Economic Policy Review ISSN 1313 - 0544

Jobs, Freedom of Choice and Democracy

Author: Petar Ganev / 11.04.2013
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The recent social unrest in Bulgaria was accompanied by numerous commentaries. There are certain inaccurate arguments that can be heard in Bulgaria, as well as abroad, which can severely alter the nature of the public debate and conceal the very substance of the protests. Such are, for instance, the comments that Bulgaria is another victim of austerity measures throughout Europe and that the people are populists since they want a new constitution which is supposed somehow to pay their bills and give them a better standard of living. These two statements are completely false.

The reasons for the protests are not in the austerity measures. There were no such – at least not such as the ones we heard from Europe. Public expenditures were in fact growing in all the crisis years, reaching record levels in 2013 – for the first time in its history the state will redistribute more them 30 billion levs. Austerity came in the shape of frozen pensions (but the minimum one actually increased), social payments and public salaries (the latter is disputable, since the expenditures for wages in public administration never stopped growing). In this very year, however, there will be an increase in these payments – pensions, for instance, will be increased in April and there are more planned expenditures for public administration and social payments. So, even if there is certain disapproval of the government’s budget policy – some groups (pensioners, mothers etc.) will approve of constant increases of all social payments for sure – but this is not the fundamental reason for the protests. That’s why such claims were not heard very often – people were not on the streets for more public spending here and there.

The reason behind the protests is not budget policy but poverty and high bills. Employment has fallen drastically in the country in the past four years, which immediately affected poverty. This is the most obvious cause and effect relationship in the country – when there are no jobs, poverty is growing. It is no accident that in the past two years we have been discussing job creation as a key challenge, an issue which is constantly neglected. There was not even a sight of any structural policy in education or in labour market that will promote job creation. Higher electricity bills appeared in the context of lack of jobs, meaning unemployment, and increasing poverty. This was the main reason for the protests – there are no jobs, and all of a sudden the monopolies show up with higher electricity bills. This has nothing to do with fiscal policy and austerity, but with bad structural policies in the labour market (making it even more costly to create jobs) and in the field of energy (monopolies and artificial pricing)

The other question is why the people want a new constitution, while the problem seems to have an economic nature. Truth is that, driven by the lack of jobs and high energy bills the people also wanted for something else – namely for true democracy. This should be no surprise; we have been here before and more than once. Did the Arab Spring not follow the same scenario? On December 17th 2010 Mohamed Bouazizi set himself on fire in Tunisia, after the government took his job by confiscating his cart and his goods because he had no permit to sell on the streets. On the very next day the Arab Spring started, as a result of a lack of jobs and opportunities, leading to demands for true democracy. What we see in Bulgaria is quite similar.

Many analysts lightly disregarded the demands of the people as chaotic and often insane. How is it even possible to expect coherent and meaningful demands from such a big mass of people? The parliament is comprised of 240 people, who most of the times have completely different opinions and ideas, a good number of which cannot be called rational. How is it possible to gather a group, been it 240 people in parliament or 10 thousand on the street and to expect not to hear an enormous amount of absurd statements? Moreover, this is to be expected when the streets are crowded with all types of radicals, demand the “death of capitalism” etc. This is an expected development – the real question here is whether to expect a victory of rationality or a victory of populism.

In my opinion, the majority of the demands have a certain common points – less poverty (that is, more jobs), breaking of monopolies (that is, freedom of choice) and working democracy (that is, rule of law and civil society). The latter is the biggest challenge, but debate on the constitution can still be fruitful, despite the fact that most of the solutions to the current economic situation require no changes in the constitution. I have no memory for a moment when in Bulgaria there was a larger discussion on the constitution than the one on budget privileges, i.e. expenditures. When somebody writes his version of a new constitution and posts it on facebook, this can be found funny by some, but to me this seems closer to the core concept of democracy – citizens discussing the constitution and their rights and not demanding privileges though the budget. We are all aware that there is a problem with democracy (more like with rule of law and justice), so there is no reason to be afraid of the fact that the people have shown their discontent. It is a rational unrest; now the policies to follow should also be rational and not populist.