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What
remained unfinished from the 3-year agreement with IMF?
In June
the Ministry of Finance announced that the Bulgarian government
has received the last trench according to the 3-year agreement
with IMF from 1998. The completion of the agreement is considered
as a success, and as indicator of proper choices of economic
policy. Indeed, the sequence of measures that was negotiated
with IMF increased economic freedom in general, and the
positive changes in the business environment during the
last 3 years can be attributed to both the Bulgarian government
and IMF. We would like however to mention the most significant
measures agreed upon but not taken by the government:
1/ Computerization
of General Directorate "Tax Administration" and General
Directorate "Customs". The deadline was 31.12.1999; the
measure is not implemented so far.
2/ Privatization
of Biochim Bank. The deadline was end of 2000; so far the
bank is state-owned.
3/ The
loans from State Agriculture Fund should be backed by mortgage
of land. The deadline is by the end of the agreement; no
significant progress is still made.
4/ Drafting
a new energy law consulted with the World Bank. The law
that was adopted by the parliament does not provide for
liberalization of the market and was disapproved by both
IMF and World Bank. Relevant amendments were drafted in
March 2001 but were not approved by the former parliament.
5/ Privatization
in the power generation in practice did not happen. The
agreement provided that small hydro- and thermal power plants
were sold in 1998 and 1999, at least one big thermal plant
in the first quarter of 2000, and by the end of the agreement
most generation and distribution facilities be privatized.
6/
Liberalization in the natural gas retail distribution was
not carried out. The common feature of unfulfilled promises
is that they all require a will to cut down state intervention
in economic life, i.e. to eliminate the tools of political
control over significant cash flows (tariff duties, banking
sector, energy supply).
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