JOURNAL FOR SOCIAL IDEAS, POLITICS AND CULTURE

Vasil Prodanov The situation of Bulgarian society and trends for its development in the context of Globalisation and Еuropean Integration Prof. Vasil Prodanov is a Doctor of Philosophy. He works in the fields of Philosophy, Sociology, Ethics, Political Sciences. He is the author of over 200 scientific publications. He has specialised and lectured in UK and USA. He has written 14 books, among which 'Knowledge and Values' (1979), 'Personality and Politics' (1988), 'Global Problems and the Fate of Bulgaria' (1999), 'Violence in Modern Times' (2003), etc. He is the Director of the Institute of Philosophic Studies at the Bulgarian Academy of Sciences. 1. Bulgaria as an 'outstanding' or 'poor' student in its development Numerous models and proposals for the development of Bulgaria have been made over the past one hundred years aiming to pull it out from its backward position. Some of them treat her as an 'outstanding' development student as compared with the other countries following a similar road, while others see her as a 'poor' student and a 'slacker'. 1.1. An 'outstanding' student among East European and Central European States (1950-1990) According to the comparative PPP GDP analysis of individual country contributions to world economics since 1820, made by the most competent researcher in this field, Augus Madison from Groeningen University, the comparison with other former socialist states in the period 1950-1989 is as follows: In 1950 the GDP of Bulgaria was USD 1654 per capita, while in 1989 - USD 6329, i.e. it had increased by over 3.82 times; in Czechoslovakia the increase for the same period was only 2.49 times; in Hungary - 2.73; in Romania - 3,29. Among socialist states in Central and Eastern Europe Bulgaria turned out to be an 'outstanding' student showing most successful development. (1) 1.2. 'Poor Student' in the 1990s In the 1990s Bulgaria seriously fell back and states which had been more or less behind us, overtook us considerably. Let us take a generalised indicator such as the UN human development index, which includes three components: GDP per capita, level of education and level of healthcare. If we compare the first and last UN report on human development (1990 and 2003, resp.), providing data for 1987 and 2001 about the countries across the world, we will see that within 14 years Bulgaria had fallen from 27th to 57th position and in terms of disastrous deterioration it had exceeded all other countries in the world. Central European states, whose indices in 1987 had been close to Bulgaria's, but had a more rational, competent, responsible political elite, underwent less destructive transformation of their own countries, thus irreversibly outstripping us. Poland, which in 1987 was behind us, now takes 35th position and is 22 positions ahead of us; the Czech Republic, which was then only two positions ahead of us, now takes 32nd position and is 25 positions ahead of us with; Hungary, which in 1987 was three positions behind us, now takes 38th position and is 19 positions ahead of us. Greece, which in 1987 was only three positions ahead of us, has now moved 23 positions up and is already at 24th position, i.e. whoever ruled these countries in that period had been immeasurably more accountable towards their peoples. Singapore, which in 1987 was behind Bulgaria, now has moved to 28th position and is 29 positions ahead of us, South Korea, which was also behind, now is considerably ahead of us taking 30th position, i.e. 27 positions ahead of us. Our political elite had been more destructive and incompetent in comparison with that of Lukashenko of Belarus and Fidel Castro of Cuba, who had been accountable enough to their own people and had managed to preserve the potential of their states, and those who were lagging behind, are now outstripping us too. In 1987 Cuba was 12 positions behind and in 2001 it had gone to 52nd position, i.e. it is 5 positions ahead. Belarus, in the year of seceding from the USSR as an independent state (1991) was 68th, i.e. 35 positions behind Bulgaria, but ten years later due to Lukashenko's 'dictatorship' took 49th position, outstripping Bulgaria with its 'democratic' politicians by 8 positions (2). 2. Eight Positive and Eight Negative Trends in Bulgarian Society Today It is obvious that these processes should be reversed. In order to do this, which positive and which negative trends in Bulgarian society should we consider? Positive trends first: 1. Alleviation of the former political oppositions and thence emergence of pre-conditions for a rational dialogue on the real problems of the country, and not an irrational and paranoid drawing up of the image of the enemy, which explains one's own inadequacy, incompetence, lack of responsibility with the omnipresent cops, communists, KGB agents and what not, which some people like giving as an explanation for anything. 2. A trend towards stabilisation and economic growth between 4 - 5 % over the past seven years. The international currency reserve is increasing and in December 2003 - January 2004 it was equivalent to around BGN 10 billion. 3. Export has been growing fast, although import has been growing even faster. Export has increased from 5692,1 in 2002 to 7438,5 million in 2003, and import - from USD 7286,6 million to USD 9912,3 million. There is a considerable growth of export of investment commodities (machines and industrial equipment) - 13,6 Euro. 4. Obvious tendency towards credit expansion: in 2003 the credit portfolio of the banking system registered growth of about 49 %; consumer credits and individual and households credits increased by 75%, and their share within the credit portfolio increased from 20 % to 22.6%; there is a lasting increase in long-term crediting; Bulgarian banks started returning to the country a considerable part of the assets which had been deposited in foreign banks. 5. The general state debt and the state guaranteed debt, which in 1997 amounted to 105.1 % of GDP, decreased and at the second half of January 2004 it amounted to Euro 8554.8 million (44.1% of GDP projections for 2004). 6. If the survey data published recently by 'Ivan Hadjiiski' Institute and 'Mediana' Agency are true, in 2003 lasting poverty in the country had decreased twice as compared with 1999-2000. Individual consumption in 2003 had grown by 6,8% in comparison with the previous year, which is the largest growth since 2000 and is more than GDP growth. Total consumption, combining individual and collective consumption, reached 6.6 % of GDP. Increased investments and the impact of various programs of the Social Ministry have brought unemployment down - around 100 000 fewer unemployed in December 2003 than in December 2002. As the Government adopted the Strategy on Employment 2004 - 2010, it is expected the tendency to continue. 