Reflections on the government sector

The very first insurance contract in Bulgaria against media risk was signed earlier this month. It is one-year-term bill and the policyholder is insured against several types of risk as follows: against calumny or insult, misleading, breaking secrecy and violating intellectual property rights, including copyrights, trade marks and rights on patents.

The arise of a new insurance product on the market is definitely a positive development, which proves an increasing confidence in the market as a natural regulator of relations among individuals and companies. On the other hand, the policy is a peculiar guarantee for freedom of speech, censorship and independent journalism. This product can be found in each developed democracy nowadays.

Amazing is the fact that the first policy of that kind in Bulgaria was bought not just by a media, but by the Bulgarian Telegraph Agency (BTA), which is a state owned company and its activities are still being regulated by a Statute, adopted by the National Assembly more than ten years ago(1) . This document could be generally divided into two parts indicating what BTA is not allowed – to become a source of calumny and misinformation, to inflame political, ethnical and religious conflicts – and what it is obliged to do – upon request to disseminate official news, to seek after objective and complete information etc. Besides this, the Statute and the director general of the company are always dependent on the parliamentary majority and its structure and activities are monitored and subject to approval by the respective parliamentary commission.

One needs to know that even if no official document explicitly states what is allowed and what is not, each media, including BTA, strictly holds up to the above mentioned limits under competition pressure and cautiousness not to be sued. On the other hand, there is no way to be right that a company, which is apparently market oriented, relies not upon market decisions, but political.

The following case is emerging: a state owned company seeks to apply market decisions when it deems it is necessary; besides purposive budget subsidies it generates own income through advertisements and selling information products; it successfully initiates innovation in other branches of the economy. On the other hand it is still state property, its activities are bound to a special statute and the direction of its development could change by every single waver of the political configuration in the parliament.

The presence of a judiciary and a functioning market on one site, and a company, which aims to be part of it on the other, are sound arguments for letting BTA be private. Its activities should also not be extra regulated, which will provide the company with the equal opportunity of all other market agents for natural development. If there was ever a need of adoption of a special statute for BTA due to political and economic instability, it has turned into an unnecessary burden today.

Administrative regulation of pure economic activities through legal acts is an old-fashioned and inefficient approach, which is widely used in non-democratic and non-market oriented countries. For a democratic market economy it is rather a disease.

The best solution for BTA: The media could easily turn into a private company selling shares to its employees and to outer investors as well. Potential results:

• Advancement opportunities equal to these, which have all other media companies;
• Higher motivation for the employees;
• Increased sector competition;
• Privatization revenues for the state budget;
• Tax and social security revenues

The state owned companies in Bulgaria, which are to be privatized, are still great in number. We suggest a list containing just those companies, whose names begin with the letter “B”. We also believe that this list is not completely through:

• Bulgarian State Railways (BSR)
• Bulgartabac
• Bulgarian Sea Fleet (BSF)
• Bulgarian River Shipping (BRS)
• Bulgaria air
• Bulgargaz
• Bulgarian Posts
• Bulgarian National Television (BNT)
• Bulgarian National Radio (BNR)
• Bulgarian Academy of Sciences (BAS)

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(1) Promulgation in State Gazette, issue 56 , 1994