perspective. The report sponsored by the Ford Foundation is almost pure propaganda, wishful thinking that there was a rift between Bulgaria and Moscow. The report speaks of Bulgarian “prosperity” before 1980, at a time when Ronald Reagan was president. Rand’s author also discusses the amazing longevity of the four communist Balkan nations. Bulgaria’s “role” in the Soviet sphere is what’s most telling for my report.
Reading this strategic assessment, we see how Bulgaria held a higher status as a partner of the Soviet system. If we consider “systems” as relevant at all, then being the poorest and least respected country in the EU is undesirable as compared to the country’s status and economic prosperity under Soviet domain. Rand tells us about the Kremlin’s propping up of the Bulgarian economy. Or, as the Rand author puts it, “..there can be no doubt about the material benefits of the Soviet connection.” The report goes on to discuss the “…traditional pro-Russian sentiment from many Bulgarians that results from historical, racial, and cultural affinity.” And this goes to the crux of arguments Bulgarians were better off back when.
The Soviet Union (Russia) stood behind Bulgaria in ways the European Union refuses to. This is an aspect of the overall dysfunction of the EU overall. Brussels, or if we are more exact Berlin has not been on the side of Bulgarians or other Balkan nations. According to Rand, Bulgaria’s relative “progress” was a topic western think tanks seem to have been to come to grips with. The aforementioned report is full of rationalizations that conflict with one another, and with the facts. This is reflected by the following:
“Bulgaria’s economic progress is symbolized by its status in the framework of Comecon specialization as one of the main producers of forklifts and various electronic and electrical products.”
So, within Comecon, the economic organization led by the Soviet Union from 1949 to 1991, Bulgaria’s “role” was specialized in a way the EU and its central controlling nations have failed to emulate. Bulgaria’s top exports now are copper ore, crude petroleum, textiles (€2.75b), and packaged medicaments. Germany is Bulgaria’s biggest trading partner now, with raw copper being the biggest import, and then other metal ores, followed by men’s and women’s suits. However, if you read about Germany’s investments in Bulgaria, you’ll see claims the Germans import more cars and parts as much as they do natural resources. This is, of course, a fallacy. The main German imports outside natural resources are electrical equipment, machinery, and clothing.
Finally, if we look at the top foreign investors in Bulgaria, which are Netherlands, Germany, and Austria, we find a familiar scheme taking place. As is the case in other Eastern European countries, the Germans take advantage of low wages and tax incentives, invest in building grocery stores like Lidl and Kaufland of the Schwarz Gruppe, get revenue from Bulgarians shopping there, and send the profits back to Germany. Bulgaria is, for all intents and purposes, the Mexico of the EU. Germany is the defacto United States of the process.
And now you see the main cause for Bulgaria rapidly becoming a ghost state bordering the Black Sea. The wealth of the country, its natural resources, and human potential are being used by foreign players who profess to be part of a greater brotherhood of nations called the European Union.
What’s happening to Bulgaria is not without historical precedent. After the Great Depression Newfoundland saw it’s economy in tatters, and voluntarily reverted to a British colony in 1934. Then in 1949, the sparsely populated country became part of Canada. Oh, and there was Yugoslavia, a country that was one of the strongest nations in Europe under revolutionary statesman Josip Broz Tito.
After his death, the Anglo-European alliance decided to chop that country up into manageable parts, which left us with a handful of needy satraps owing to Brussels and the NATO alliance. One can only hope that Bulgaria does not fade into the history books like Yugoslavia. Then again, if everybody leaves the country, German grocers REWE, and the aforementioned Schwarz Gruppe won’t have anyone left to sell food to, which will be bad news for German investors. Oh, and METRO Group wholesale cash and carry centers will go broke too, while Festo looks for more cheap labor to make electrical controls. Sorry, it had to be said.
Wake up Bulgaria. There has to be a way to live the Bulgarian Dream.
Phil Butler, is a policy investigator and analyst, a political scientist and expert on Eastern Europe, he’s an author of the recent bestseller “Putin’s Praetorians” and other books. He writes exclusively for the online magazine “New Eastern Outlook.”