7. Fixed capital investment rate increased - in 2003 the increase was 13 % more than that of 2002. Foreign investments are increasing - according to preliminary data, in 2003 they already amounted to a record of USD 1.360 billion. Of that about USD 500 million is 'green' money, invested in new enterprises, hotels, business constructions and energy facilities. The total amount of direct foreign investments was about 7.2 % of the national GDP. Investments in long-term return projects are increasing, as well as investments in technological renovation in the business sector. Generally, there is a growing interest in investments into the Balkans and also forecasts claiming this tendency will grow, particularly after the accession of Central European countries to the EU. 8. Recently EMPs in Strasbourg adopted unanimously the Report on the progress of Bulgaria towards accession to the European Union. After becoming a full NATO member, the country's accession to EU is almost guaranteed to take place in 2007. For the period 2007 - 2009 the proposed by the European Commission financial framework for Bulgaria amounted to 4,245 billion Euro - about 7 % of GDP projections for that period, which is relatively more than that for any other preaccession country. Some critical negative tendencies? 1. Rising crime, insecurity, inadequate control mechanisms and inefficient judicial system, considerable corruption. According to the 2004 Transparency International study, out of 133 states in the world Bulgaria is at 54th position regarding corruption tendencies. The most uncorrupted states like Finland, Iceland, Denmark rank first, while behind us are Serbia - 106, Russia - 86, Poland - 64. 2. Individual income in Bulgaria is the lowest in Europe, while healthcare and education are deteriorating. Socialisation and moral mechanisms have collapsed, there is no legal culture, there is insufficient national unity and mobilisation for coming out of the existing situation, the scale of deviation among the already decreasing young generation is such that the very existence of the nation is threatened. 3. Alienation between the people and politicians is enormous, politicians and statesmen are distrusted immensely, and this prevents the political elite from taking any efficient action. 4. The ongoing catastrophic 'braindrain' process deprives the country of its best educated young enterprising people, the most intelligent and promising ones. This is also accompanied by the discouraging demographic tendencies. 5. Foreign investments are not evenly distributed - last year about 75% - about one billion US dollars - were concentrated in Sofia, while investments in small and medium enterprises, which have high technological value for production and represent the future of business in a given country, are insignificant. Foreign companies are attracted by the cheap labour and not by high labour productivity or high added value. Large companies do not show lasting investment interests, and compared to other states from our region, like Romania and Croatia, we are in a less favourable situation as being geographically more distant from Western Europe. Most of the country's export to the European Union are labour-consuming commodities such as clothes, knitwear and accessories (about 30% of export), most of them being produced on demand and of low added value. 6. Agriculture continues to be divided into almost 25 million pieces of Land, thus impeding cultivation with modern machinery and technologies. 7. Poor infrastructure poses significant problems as it puts off large export-orientated industrial companies. About 80-85% of the goods manufactured in Bulgaria are produced with low technologies, low degree of processing, by cheap unskilled labour, they are labour-consuming, material-consuming, capital-consuming. Medium-technology products are about 10-15%, while high technology ones are just 3 to 5%. (3) 8. There is a fast increase of inter-company indebtedness, as well as of the internal current account deficit of the country, which has never been so large before and is a threat to sustainable economic development. The national net export for 2000 was -5.4% of GDP, in 2001 it was -7,5%, in 2002 it was -6,6%, while in 2003 it reached -9.8%. When seeking answers to the question of how to overcome these negative trends, we have to bear in mind the conditions in which we could achieve this. 3. Globalisation, European Integration and External Dependencies as Obstacles to and Prerequisites of Development Every decision concerning the trends for future development of the country would have to comply with the major trends in the modern world, resulting from the processes of globalisation. 1. It exposes national economics to even more international competition, nearly all basic production factors are less and less territorially restricted, while the former regulatory state mechanisms work less and less efficiently. 2. Bigger wages decrease company competitiveness and businesses tend to export their production processes to countries with lower wages. This makes governments accept the demands of transnational companies and, as a first step, decrease taxes in order to attract or keep them on their territory. All this reduces the possibilities for building safety networks for the less advantaged groups of the population. 3. 'Full employment' is a thing of the past. Labour is getting more and more deregulated, and work force demands more and more flexibility and mobility. 4. Globalisation destroys existing organisation forms that had served as a prerequisite for assertion of values such as solidarity and collectivism, undermines the influence of trade unions and political parties, loosens the existing forms of social partnership. 5. Information, knowledge, 'human capital' are turning into a much moresignificant development resource. 