February 11, 2003

Mr. Plamen Dimitrov, Vice-Chairman, Confederation of the Independent Trade Unions in Bulgaria

Ladies and gentlemen! Some of you may be wondering why the trade unions are participating in this discussion. Let me start by saying that the two representative trade unions in Bulgaria have been part of Coalition 2000 and have participated in the Steering Committee ever since the Coalition was created. It's another matter how useful we have been and what potential we have as trade unions. Let me share a few remarks in this respect.

The slight improvement of the corruption situation noted in the 2002 Report of Coalition 2000 should not reassure us because opportunities for corruption still exist in a number of areas of special interest to the trade unions and to our members.

Reading the analysis we can't help noticing the extreme tenacity of corruption in this country. Regardless of any drop in the percentages and the rate of decline registered, this does appear to be a valid conclusion in our opinion. Corruption manages to transform itself and adjust to any conditions and thus undermines and discredits genuine and worthy initiatives and measures and all kinds of undertakings intended to fight it.

Let me cite a few examples from the report. Such widely used instruments throughout Europe, such as the protective import duties or subsidies for agricultural producers, in this country tend to increase the rate of corruption and actually encourage it. In this respect it is admittedly arguable to what extent these are market tools but the fact is that they are used in Europe and the world. In Bulgaria, however, as noted in the report, they prove to stimulate corruption.

The report quite clearly shows both perspectives on the problem, as already noted by the previous speakers. What transpires from the intervention of the judiciary in the privatization of Bulgartabak and BTC is political dependence and corruption. And conversely, the amendments to the Law on Privatization and Post-privatization Control, including those limiting the powers of the judiciary, are also suggestive of possible private sources of corruption. Paradoxes, which - viewed from two different angles - ultimately do not reduce corruption.

The healthcare reform has not been mentioned so far, yet it is highlighted in the report and we find it particularly alarming. The manner in which this reform has been implemented clearly creates the opportunity for another 250 million to leave the hands of ordinary Bulgarians and enter the healthcare system by unregulated channels, or in other words, through corrupt practices - something that cannot, and should not, go on.

When Ludwig Ehrhardt set at the basis of the German market economy the well-known triangle: competition-currency system-social order, he also established a fundamental, though not the most important, rule: special efforts to ensure high social and material status to non-market labor - public administration, tax officials, police, court officials, etc. In fact, those who actually maintain the effective operation of the system. And while we can't say our civil servants are at the very social bottom, neither is the work of some of them, and possibly all of them, duly valued. We do, however, agree with the conclusion in the report, that they are ranked first by public opinion in terms of corruption. And that is why there are many who say, not quite without reason, that we neither have a market economy, nor a social state, as stipulated in the Constitution. And it will be this way as long as non-market labor continues to find its way into the market, creating forms of distorted market relations and corrupt practices. Corruption is like a cancer holding our society in its clutches and this not only undermines the moral and democratic values of which we all speak and which we have been fostering in the past 12-13 years, but also impedes economic development.

I would like to mention two more things that I deem important. In this context the trade unions and the employers actually play a very serious role. The trade unions are involved in structures such as Coalition 2000 not only in Bulgaria. The International Confederation of Free Trade Unions and the world labor movement are in fact part of the anti-corruption network of OЕCD, with active positions in many different democracies in the region. We deeply believe that the fight against corruption calls for concerted efforts and cannot be confined to activities of the government, of the legislative and judiciary branches of power. Clearly, the non-governmental organizations, and not just those we already mentioned today, in the area of law and law enforcement, but also those representing labor and social rights, those safeguarding the everyday life of citizens and which give them, or fail to give them, the opportunity to get involved in the fight against corruption, need to be a part of this movement, of this process.

We fully adhere to the conclusion made in the report about the failure to make effective use of the potential of public-private partnership owing to the reluctance or inability of state institutions to open up to civil society and seek broader support for their policies.

Next, and extremely important in our opinion, is the involvement of the civic sector and the trade unions, including the employers, in civic control and monitoring of the EU pre-accession funds - something that hasn't been mentioned here today, and which is not commented in the report either. We, the employers and the trade unions, have expressed our readiness to start negotiations with the Cabinet and are expecting the reply of Mr. Saxe-Coburg-Gotha to see whether this year he will find the right formula for our participation in civic control and monitoring. Not only we, but perhaps the local authorities and other organizations and institutions need to be included, too - this would help make sure that the funding from the European Union would not be diverted or used to other ends. I leave aside the matter of the rate of appropriation.
Another factor that we deem critical and which has been noted in the report is the share of the hidden economy, which is generating corrupt practices. It is true that two extremely important initiatives have started this year with the support of the trade unions. We firmly support the registration of the employment contracts with the National Insurance Institute and the introduction of a minimum social security contribution for the different categories of occupations and positions held. This year the employers and the unions will have to negotiate the amount of these minimum contributions and the minimum working salaries and wages. This is necessary in order to avoid another upsurge of the gray sector as feared, according to the report, by the colleagues from Coalition 2000. In other words, through genuine negotiations, which hopefully will take place in the course of the current year, we'll make a contribution towards minimizing corrupt practices.

The symbiosis between corruption and trafficking is something that hasn't been commented but in the past years the trade unions have constantly been present at the customs offices and the checkpoints, voicing their concern and urging the government to deal with the illegal imports and trafficking that are crushing Bulgarian producers. We all know where the problems are - consumer goods and foodstuffs, but not only. Corrupt practices do not seem to have become part of everyone's agenda because apparently the automated system still isn't functioning in customs. The twelve subsystems that were supposed to be introduced from the beginning of the current year are once again put on hold. Let's hope it will happen by the end of the year. And please feel free to correct me if I'm wrong.

In conclusion I would just like to say that the existence of union organizations in the enterprises (both private and public) - something that everyone can view from a different angle - certainly contributes towards limiting corruption and towards greater transparency in the activity of non-governmental organizations. The Confederation of Independent Syndicates in Bulgaria declares its readiness to partner both with Coalition 2000, of which it is part, and with public administration in the current and the coming years. I hope we will be ever more active and effective in our efforts to fight corruption, which is a bane not only for Bulgaria.