Democracy and Governance in Bulgaria
The Development Challenge:
Bulgaria's transition to a fully-functioning, free-market democracy is marked by strong public support for full Euro-Atlantic integration. In 2004, the country achieved its primary foreign policy goal of entering NATO, finalized negotiations with the European Union (EU), and is expected to sign its EU accession treaty in early 2005, thus making EU membership in 2007 almost certain. The country has asserted itself as a stabilizing force in Southeast Europe. Bulgarians have a clear sense that their future lies with the political, economic, and social values of the West and are eager for that future to arrive.
U.S. national interests in Bulgaria are two-fold: Bulgaria remains a dependable and reliable ally in the war on terrorism and has the potential to continue as a stable political and economic anchor in Southeastern Europe. In this context, after U.S. presence in Bulgaria for 15 years, Bulgaria has demonstrated repeatedly that it is a staunch friend of the U.S. and a reliable partner in a conflict-ridden region. USAID believes that by the time USG programs end in 2007, Bulgaria will be securely grounded at all levels and its successful market economy will be better integrated in the international markets. USAID legacy programs are expected to continue the tradition of a strong and strategic alliance between the U.S. and Bulgaria.
Despite Bulgaria's impressive developments and the irreversibility of Bulgaria's transition, the majority of the population has yet to feel the change for the better. Bulgaria remains a lower middle income country with reforms that are far from complete. Like many countries in the region, Bulgaria suffers from high levels of organized crime and corruption. Reform of the judicial system is a pressing need. Lack of transparency and accountability; serious delays in the judicial system; legal professionals with inadequate legal expertise and experience; the politicization of the judiciary; human trafficking; and waste, fraud, and abuse in government procurement feed general distrust in public institutions, hamper business investment, and prevent Bulgaria from meeting international and EU standards in regards to the rule of law. Fiscal decentralization is far from complete and requires political will to speed it up. Notwithstanding the favorable legal environment and increased number of active non-governmental organizations (NGOs), the sustainability of the civil society sector remains fragile, with more than 80 % of its funding still coming from foreign sources. Media, while generally free, face pressure from the government and special interest groups. People from ethnic and cultural minorities, notably the Roma, continue to be marginalized.
Bulgaria has achieved sustained economic growth of over 4% annually during the past six years. In spite of the solid macroeconomic performance and sound fiscal discipline, the country has failed to regain its actual pre-transition gross domestic product levels and remains among the poorest of the EU applicants. Per capita income is still about 30% of the EU average and unemployment and low living standards persist. With a monthly minimum wage of $76, average monthly salary of $190, and an average pension of $80 monthly, the compensation received by Bulgarians, on average, is among the lowest levels in Southeast Europe. Living standards have not yet improved for all Bulgarians. Ethnic minorities, the long-term unemployed, and people with low education continue to face poverty. One of the key challenges, therefore, is to ensure that growth generates wealth for all groups in society. To realize Bulgaria's potential and meet the aspirations of all, the country will need to continue to tackle the remaining challenges in its transition agenda such as: creating an efficient and competitive business environment, finalizing second generation economic reforms, creating better and more transparent government systems, and improving the quality and access of social services for all citizens.
The outcome of the upcoming Parliamentary elections in the spring of 2005 poses a major challenge to the pace of the reforms in Bulgaria. The lack of strong support for any of the political parties that will run for the new Parliament imposes the need for establishing coalitions. This in turn raises concerns about the political stability of the new cabinet and its efficiency to drive the reforms. These issues will possibly be exacerbated by the lack of appropriate administrative capacity to absorb the upcoming EU structural funds, particularly at local and regional levels
(Excerpted from the 2006 Congressional Budget Justification for Bulgaria)
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