One of the presently most widely discussed problems
- privatization - is increasingly emerging out of the sphere of
projections and becoming a reality. As indicated by the data from
the latest survey conducted by the Center for the Study of
Democracy on the problems of privatization, its preparation is at
an advanced stage: 13% of the state-owned enterprises are currently
being valuated, analysis of the legal state of the property is
under way at 22.5% of these enterprises, and 10.2% have been
included in privatization programs.
Similarly to restitution, the returning of the land,
the setting up of a new banking system, etc., privatization is an
unprecedented phenomenon in the economic and political life of
post-socialist Bulgaria. The expectations for a rapid sweeping
denationalization proved illusory, just as it proved impossible to
achieve the rapid returning of the land, the rapid creation of new
market structures, the rapid democratization, etc.
The Center for the Study of Democracy began
conducting its surveys on the economic reforms and privatization in
1991, when opinions were largely dominated by attitudes "for" or
"against" any changes of society and the economy at all, and the
share of those having no opinion on the fundamental questions of
the economy was extremely high.
The present paper is an attempt to summarize the
basic results of the surveys conducted up to now and, above all,
those of the Privatization and Economic Reforms Survey - April-May
1993, sponsored by the Privatization Agency. It should be noted
that the information from the surveys is not always clear and
straightforward and certain dissimilarities, and even occasional
contradictions, may therefore appear in the interpretation of the
data. This is due to differences in the views of the individual
authors, which were deliberately not suppressed in the editing
process.
The present report is based on four representative
of Bulgaria surveys focusing exclusively on the privatization
process. The specific characteristics of each of the surveys are
the following:
A. Privatization and Development of Small
Business in Bulgaria. The survey was conducted in March 1992.
It is representative of the population in the whole country. The
sample includes 167 persons aged over 18. The model used for the
survey is two-stage cluster sampling with preliminary
stratification of the clusters. The voting lists of the last
parliamentary elections (October 1991) served as the basis of the
sample. The electoral sections constitute the clusters which have
been stratified into six groups according to the technical
principle "number of voters per electoral section", i.e. according
to the size of the clusters. At the first stage the clusters from
each group have been selected randomly. Their number is
proportional to the relative share of the number of units from each
group with respect to the whole number of units in the totality
(all voters). The total number of clusters in the survey is 300. In
the second phase, 7 persons have been randomly selected from each
of the clusters included in the sample, or in other words, the
planned size of the sample is 2100.
B. The Business Elite and the Prospects of
Privatization. The survey was conducted in November 1992. The
total size of the sample was 1304, out of whom 638 were managers of
state-owned enterprises, and 666 were managers of private
companies. Quota sampling was used, with the following indicators
being controlled in the process of sample formation: type of
ownership; location - region, district, town, village; economic
branch.
C. The Economic Reforms and Privatization.
The survey follows up on the one conducted in 1992 and is also
representative of the population of the country (aged over 18). The
planned size of the sample was 2100 and the actual size was 1827
persons. The same sample model was used - two-stage cluster
sampling with preliminary stratification of the clusters. The
survey was sponsored by CIPE and the Privatization Agency.
D. The Business Elite on Economic Reforms and
Privatization. The survey is quota-based, with the same
indicators under control as in the one conducted in 1992. The size
of the sample was 1242, of whom 505 were state-owned company
managers, and 736 - private businessmen. The survey was sponsored
by ICEG, CIPE, and Standart newspaper.
The principle objective of all these surveys was to examine the
subjective attitude of the public and the representatives of the
business elite to the economic reforms under way in the country.
Special attention was devoted to certain specific problems of
privatization. The following consequential points should be born in
mind in the interpretation of the obtained results:
- In the first place, the communicated estimates
represent subjective views. They have been shaped, apart from
all other influences, under the combined impact of several crucial
factors: the objective situation, the individual ideologies, the
models for interpretation of the economic process advocated by the
political forces and other agents on the social arena, and the
specific interests of the individual respondent. In this sense, the
presented data do not actually show the process of economic reforms
in the country, but rather, what people think about it.