6. The ageing of the population and the new technologies are both a prerequisite for the fast growth of healthcare costs necessary to maintain an adequate health status of the nation, which puts additional burden on budgets and generates problems. There is an attempt to differentiate between left and right, social and neo-liberal versions of state reaction to globalisation and European integration, but for countries like Bulgaria, terribly lacking resources, lagging behind and exceptionally dependent on international institutions and external factors in general, the possibilities for left-right manoeuvring are relatively restricted. Thus a realistic national policy will keep to the existing relatively small range of possible alternatives. In this context, a solid national consensus is also needed for the development of Bulgaria, an evolution approach combining the changes with a continuity of the governance and development of the country, a rational discussion at every step forward to be taken. This rational discussion should put forward strategies leading to most significant acceleration of development, without entailing serious social differentiations and, hence, oppositions and conflicts which could have destabilising consequences. 4. The example of Greece or the example of Ireland -the 'poor' or the 'outstanding' student of the European Union? There is no one universal model for successful development, but the experience of another country is very important for outlining our prospects. Bulgaria is in the process of acceding to the European Union, therefore it follows the general model and the enormous number of EU requirements, which set considerable restrictions on the attempts to create a national model of development. Within the general EU framework we can see models with different levels of success. Greece is one of the 'poor' students. Its GDP per capita before EU accession increased very fast until it reached 62% of EU average, but after accession in 1981 it started falling and in 1998 it was 59% of EU average. It has been least successful in taking advantage of its accession to the Union for developing a successful model of development. Among the 'outstanding' students is Ireland, the 'Celtic Tiger'. Upon its accession to the EU in 1973 its GDP was 61% of EU average, while in 1998 it became 110% (4). It is an example of successful development in the conditions of a 'late', 'reflexive', 'postindustrial' modernisation. What should we do to achieve similar success and become an 'outstanding', and not a 'poor' EU student? 4.1. How to combine globalisation with the state? The first question here is: how is the state to respond to globalisation, which has been said to erode its capacity for action? By lessening the 'state', according to neo-liberals, or by maintaining its active role and dimensions, according to traditional Keynesians and neo-Keynesians? The answer is neither 'less', nor 'more', but in the successful transformation of the state, so that it can address new challenges. Such transformation could be successful only if there is dramatic increase of transnational interaction and cooperation, if the state acts not as a single sovereign, but as a coordinator, protector, stimulator in the collective interrelations internally and externally. The adaptation to external challenges cannot be made independently, but by asserting and increasing various integration interlinks with governmental and non-governmental associations. Where it fails to do so successfully, it will speedily slip into oblivion. Thence the fierce competition for joining NATO and EU. A ranking according to the country's degree of globalisation, which Foreign Policy magazine has been making over the past several years, shows Ireland as the most globalised country in the world for 2001-2002. After Ireland, at the top of the 62 countries ranked for 2002, come Switzerland, Sweden, Singapore, the Netherlands, Denmark, Canada, Austria, UK, Finland, the USA, France, Norway. Four indices were used for this ranking. First, economic integration - international trade volume, investments and various payments made at the points of border crossing. Second, personal contacts - travels abroad and tourism, number of the international telephone calls, mail parcels and transfers. Third, technologies - number of Internet users, number of Internet-servers, etc. Fourth, involvement of the country in international politics - membership in international organisations, number of embassies, etc. (5) Unfortunately, Bulgaria has not been included in this survey, but the conclusion is self-evident - the density, the intensity of economic and political interactions of the country with the rest of the world are typical for the most advanced countries, and their stimulation and enhancement play a key role for any growth strategy. 4.2. Building an efficient political system, preventing social deviations and providing security. Without political stability, order and the rule of law no development is possible. We may go on claiming how democratic we are while investments keep going to China. Stability is not possible without trust in governmental institutions and political parties, without active civil participation, ethnic equality, efficient law enforcement, protection of the citizens' personal and property security. This means: 1. Efficient state administration, which is independent of political changes, stable political system. Further reform of governmental institutions based on the principles of openness, accessibility, transparency, prediction and efficiency, increased institutional capacity for governance in the public sector by, among other means, enhancing public-private interaction, ensuring sustainability of state governance, computerisation of central and local administration. 2. Overcoming the insufficiency of efficient consensual instruments for establishing institutions, which play an important nationwide role as being elected by Parliament with a qualified majority of two thirds. A stabilising effect on the development of the country could be expected from increasing the president's powers in the area of legislative initiative and postponing veto. 3. Efficient judicial bodies, restricting crime and political instability. Fast legal procedures in both the criminal and civil spheres. During the past years the tardiness or inefficiency of legal procedures related to company contracts and the declaration of bankruptcy caused a surge of personal infighting. It is evident that the judiciary cannot remain any longer in the same situation. The existing system for serious crime investigation is inefficient, while legal procedures are too complicated and often endless. The recently adopted new Judicial System Act, ensuing from previous constitutional amendments, removed the formerly absolute immunity of magistrates and made it functional, referring only to their official duties, it also introduced various punishments for their offences; judges, prosecutors and investigators are appointed only with a competition. It still remains to be seen how much this will increase the efficiency of the system. 