Gypsy Contribution to Prosperity in Bulgaria’s Late Communist Era

Introduction

The key difficulty today in the EU and in Bulgaria's thinking about Gypsies is that almost nobody things of them as normal individuals.

They are perceived by different government and Brussels programs as, on one hand, “betrayed and oppressed” (in the human rights rhetoric), “isolated”, “ostracized“, “segregated”, “discriminated” or as, on the other hand – by left and “right” alike, “rough”, “stealing”, “under-culture”, “non-civilized” and even “not-subject-to-civilization”, to refer just to a few of the Bulgaria public opinions, somewhat subtitled clichés.

Respectively, the required policy “towards them” should be one of “inclusion”, “integration”, “rehabilitation”, “support”, “education” and “protection”. This is the vision of the said programs, including private and quasi-government, UN and EU charities. The common denominator of all these definitions is taking Gypsies, or Roma as a class, as category of the population but not as individuals.

Alternatively and again reading Roma as a class, although not quite politically correct, a part, a minority part – to say the truth, of the public opinion in Bulgaria [1] , Czech Republic, Slovakia and Serbia or Kosovo believes that Roma are the societal “bad guys”, those who steal, who are per se criminal, relief seekers, welfare users and basically under-class and under-dogs.  But this thinking too takes Gypsies as a group, ethnic entity or a class; and the feature prescribed to the groups would be immediately applicable to individual Roma, whatever he or she does.

I can deliberate only on the Role of the Gypsies in Bulgaria.  In the three parts of this paper I will make an attempt to discuss how representatives of the Roma contributed to the prosperity under Communism, how they helped create Capitalism (a role that stems from Communist times) and what was and still is the role of Roma in shaping Bulgaria's democracy, culture and policies. I start here with the late Bulgaria Communist years, reviewing some exclusive benefits no one in the country could supply but Roma entrepreneurs.

Second hand clothing and cooperative agriculture

Before 1980, the city Roma craftsmanship were rather typical: blacksmiths, chimney-cleaners and specialists in repairing lead and non-ferrous metals articles. Old Gypsy men, however, had an unique profession – they were purchasers of second hand clothing, wandering around towns' better off neighborhoods on weekend mornings, shouting “Old Cloths ‘Buying”.

In those years the second hand clothing exchange was functioning only among relatives; in Bulgaria, almost like everywhere, they used to exchange baby and kids' dress. Those were times of widespread shortages. Re-making adult clothing was still somewhat popular, but that was the market for professional tailors while many people, not female but male, including myself, were capable of performing simple tailoring and had respective sewing machines at home.

The very old clothing, however, that was in demand among Gypsies only; no one would give cash for that in the 70's and the 80's of the last century.

In the 1990's, selling second hand clothing had become a formalized and even international business.

As far as I could recall, [2] in the agriculture nomad Gypsies were welcome seasonal workforce. The eagerness of cooperative farms to hire them was motivated by the chronic shortage of farm workers, especially because pupils and students were creating more mess that value added in the fields and gardens. There was no discrimination: the day pay was equal to the normal one, the difference between urban “brigadiers” and the Roma was that the latter could work and actually worked hard, to support the family.

Early birds of market economy

Management of independent supply channels of forged or smuggled goods in time of shortages, however, was the true employment for the city Gypsies in the late of the 1970's Bulgaria and the capital city of Sofia in particular.

It was preceded by the liberalization of movement of people in ex-Yugoslavia (after 1965) and the spontaneous open-air market f or consumer goods and fashion articles at Sofia St. Alexander Nevski Cathedral Square, the very heart of the downtown area. Yugoslavs were trading those articles, music plates and magazines, erotic journals and anything one would imagine or desire. That market expanded during the World Communist Youth Festival of 1968, which took place two – three weeks before Warsaw Pact troops invaded Czechoslovakia. Suddenly, it practically declined and moved to another location in 1972 when Belgrade and Nis (a town in Eastern Serbia) bus stop was moved to the outskirts of the city.

On the Alexander Nevski Square “black market”- as it was called then although it was virtually the only normal market place in town, the Roma did not compete with Bulgarian spontaneous merchants who wanted to buy and resell to the local thirsty public; they wanted to sell to ex-Yugoslavs things that were much cheaper (subsidized) in Bulgaria – milk and milk products, cheese, etc.  The Roma were saving the ex-Yugoslavs the costs of walking around empty shops, of queuing and other unpleasant experiences.

Gypsy foreign exchange

How only very few would remember that in the Communist countries there were special shops where foreigners, tourist, diplomats and privileged domiciles alike could spend their hard currency. In Bulgaria they were called “Korecom” – from “currency commerce”, thus indicating that local “money” was anything else but currency.

The supply channels of valuable goods managed by Roma entrepreneurs merged in relation to “Korecoms” and paralleled them. They flourished and prospered especially after the “Korecom's” liberalization of 1977 that consisted in the fact that the government suddenly stopped asking questions about where the public has the hard currency from. Of course, nothing was certain but, obviously, the Communist planners needed dollars, D-marks and every other useful cash for the big ideas they had and it was easier to collect from the public than borrow through official channels.

The circumstances were the following:

• The fear of visiting those shops [3] did not disappear; many people, however, were trying their best to overcome it;

• The demand for hard currency had risen; the official exchange rate to the US dollar was about 1:1 but on the free market it was 3-4 to 1, often higher for Soviet Union (the shortages there were much more severe and unbearable) and/or for smaller quantities;

• An organized but informal market for goods demanded against hard currency emerged.