- Secondly, the respondents themselves (within
the frames of the population surveys) assess their own competence
in economic matters as quite inadequate. One immediate
implication of this is that ideological constructs and personal
subjectivism probably predominate within the system of evaluation.
This, however, should by no means lead to the underestimation of
these evaluations. In fact, it is the subjective interpretation of
a given situation that determines the behavior of each
individual.
- Thirdly, it should be born in mind that a
person is able to make meaningful judgements on things which are an
immediate part of his or her empirical experience. In this respect
the present objective economic situation is quite
contradictory and naturally generates inherently contradictory
evaluations.
Taking into account the above aspects of the
evaluation of the economic processes, the surveys incorporated
certain indicators covering several problematic spheres:
1) Those of the characteristics of the personality
and the way of thinking of respondents which have a direct bearing
on the views they express;
2) The respondents' general evaluation of the nature and direction
of the economic changes;
3) Evaluations of certain essential elements of the economic
reforms and the way of carrying out the privatization.
The survey of March 1992 was one of the first to
focus on the problems of privatization in the country. It was
conducted at a time when the Privatization Law was still under
discussion at the National Assembly. As a consequence, the obtained
evaluations were related to hypothetical situations of which a
large part of the respondents had neither "theoretical" nor
practical experience. The second population survey was conducted in
May 1993, in a changed, but by no means radically different
situation (at least with respect to privatization processes).
Part of the questions were identically formulated in
both surveys, allowing for certain comparisons. In this respect the
general conclusion is that little seems to have changed in popular
attitudes. Both in May 1992, and in May 1993, about 60% of the
respondents defined the pace of the economic changes in the country
as too slow. In 1993, however, certain noteworthy changes can be
observed in evaluations of whether "the ongoing changes are moving
in the right direction". The relative share of those who estimate
the changes as "right" fell from 15.1% (1992) to 6.1% (1993); the
relative shares of negative evaluations increased by 2-3 points,
and the relative share of people having no firm opinion declined
from 18.1% to 13.1%. On the whole, unfavorable evaluations of the
course and the direction of economic reforms have become more
pronounced. The decrease in the share of people approving the
direction of the reforms is largely accounted for by the supporters
of the Union of Democratic Forces (UDF), who disapprove of the
present government and its policy.
The search for indicators which significantly
differentiate people's evaluations led to identifying two basic
types of variables: stratifying (differentiating), and variables of
"homogeneity". The former reflect the principle differentiating
points in economic thinking and attitudes of the public. The second
group are based on commonly held views on aspects of economic life,
views on which there is general consensus.
The more significant stratifying (differentiating)
variables are:
• the grouping of respondents according to their
evaluation of the changes in their individual economic status, i.e.
the groups of the economic pessimists, optimists, and the
economically neutral;
• political preferences;
• education;
• social and class self-identification (according to
the categories "upper", "middle", and "working"
class).
In a sense the division
"optimists/pessimists" integrates within itself the
operation of these stratifying variables. The category of the
"optimists" is marked by predominance of younger people (aged under
50), the higher educated and more familiar with the economic
processes (according to self-assessment), people whose
occupations/professions are closely related to the market. The
"pessimists" typically have lower education, higher average age;
the people from this group to a much higher degree pertain to the
economically inactive, etc.
The comparison between the two surveys reveals that
the above-mentioned stratifying variables on the whole operate in a
similar way. Thus for instance, the distribution of the answers to
the question "What effects do you expect privatization to have
on your personal situation?" in 1992 and in 1993 is the
following:
March 1992 Table 1
|
Optimists
|
Neutral
|
Pessimists
|
Positive
|
43.8
|
19.7
|
6.5
|
No effect
|
36.2
|
49.0
|
43.2
|
Negative
|
5.0
|
14.7
|
26.3
|
Cannot decide
|
15.0
|
16.6
|
24.0
|
|
100.0
|
100.0
|
100.0
|
May 1993 Table 2
|
Optimists
|
Neutral
|
Pessimists
|
Positive
|
35.5
|
11.1
|
6.5
|
No effect
|
43.9
|
56.2
|
39.9
|
Negative
|
9.4
|
20.8
|
25.4
|
No answer/Refusal
|
*
|
*
|
*
|
|
98.2
|
98.7
|
96.7
|
The optimists with respect to economic reforms are
also optimists as regards privatization. In other words,
respondents tend to view privatization within the general context
of economic reforms. Bulgarians still know little about
privatization, which probably accounts for their optimism in most
cases. Although the group of the optimists, who estimate that
privatization will affect them personally in a favorable way has
decreased with about 7% in the one-year period between the surveys,
59.3% of the managers of state-owned enterprises believe
privatization will have a positive effect on the enterprises, 18% -
that it will have no effect, and 2% - that it will have adverse
effects.