4. The colossal alienation and distrust in political parties and the political elite is possible only by implementing major changes in the control over politicians, which would make them feel as a significant force. This means mechanisms for a much stronger civil control over politicians, manifested in several main directions: first, make active use of referenda; second, introduce primary elections for party representatives; third, amend the Constitution to include an imperative MP mandate - giving voters the right and possibility to recall their representative when they are not satisfied with him/her. The current free mandate of MPs contradicts the proportional party principle of selection and election to Parliament, which entails permanent cataclysms and tensions in the political system; fourth, introduce the majority principle of election with single-mandate constituencies. The proportional election system, which was adopted in the country in the 1990s, creates conditions for increased instability and is no less corrupted, as recently claimed by some politicians who are afraid of the majority system. It is a proven fact that majority election systems everywhere guarantee better stability and accountability. Fifth, set up Parliamentary 'ethics committees' of the US Congress type, which are among the most important barriers to corruption. 5. Overcoming the current situation where the established party system and party legislation enable the existence of parties as huge corruption mechanisms. A radical change in political party laws, such as to ensure absolute transparency and control over collected and used funds. 6. The current absolutely inefficient register of official's incomes should be made compulsory in the first place, and also provide severe sanctions for irregularities and an overall anti-corruption climate. 4.3. Use of geo-cultural factors in the strategy of development The mass movement of capitals from one region to another has always been favoured by similar cultural and language particularities, and not simply by economic rationality. The vigorous development of the USA and Australia in the second half of the 19th century would not have been possible without the enormous flow of British capitals to these countries in a world where Great Britain was the leading power, and its small territory and population could not utilise the enormous quantity of free capitals. Similarly, the economic reform in China would not have been so overwhelming without the fact that about 80% of foreign investments until the end of the 1990s came from the Chinese population in the neighbouring countries. Ireland has also taken advantage of these cultural factors, as most Irish people live in the USA and this ethnic, cultural and linguistic factor plays an important role in the process of capital flow. The cultural ties between Bulgaria and Russia are well known and one of the factors that contributed to the collapse of our country in the 1990s is that it did not take advantage of the enormous export of capital from there in that period, which flowed into Western Europe and the USA instead of coming to Bulgaria. Even according to official estimates that export was dozens of billions annually and if there had been created adequate political and economic conditions, that capital could have come to us. But this is also one of the possible directions of our relations. No less important is this opening for the movement of people and capitals to the neighbouring Slavonic countries - from former Yugoslavia, besides there are no language barriers here. 4.4. Strategies to increase social and human capital. The strategies to increase social capital (the level of social cohesion and confidence) and human capital (skills, knowledge, preparedness for the new technologies) are a key factor for each development. This has been the most neglected sphere over the past fifteen years. All preceding systems for socialisation and education were destroyed and children and young people were left to vie for themselves in a situation of acute anomy and social crisis. They were affected in the greatest degree, which led to the current terrible figures related to child and youth crime, drug and alcohol abuse. Here both Asian and US experience can be exceptionally useful - restoration of children and youth organisations. It matters not whether they are 'Brannik' or 'Legionary', 'Pioneer', 'Komsomol' or 'Boy Scouts', but without an active government policy for the establishment and use of such organisations, without very serious out-of-class activities in schools, we will become a society with worthless social capital and no development strategy will be possible. How is it possible for dozens US cities to have a curfew for their students and have people under 21 arrested for drinking a beer, and for us these problems not to exist? How is it possible for Japanese, South Korean and Singapore students to wear school uniforms and start the day with the national anthem, to obey powerful moral and socialisation mechanisms and for us these things not to exist? To that end are necessary radical strategies to build powerful systems for moral control and a specific conservative (neoconservative) revolution aiming to consolidate small units like the family, neighbourhood, civil organisations, children and youth educational organisations, children and youth centres. Strong national mobilisation and avoidance of extreme political oppositions, rejecting the policy of hatred and conflicts, the maintenance of strong identity, social partnership and social peace are a key resource related to the quality and cohesion of social communities. They generate social capital, embodied in social confidence, which is also a favourable precondition for development. Without including knowledge in our development strategy it is not possible for our society to part with its backwardness. This means establishment of a potential for absorbing and adapting knowledge through investing in human capital, research and development. Digital literacy and foreign language skills become as significant as traditional literacy. Pupils and students have to be taught not only facts, but how to handle data bases and use the obtained information in context. When considering human capital, over the past two decades special emphasis has been put on the primary and secondary education, thus for Bulgaria it is a fundamental task to ensure access of all Bulgarian children and young people to good education. The quality of secondary and higher education is deteriorating, and the newly established higher education accreditation commission measures formal factors but not outcomes at the exit of higher educational schools. A fast transfer of techniques and institutions is necessary for assessing the qualitative