To Our Rulers: Continue With the Reforms, Stop Spending the Surplus and May Be You Could Get Reelected

Two things could be observed during the last year in office of every Bulgarian Government – it starts hard spending (if there are money) and stops the reforms (if it has been making any), in order to focus on the coming elections. The current Government would probably follow this model and for that reason we would like to give some advice.

Stop spending before the elections

The existence of terribly large surplus is beginning to "irritate" the Government and the ruling coalition and some ideas and proposals appear for its spending. If we take a look what the last two Governments did we will see that:

• – During the pre-election year 2005, they spent money for the so called demonstration projects, water fountains etc.; there were additional transfers to the municipalities, the distribution at school of free cookies and fresh milk up to the fourth grade began, etc.
• – The pre-election 2001 was characterized with additional money to the municipalities, to the Bulgarian State Railroad company under the threat of a strike, etc.

However, both Governments did not get reelected. But on the account of that new programs were initiated, a new additional administration was created, which require more money from the budget, part of which were disappearing in someone's pocket.

Still, there is a surplus and for that reason it is the best to use it to continue with the pension reform and to start the healthcare reform. 

Continue with the reforms

In his book "The Guide to reform" Johnny Munkhammar writes that there are several valid for each country principles to make reforms:

1. The economic growth of a country depends mainly on the policies which are implemented – not the geography, size and culture or something else.  Large and small countries reform if they want to.
2. There are many examples, studies and good experiences for successful reforms. In most cases they do not have even to be adopted for the local specifics, but a strong will and decisiveness by the Government is required.
3. The positive economic and social results from the reforms most often are striking and exceed all expectations in time. Employment and incomes grow, the quality of education and healthcare improves, unemployment, poverty and social isolation diminishes.
4. The changes most often meet stiff resistance from various groups of society – small groups with special interests such as government employees, trade unions and political opponents of the ruling party. Every government would like to have as wide public support for its reforms as possible, but by the time it gets it comes the time for the next election. For that reason if it is necessary one must act decisively, to explain, to look for the good examples around the world, but not to wait.
5. The governments, regardless whether they are left or right, can implement successful reforms. Being aware of the need for change and what must be done is pragmatic and does not belong to a specific political party. 
6. Major reform conducted by the Government, usually leads to other and thus contributes to the reforms cycle, which leads to high economic growth and effects on the society as a whole, not only for a specific group. The liberalization of trade leads to less regulation of the product markets and they on their part lead to freeing the labor market.
7. The reforms have always opponents and enemies. Their views and opinion change with time and there is always a way for the Government to handle them.
8. It is easiest to make radical reforms when the country is in a crisis, but that is not a necessary and only condition. Many good changes take place during the time of economic growth, such as reduction of taxes and improved conditions of labor.

For these reasons it is absolutely mandatory to continue with the healthcare system reform in the direction of giving the people a choice between the health funds, the pension reform – reduction of payments and that they in their entirety will be paid to a private fund, eliminating the unnecessary regulation, reducing the administration. All of these are in the current plan of the government and it must act now.

And may be you would be reelected

The above observations clearly indicate that the Bulgarian government must continue during its last year in office with the implementation of significant reforms. Contrary to the claims that the difficult changes in the economy mean a loss at the next elections there are a number of examples of reformer governments with more than one term in office. In countries like Ireland, Slovakia, Estonia, Denmark, great Briton, New Zealand, the USA, Latvia and the Nederland the ruling parties were reelected for the firm reform policy.    

The current government, if it would like to be reelected and for that reason deferred the reforms, must ask itself the questions: 

What will happen at 2009 elections if they do nothing during the last year of their term in office?

Is this going to guarantee reelection?!