Political preferences are one of the powerfully
stratifying factors. As a rule the supporters of the Bulgarian
Socialist Party (BSP) have a more pronounced negative attitude to
the pace and direction of the reforms. They are likewise more
reserved in their attitude to private property and more favorably
inclined to state intervention in the economy. It should be noted,
however, as indicated by a comparison between the data of 1992 and
1993, that the influence of this factor is steadily declining.
While in March 1992 the relative share of the people estimating
that the direction of the changes is "quite right" among the
supporters of the BSP was 4.1%, and among the supporters of the UDF
- 29.2%, in May 1993 these shares are respectively 5.6% (BSP) and
10.4% (UDF).
The slightly higher level of approval among
supporters of BSP and the fact that it has decreased nearly three
times among supporters of the UDF is due above all to the changes
which have occurred on the political scene. The dissatisfaction of
the UDF electorate with the constitution of the government is
probably of decisive importance for the deterioration of all
evaluations regarding the economic reform in the current year as
compared to last one. The second reason is public disappointment
and withdrawal from politics. And thirdly - the stronger immediate
impact of purely economic factors (rather than their political
interpretation) on individual economic behavior.
The surveys indicate that the share of those who do
not know or have no opinion on the questions related to the
economic reform is still substantial, varying between 30 and 43% of
all respondents. Their share is considerably smaller among the
business elite and the higher educated. The latter groups
characteristically express much more decided opinions. Thus for
instance, in their evaluation of whether "the ongoing changes are
moving in the right direction", 3.8% of the respondents with higher
education choose the "cannot decide" option. The respective
relative share in the group of "elementary [eight grade]
or lower education" is 25.5%. The higher education level
obviously contributes to a better understanding of economic
processes as well as to the acceptance of "objective
prerequisites" related to the building up of the structures of
market economy.
The surveys registered the following contradictions
in the views on economic reforms:
- Firstly - the so-called "double standards".
They represent a non-contradictory (to the respondents) combination
of values of the "old" and the "new" economic model. A situation is
emerging where the behavior strategies conditioned by the "old"
values are becoming irrelevant, while new behavior strategies have
still not been worked out. This "conflict" finds expression in the
double standards employed in evaluations and behavior. The conflict
varies in form within the different social groups but basically
produces the same results.
The data indicate that for the supporters of the UDF there is a
clash between general ideas for economic reform and the adverse
changes in the individual economic situation. As for the BSP
supporters, there is a conflict between general ideological
orientation and the obvious need for radical changes in the
structure of the economy. The dominating attitude of most people
presupposes massive state intervention in economic life (salary and
price control, subsidies to loss-making enterprises, state
commissions, etc.), along with free development of entrepreneurship
and private property. The survey of May 1993 revealed quite
extensive expectations from the budget: it is the predominant
opinion that practically all spheres ought to have more
funding.
- Secondly - the legitimacy of the economic
environment. The prevalent opinion of the public both in 1992
and 1993 is that there exist a number of quite salient phenomena,
which have adverse effects on the economy (corruption, money
laundering, covert privatization, etc.). Moreover, it should be
noted that according to public opinion a number of groups which, as
a rule, are negatively defined ("mafia", "speculators",
etc.*), occupy prominent positions in the hierarchy of economic
power and influence. In this sense, in the eyes of the public
private property and the related economic differentiation do not
acquire positive legitimacy, but rather retain their old negative
definition. Thus, the public trust that private property should
enjoy has been undermined in the very process of its
formation.