results of secondary and higher education schools in order to rank all schools and higher institutes. This should be accompanied by a sharp increase of the competitiveness of secondary and higher education. I do not understand the frantic fear of the lobbies of major higher schools in the National Assembly who for years have been hindering the authorisation of the most powerful scientific institution in our country - The Bulgarian Academy of Sciences - to teach Master of Science programmes. This could sharply increase competitiveness and also the quality of higher education, wouldn't it? At the same time secondary education should implement national matriculation and a voucher funding system, which would significantly enhance competitiveness among schools. There should be a transparent and competitive system of education with sharp increase of market competitiveness in education. In Ireland great attention is being paid to the concentration of effort into quality higher technical education - a sphere which for the past years has been neglected in our country, while there was a boom of enrolment into the humanities and social sciences like law, psychology, economics, political sciences. Changing teaching methods is also important - stimulating creativity, not reproduction. 4.5. Segmented markets and the use of difference. In the conditions of globalisation and a third industrial revolution a distinctly developing trend is the development of segmented and very innovative markets targeting specific groups, small groups of consumers, using specific, new and different products and services. Information technologies reduce diversification costs to nil. They allow the production of small series of goods intended for a certain market niche. For example, in 1972 Philips produced a hundred different models of colour TV sets, at the end of the 1980s they were 500, while at the end of the 1990s - over one thousand. Whoever offers something different, new and specific, wins. Difference sells and this provides a new chance for catching-up development. In such situation the chance of countries like Bulgaria is to put their stakes with the value of their difference. Every success strategy presupposes taking inventory of those profitable market differences which the country has and from which it can gain in a postindustrial economy. Of key importance is not the repetition of what the others are doing, but finding those profitable differences in the form of ecological and customised products, history, geography, regional specifics as key economic advantages (6). This means that the most profitable strategies of economic development are not simply in imitation, but in innovation. 4.6. Tax policy in globalisation conditions In the conditions of globalisation there is a tendency for global tax evasion and movement of funds from one country to another. This happens through several major mechanisms: a) company registration in off-shore centres and use of tax privileges; b) transferring company profit abroad and tax evasion through transferring manufactured goods prices to other countries; c) export of funds through payment for fictitious import, i.e. of an import which is not delivered. In this situation the question is: how is the state going to react in order to successfully implement its functions? If taxes are too high or high social security contributions are required from employers, transnational companies may quickly move their production to another country, and thus countries start competing to reduce taxes in order to attract or keep foreign companies. In the conditions of globalisation a country can react adequately only with a new type of tax policy and a new concept of tax fairness, which is not limited to tax redistribution through progressive-income tax, but seeks new forms through which to accumulate funds in the state budget. To some extent these policies also affect the process of harmonisation of our legislation with that of the EU. Government activities get redirected radically into several basic directions, which should be considered by us too: Closing tax backdoors for tax evasion and creation of most efficient tax collection system; tax police and drastic increase of the efficiency of the court in dealing with cases initiated by the tax authorities, which is very low now; surveys show that one of the main reasons for not paying taxes and social security contributions is the low risk of punishment, the little probability for detection and sanctioning; Continue the process, started by the present government, of replacement of direct with indirect taxes and keeping relatively low tax rates; Increase taxes on luxury goods, cigarettes, alcohol; Increase real estate taxes, which is the least mobile form of capital; Decrease corporate taxes (in the Balkan region they move between 15% in Macedonia and 20-25% in the other countries to 30% in Bosnia and Herzegovina; before elections NDSV had promised 0% corporate taxes if profit is reinvested, but did not keep their promises) at the expense of consumer taxes; Decrease the steep line of progressive-income taxation while studying additionally the pros and cons of 'flat' taxation, particularly in the context of its introduction in the neighbouring countries, who compete with us for investments; Protect the state from value added tax draining: it is well known that in Bulgaria cheater-companies are champions in stealing VAT from the state (if in 2002 VAT losses in EU countries equalled about 1% of the total 8 000 billion GDP, in Bulgaria they amount to about 4% or BGN 1.3 billion annually; Tax stimulation of high tech companies through tax vacations; lower tax rates, tax credits. Tax stimuli in the form of accelerated depreciation. In the neighbouring Balkan countries can be seen various practices in that respect; temporary tax exemption (Bosnia and Herzegovina, Croatia, Macedonia, Serbia), partial exemption from profit tax (Bosnia and Herzegovina, Macedonia); preferential corporate rates (Romania, Croatia), accelerated depreciation (Bulgaria, Croatia, Macedonia, Romania, Serbia); tax alleviation for investments (Bosnia and Herzegovina, Macedonia); tax alleviation for reinvestments (Romania); duty exemption (it is not valid only for Bulgaria and Albania); VAT exemption (Romania), differentiated VAT rates (Albania); special VAT-free zones (Bulgaria, Romania), profit tax exemption (Herzegovina, Croatia, Macedonia, Romania) and other tax alleviations (Bosnia and Herzegovina, Macedonia, Romania). 