The Sofia Gypsy community services in this situation were very much the ones at a state of the art:

• Forex trading;

• Import of most demanded goods – jeans, cloths, cosmetics, modest and easy to carry devises lime radio, tape recorders, gramophones, sewing machines, skis and ski boots, etc.;

• Diversifying the intermediation depending the conjecture and the good at demand;

• Visiting the shop for instead of the frustrated buyer.

The money markets were located in front of the “Korecom” shops to serve desperate shopping public or smartly downtown, in front of the Central Department Store – next to the Council of Ministers building and across the square from the president's office. It was rather clever to meet disappointed customers of the Central Department Store when they walk out empty-handed and offer them some alternative to buy what they wished.

The currency trader would usually ask what the good the unfortunate needs to buy is. If it was clothing, jeans or any other of the above said goods, the Roma entrepreneur would usually offer a better price than the official currency shop if it was to be bought at another location”. If it was skis or something that would be relatively difficult and risky to store, the service would be to buy that rather expensive piece at the hard currency shop instead of the customer but in his/here presence to help with his or her fear of being asked about the origination of the hard currency.

 The ”other place” used usually to be the Gypsy neighborhood at the outskirts of the city, the taxi (another good subject to severe shortage then) was readily available, often at the expense of the seller. The goods were usually stored in a relatively well-to-do house. The quality was expected to be the same as in “Korecom” and one could try the cloths that were properly packed and labeled. The taxi would save time to go there and back, if the purchase was significant and the company pleasant the merchant would pay the taxi. The transaction should be executed in hard currency, which usually was to be exchanged at the separate vendors.

I am not aware of a single case of fraud. In comparison to the trade in the “Korecoms” and especially to the exchanging money on the street with Bulgarians, the risk was zero. The militia in front of the Central Department Store would witness what was going on but would not interfere. The Roma vendor would, as a rule, know the cap.

Servicing the customer

In all three cases there is one very significant role of the Roma entrepreneur: he (women were not involved) was helping to overcome severe shortage of the Bulgaria's Communist economy.

In the shortage economies witness a very widespread phenomenon, the consumer surplus was driving the prices like in normal economies but with some excesses.

Thanks to the controls and oppressed competition, the consumers valued some goods far beyond their price under other, normal conditions. That price paid would appear high relative to the opportunity costs or compared the wages and income.

Some examples: in 1977-1979 a pair of jeans in “Korecom” could typically cost from 21 to 27 US dollars and the price was equal to 1/5 – 1/4 of the average salary. But outside “Korecom” the jeans price would be most likely 35 – 40 US dollars. With the Gypsy jeans vendor the pair price was equal to the one in the shop or often a little bit less. The same was the case with other desired goods.

In other countries, the constellation was similar but there were no Gypsies involved in the trade. In some countries it was even more desperate but provided for normally unthinkable arbitrage.

In Leningrad, today's St. Petersburg, the price of a pair of jeans in 1977 – 1979 was 125 US dollars – almost two times the average salary. In the Soviet city of Tolliatti one could sell a pair for US 250 dollars. It was four times the average salary but two times the average wage in that city since it was producing Lada – for those who do not know, it was the Soviet car being sold throughout the countries of the Eastern Block. But the circumstances could endlessly differ in details. For some reason, in 1975, Leningrad authorities banned Finnish tourists of using their own currency in bars and the Soviet analogue of “Korecoms”, limiting also the amount they could exchange officially. Poor Fins could exchange their money at 0.25 of the rate they would otherwise get on the unsuppressed market. Then, in Finnish currency, perfectly usable on the hard currency market in Bulgaria and elsewhere, the pair of jeans could cost in fact about US 7-94 dollars and be sold in Leningrad or Tolliatti.

In 1960's and 1970's people were not looking just for bread and butter but for something more, beyond the established and planned basic needs.

How did the Gypsy entrepreneurs used to fall in the picture? They served the consumer. Many Bulgarian students in Soviet universities, actually thousands of them, lived better than many ordinary Soviets and Bulgarian for years.

Contribution to prosperity

The Gypsy entrepreneurs have been helping ordinary Bulgarian citizens for years doing what the system was not providing or was even fighting against.

In the described three cases we have obviously dealt with:

1. Exploring and developing a market for goods and services for which even an attempt by the majority representative would have been punishable or morally condemned but which allowed Gypsies help others in receiving what they wanted;

2. This activity had nothing to do with the social welfare system of that era and the Gypsies involved were helping themselves much better compared to what they could have gotten under the welfare;

3. Not only the flexibility of income but also the mobility of labor was secured under Communism with the Gypsy assistance.  It was especially visible in the agriculture;

4. Being an intermediary or an entrepreneur was a crime during the Communism, Gypsies obviously managed to counteract the ban and serve the consumer surplus of many individuals, whose rights as customers were systematically oppressed by the government.

Needless to say, in all three cases these activities were performed not only by Gypsies. The important point, however, is that they were doing this on a more massive scale and as a profession. There would be no exaggeration to state that in the Communist Bulgaria of 1970-1980's it was the single largest segment of the population that was living in and intermediating niches of the free market under oppression of the central planning.