- Thirdly - egalitarian attitudes. The data
from the conducted opinion polls (as well as from some other
specialized surveys) indicate that Bulgarians are particularly
sensitive to the problems of inequality in terms of property and
income. This is partly accounted for by the fact that wealth is
perceived as illegitimate. Another part of the explanation is in
the way of dealing with the problems of the just redistribution of
public assets. The fact is, however, that the public largely
believes that a great many of the expected parameters of the future
economic environment are quite sufficient grounds for delaying or
interrupting the process of privatization.
The persisting etatist economic orientation also
encompasses the problems of privatization. Even as many as half of
the interviewed private businessmen believe that with proper
management a state enterprise can be as effective as a private one.
Moreover, according to 49.8% of all interviewed businessmen the
state should control prices, and 81.2% believe it is the state's
responsibility to create new jobs. Answers to the question
"Would it be necessary to delay or interrupt privatization under
the following circumstances" are quite revealing. The
affirmative answers are distributed as follows: 50.9% - in case of
impossibility to control foreign investments; 56% - impossibility
to control the export of capital from the country; 53.6% -
impossibility to control the origin of the funds; 57.2% - high
incidence of corruption. Such attitudes among executives in the
context of the country's poor economic situation indicate dominant
dependence on greater state participation in the economy and weak
popularity of neoliberal economic conceptions.
* Whether such groups actually exist and to what
extent they have been correctly defined is not essential in this
case. What matters is that ordinary people do believe they exist,
and forge their own, personal criteria according to which the
various people they meet are being referred to the above
groups.
* "Old", insofar as they used to be unwanted "by
definition" by the formerly dominating ideology. In the new
situation wealth is associated with illegality.
Ever since the very outset of the reforms
privatization has been viewed as an indispensable element of the
economic reform and the fundament of market economy. This view is
supported by the business elite. Both in November 1992, and in June
1993, private businessmen and the managers of state-owned
enterprises rank privatization as the second most important
priority of the Bulgarian economy, the top priority being the
revival of production. 91% of the surveyed representatives of the
business elite believe the state should speed up privatization.
Merely 5% hold the opposite view. In this respect the business
elite differs from the general public where the prevalent opinion
is that "privatization should not be rushed".
Public opinion is characterized by a specific model
of "'double' thinking". The data of 1992 and 1993 indicate that on
the whole this model, integrating the structures of market economy
and those structures of socialist economy which are perceived as
positive, predominates in the thinking of most Bulgarians. In this
sense, the majority would accept privatization and economic
reforms, provided:
• that nobody gets too rich, i.e., if this is not
related to drastic economic differentiation;
• that privatization is not accompanied by mounting
inflation and unemployment;
• that the groups which are perceived negatively by
public opinion (mafia, nomenklatura, speculators, etc.) do not
benefit from privatization;
• that privatization does not lead to the
intensification of certain negative phenomena, such as export of
capital, corruption, control over the Bulgarian economy on the part
of foreign capital, and others.
It should be mentioned that Bulgarians do not expect
much from privatization, and the expected positive effects are
primarily in the sphere of general parameters, such as "the
economy as a whole", "labor discipline", and "attracting
foreign investments". This, however, does not affect the
immediate interests of the population, but rather, the general
conditions of hired labor. In this sense, popular reservations
about privatization can be detected in the considerable relative
shares of negative evaluations on issues such as "employment",
"the prices of consumer goods", "personal income", "job
opportunities".
The "reserved attitude" to privatization is
exemplified by the fact that 11% of respondents believe it is not
necessary at all, and another 46.6% state that privatization is
necessary, but should not be rushed.
In principle the public evaluates positively the
motivating potential of private property, i.e. its economic
viability, its ability to mobilize resources swiftly, to deliver
quality output, etc. On the whole, however (most probably as a
consequence of the ideological indoctrination in the course of the
past decades), the attitude to private property is reserved. It is
generally estimated that a private owner is likely to resolve
conflicts between private (personal) and common (national) interest
to his benefit but to the detriment of the public. A considerable
number of respondents therefore limit the private sector within
certain branches only, while the priority branches of the economy
should, according to the majority of respondents, remain within the
public sector: power engineering, heavy industry, health service,
defense industry, and others. In other words, the population does
not favor total privatization.