4.7. Developing a national potential for utilising EU funds. Upon acceding to EU, for a rather lengthy period Bulgaria will be a net receiver of subsidies from the European agricultural and structural funds, i.e. it will be able to use various funds for redistribution. For a whole set of other funds there will be no privileges, but we would have to apply and compete for them, as it is for instance for the funds under the framework agreements through which EU science is financed. Activity in using EU subsidies provides opportunities for which it is necessary to make projects. This, however, requires special training of skills for the drafting, implementation and evaluation of good projects. Henceforth the funds, attracted and utilised by the country, depend to a very large extent on the degree to which every ministry, together with different governmental and civil organisations, will manage its organisation, establish institutions, provide mechanisms and staff who can attract and utilise maximum funding. This presupposes vast educational and training activity by individual social groups, which should be implemented with the help of the state. Every Bulgarian university should have a programme to teach young people techniques and organisation for participation in projects and programs for attracting funds. The training courses for businessmen, civil organisation members, scientific unit managers and generally all units which could be involved in EU funding, should turn into one of the key tasks of every government. 4.8. Innovation policy and the priority of third and fourth industrial revolution technologies. A key element of an efficient development policy is designing strategy to increase the technological and innovation potential of the country, including research and development costs, staffing, degree of intellectual property protection, openness to international trade and scientific and research activity funding. The existing at the moment social mechanisms for creation, adaptation, utilisation and introduction of new or improved knowledge, products, processes and services are not efficient enough, the scientific and technical potential that has survived the last 15 years is not linked with efficient systems of public assignments, it is not enough integrated in European structures. The government innovation policy should develop a set of incentives for innovative research activity (subsidies, tax alleviations, etc.) in the research institutes and universities, for improving the efficiency of own investments, intellectual property protection, stimulating the establishment of high tech enterprises, dissemination of technical and other novelties (7). One of the goals of the European Union is to build a so called knowledge-based society and this, apparently, should be our strategy too. With the current amounts and mechanisms of funding science, however, this is not possible. If it is not understood that the more active research is, the more a society can absorb international and intellectual experience, benefit from foreign research and increase labour productivity, increase value added products and thus achieve rapid development, the country has no perspectives. In 2002 the government of Simeon Saxe-Cobourg-Gotha adopted an industrial program for national development. It outlined as priority spheres telecommunications, energy, tourism, agriculture and pharmacy. Unfortunately, a considerable number of activities in the government program, related to the adoption of a High Tech Parks Act and a set of laws defining a complex of alleviations and commitments of the government to the sector; the adoption of a program for introduction of e-education in high schools - free access to Internet, special classes dedicated to the new economy and the technologies on which it is based; establishment of an investment fund with state participation and attracting international financial investors, which is to become the core of technological parks; improvement of e-trade regulatory framework, all these have not been implemented in substance, although the deadline was 2003. The practical implementation of a program for movement towards the technologies of the third industrial revolution and the prospects of the fourth industrial revolution can be reviewed as a development catalyst. The third industrial revolution is related to communication technologies and new materials, new energy sources, ecological technologies, and the fourth industrial revolution, which is in its initial stage, will rely on genetics, nanotechnologies and robotics. It is obvious that these have to be made first priorities in education and science, where basic funds should be injected. Communication technologies have complex consequences: first, they provide access to information, for creation, preservation and use of large information sets of all kinds, and second, they become a factor for accelerating and enhancing relationships among people. This will increase sharply the human, social and information capital, and through it the economic possibilities of a certain country (8). 4.9. From social to a neosocial state. In the conditions of globalisation even the most advanced countries cannot preserve the old type of social states as the strong social networks make the production of the companies more costly and drive them out to other countries. That is why different directions are sought for the transformation of the preceding social state type: 1. Social policy is not possible without macroeconomic stability, because inflation does no longer help the poor as in the Keynesian state, but punishes the poor incommensurately more than the rich. The need for social programs should comply with the need for decreasing taxes on capital, which is now much more mobile. 2. Social assistance from the state should not encourage life inertness, but stimulate activity, productivity, savings, flexibility and readiness to change the nature of labour throughout one's entire life. The major direction of social policy should be to provide disadvantaged individuals and groups with possibilities, conditions, chances to change their situation (9). 3. Lifelong learning and 'social investment' in the conditions of post industrial technologies are the most suitable policy to prevent large groups of people getting trapped in marginality, poverty and permanent unemployment. Health, education and child-raising are the most important elements of future investment. 4. Decrease company social security expenditures for the workers by funding these contributions or from the state budget (the Danish model) or by increasing workers contributions (the Swiss model). When social security is financed by the government budget, the funds are provided, mostly by means of increasing household and consumption taxes, and not by higher enterprise taxes. 5. Forfeit the principle of state social assistance for all unemployed citizens and limiting assistance to the most needy. This state social assistance should not make its recipients lazy, disinclined to rely on themselves, seeking lasting dependence. It should be something temporary, for a period of retraining for finding a new job in conditions where unemployment is mostly of a structural nature. 6. The ageing demographic structure of EU countries, in Bulgaria also, presupposes reduction of the pensions paid by the state and a much more active development of private pension funds, the increase of pension age and the provision of various incentives for working over the pension age, increased social contributions, larger employer responsibility and individual pension-savings plans. Combating age segregation and adjusting learning and training systems for training, qualification and retraining of all age groups. Family taxation is also a stimulus for a cohabitation and support of the different generations within the family. 7. Proposing several employment promotion mechanisms. Among them are labour market deregulation; enhancing employment by the state opening new jobs in various social spheres; decrease working hours and distribution of available jobs among all unemployed citizens; increase the number of partially occupied and stimulate non-standard employment with incomplete and flexible working hours, working at home, working in several jobs, temporary jobs, working in several jobs through Internet; a system for fast retraining and entrepreneurship promotion. 4.10. The globalisation of nations and the use of the resources of all Bulgarians in the world. Globalisation greatly increases the movement of people, and Bulgaria is an example of the drain of enormous human potential. It is well known that in the course of two thousand years the Jewish nation is the only global nation - it is all over the world, managing to maintain strong national identity. In the conditions of globalisation nations 'turn Jewish' or become globalised, i.e. the importance of territorial characteristics for a nation's definition is weakening. Territorial nations are gradually replaced by global nations. Less developed nations keep splitting into two - a territorially differentiated and a globally dispersed nation. Nations today increasingly resemble huge octopi spread all over the globe, and the territorial nations who first realise this and manage to take advantage of it hold serious advantages before the rest. The extent to which they use their global, dispersed part in economically, intellectually, politically and culturally, is the extent to which they sharply increase their economic development capacity. The multifaceted use of this potential for the purposes of Bulgaria's development should be subjugated to a long-term strategy of maintaining contacts with and involvement of the social, financial, human, information potential of Bulgarians all over the world. Such strategy needs a special policy addressing the millions of Bulgarians abroad, starting with dramatically facilitating the opportunities for those who are not Bulgarian citizen to become such, until the development of a strategy for making use of the potential of the new emigrants to Western Europe and North America, who due to modern communications and mostly to Internet and the fast and ever cheaper transport, remain culturally and psychologically linked to the country. The use of these resources has already started. First. Use of the education and the experience of these people. Albeit inadequately, the intellectual potential and international experience of a small part of these Bulgarians have been used since the late 1990s in the initiative 'The Bulgarian Easter'. Out of these one group of world famous university graduates with international economy experience were involved after 2001 in the governance of the country. Every party should use the knowledge and education level of modern, high quality Bulgarians, graduates of famous universities, and their experience in global institutions - global companies, global financial institutions, international organisations. Second. Use their financial resources. According to official BNB data, only in 2003 Bulgarians living abroad had transferred to Bulgaria an amount of USD 675,7 million, amounting approximately to about one billion BGN at the current dollar exchange rate, this being close, for instance, to the total budget amount paid this year for salaries and scholarships, which was about USD 1.4 billion. However, BNB reports only money incoming through banks, but if the money coming through other, non-bank ways, is taken into account, the actual amount of money transferred into the country must have been between USD 1 and 1,5 billion. This is certainly not a small amount of money, which could increase additionally and become a significant factor for the accelerated development of Bulgarian economy. Experience in attracting funds from compatriots abroad needs further studying. Very typical, for instance, is the experience of Portugal in using money made by Portuguese abroad. Ever since the 1970s the managers of the Portuguese banking system have been trying to actively use, direct and increase the inflow of funds from Portuguese living abroad into Portugal. Step by step they have organised Portuguese emigrants in France, after depositing their savings in French banks to have them transferred to Portuguese institutions. 4.11. Re-emigration, immigration and attraction of human capital. A key problem of the countries who have been catching up in development during the past decades is the escaping human capital, the brain drain, the concentration of highly qualified workers to the USA and Western Europe. The globally increasing competition, however, creates preconditions for changing this tendency, and it is up to the active policy of states to determine to what degree they will be using this fact for new impulses of a catching-up type of development. Today's key production factors - labour, capital, technologies and ideas - move fast everywhere on the globe. Bulgaria's accession to the EU, which will make her an outer EU border in the conditions of globalisation and the movement of large groups of people, preconditions not only the emigration flows from Bulgaria to other regions, but also of immigration, i.e. attraction of demographic masses from other places. According to the estimates of the head of the Demography Department of the National Statistical Institute, by 2010 -2012 the number of people coming to settle in the country from abroad may even exceed the number of emigrating Bulgarians. In this respect Bulgaria has certain advantages which make it attractive for social groups from various countries. Namely, these are two basic groups, attracting which will apparently be an important factor for increasing the inflow of funds to Bulgaria. The first group is that of people from advanced Western and top EU countries, who would prefer to settle here because of the beautiful nature and lower living costs. Elderly Japanese and English people have already started buying houses in the country, which - considering the desertion of Bulgarian villages and the low price of real property there - may obviously favour the restoration of the villages and life there by people who have earned their money elsewhere, but spend it here, in our country. The number of senior citizens in the EU is growing fast, while pension schemes are characterised by increasingly critical processes, and the people who would like to spend their pensions at places where they could live much more cheaply will go up in the following decade. The second group is that of the qualified professional from other countries for whom, apparently, 'green card' programs will have to be established soon. In this respect, the strategy should, apparently, address primarily Bulgarian emigrants coming back to spend their pensions here, in their own country, after completing their careers in the West. The main focus then should be foreigners who are culturally, ethnically and religiously close to us and would not form enclaves which could have a disintegrating impact, but would maintain and consolidate a strong community with a high degree of confidence and mobilisation capacity. Here, a significant role will have to play the Bulgarians from the former Soviet republics, from Macedonia and Serbia, the Slavic and Christian population, as this would maintain a relatively non-conflict and clear ethnical structure of the population. Thanks to Internet, there is an increasing trend for working at home, irrespective of distance, and even in Bulgaria, according to a number of estimates, up to 20 thousand people use the global network to work for foreign companies as programmers, designers, animators, etc. This tendency will obviously grow. One New York insurance company has planned in the period 2004 - 2006 to change its team of 800 American software engineers, everyone of them making USD 150 000 annually, with just as competent team in India, where they make only USD 20 000 annually. By 2008 the number of radiologists in the USA is expected to decrease sharply because the necessary data can be sent abroad by Internet and processed by radiologists far less costly (10). Since 2001 there is a tendency of highly qualified software and information specialists to return and stay, and it is particularly strong not only in countries like India, but is becoming significant also in Eastern Europe. In 1999 Ireland attracted over one thousand immigrants per week, half of them returning. At the moment Indians have also started returning home and engaging in the upsurge of software industry in their country. In Scotland, Minister Jack McKonell headed the Young Talents working group, whose tasks includes, among others, a strategy to attract back talented professionals who have left the country. A mechanism has been set up for consultations to that effect, as well as an Internet site encouraging foreign employers to hire staff in Scotland (11). In this respect, Lydia Shuleva's proposal - that the government ensure additional payment of 500 Euro to returning to Bulgaria highly qualified specialists in important spheres of governmental policy - is well grounded. If a country has a robust educational system and is able to produce educated, qualified and motivated professionals, then the global companies from advanced countries will be much more interested in using these people locally at a much less cost attracting them to the USA or Western Europe, where they would cost much more. Everyone working in an advanced country for a big salary whose activity does not require everyday immediate interaction, in the coming years will have to face the risk of their job being moved to another country like Bulgaria, which offers professionals with the same qualification but performs the activity locally, at a lower cost, which provides a competitive advantage for the respective company. In conclusion: Globalisation is a process which can lead to a serious development lag, but can also be used for accelerating development. European integration creates conditions, but it is up to us whether we use them and become 'outstanding' or 'poor' EU students. Disasters as well as successes in our society have so far been the result of our own actions and the actions of the political elites we have produced. Nothing is predetermined, it is up to us to determine what the next decade will be like, the years after too. Notes: 1.Cf. Maddison, A. Monitoring the World Economy, 1820-1992, Development Centre of the Organisation fro Economic Cooperation and Development, Paris,1994, Table 4 (c); Рангелова Р. Брутният вътрешен продукт на България по паритет на покупателна сила в международните сравнения, сп. Икономически изследвания, 1998, Год. VII, № 2, с. 20. 2. Вж. Human Development report 1990. New York-Oxford: Oxford University Press, 1990,p.111; Human Development report 2003, New York-Oxford: Oxford University Press, 2003,pp.237-238. 3.Вж. Ангелов, И. Стратегия за догонващо икономическо развитие до 2002 година, сп. Понеделник, 2004, №1-2, с. 45-46. 4.Вж. Икономиката на България и Европейския съюз. Стратегия за догонващо икономическо развитие до 2020 година, С., Икономически институт на БАН, 2003,с. 44-49. 5.Вж. Kearney, A.T. Measuring Globalisation: Who's up and who's down? Foreign Policy, January/February 2003. 6.Вж. Бек.Щ. Що е глобализация?, С., Критика и хуманизъм, 2002, с. 220-225. 7. Вж. Икономиката на България и Европейския съюз. Стратегия за догонващо икономическо развитие до 2020 година, С., Икономически институт на БАН, 2003, с. 249-276. 8. Hammond. A. Digitally Empowered Development, Foreign Affairs, March/April, Vol. 80, N 2, 2001. 9. Вж. Sen, Amartaya. The Political Economy of Targeting, In: Public Spending and Poor: Theory and Evidence, Eds. D. Van de Walle and Kimberley Hedd, Baltimore: The John Hopkins University Press, 1995. 10.Schumer, Ch. And P.C. Roberts. Exporting jobs not free trade, International Herald Tribune, January 7, 2004. 11.Вж. Carvajal, Doreen. The Workplace: Reversing the expat brain drain, International Herald Tribune, March 9, 2004
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