1) In the empirical experience of a considerable
part of the population the concept of privatization remains rather
vague. Most people do not have an adequate idea of the economic
prerequisites of privatization and the market economy in
general.
2) Popularly held views are loaded with numerous
logical contradictions. Against the background of the general
dissatisfaction with the changes there also exist strong
apprehensions of the actual occurrence of the changes themselves
(e.g. the logical consequences of the changes on a specific
level).
3) A considerable part of the expressed opinions are
still directly related to specific ideological postulates, and to a
much lesser extent, to an understanding of the actual structures of
the economy. In practice, whenever the economic situation implies
unfavorable changes at an individual level, people are more
inclined to seek the reasons on an ideological level (blame,
responsibility, lawbreaking), rather than in the objective logic of
economic processes. This accounts for the susceptibility of a large
part of the population to various manipulations and harbors a great
many potential sources of tension and disappointments. There is
reason to expect that with the evolution of the economic situation,
e.g. with the accumulation of empirical experience and knowledge of
the market economy mechanisms, these views will undergo serious
changes. Comparative data from 1992 and 1993 indicate, however,
that such changes are occurring at a very slow rate.
The representative sociological surveys conducted by
the Center for the Study of Democracy among the population and the
business elite outline a rather negative attitude to the principal
institutions designated to carry out the privatization in the
country. Moreover, unlike other questions related to privatization,
where there appear substantial differences between the business
elite and the population as a whole, the opinions about the
institutions are unanimously negative. The data from the general
survey among the adult population outline the overall evaluation of
their activity. The negative evaluations of the work of the three
major institutions - the Privatization Agency, the Council of
Ministers, and the National Assembly - prevail constituting
respectively, 38.1%, 41.8%, and 54.6% (Table 7 ).
Public opinion on how various state and
governmental institutions are coping with their
* privatization obligations (%) – 1993*
|
Very well
|
Satisfactorily
|
Poorly
|
Do not know
|
No answer
|
National Assembly
|
3.1
|
21.0
|
54.6
|
18.4
|
3.0
|
Council of Ministers
|
4.1
|
28.7
|
41.8
|
22.3
|
3.2
|
Privatization Agency
|
3.8
|
21.4
|
38.1
|
32.8
|
3.8
|
Ministry of Finance
|
3.8
|
25.3
|
36.8
|
30.5
|
3.5
|
Ministry of Industry
|
2.1
|
19.7
|
41.7
|
33.0
|
3.6
|
Ministry of Trade
|
5.9
|
25.4
|
32.7
|
32.4
|
3.5
|
Ministry of Agriculture
|
3.2
|
19.7
|
44.0
|
29.3
|
3.8
|
The other ministries
|
1.2
|
15.8
|
38.6
|
40.4
|
4.1
|
Municipal Councils
|
2.6
|
19.9
|
42.4
|
31.4
|
3.6
|
* Opinions of people aged over 18
As is evident from the table, public opinion is most
critical of the National Assembly, which in practice has the most
limited responsibilities in the immediate realization of the
privatization process itself. In this respect evaluations are to a
great extent dominated by general dissatisfaction with the work of
parliament, rather than the activities related to privatization.
This fact suggests that the population is unfamiliar with the
specific functions of the various institutions involved in
privatization. On the other hand, the negative evaluation of the
National Assembly suggests that certain stereotyped opinions are
already taking shape, which tend to be rather rigid and difficult
to change, moreover, in a positive direction.
Most categorical in their negativism regarding
institutions are private businessmen, specialists with higher
education, and highly qualified workers, e.g. the people with high
qualification, who are generally better acquainted with the
legislation and the nature of the ongoing processes.
The survey among the business elite confirms these
data to an even greater degree. 59% of private and state company
managers believe that the Privatization Agency is coping
unsatisfactorily with its obligations, 58.6% support this view
regarding the work of the Council of Ministers, and 71.1% - for the
activity of the National Assembly. Private businessmen tend to be
more radical in their evaluations, with their negative evaluations
of the Privatization Agency, the Council of Ministers, and the
National Assembly being respectively, 61.4%, 63.6%, and 75.1%.
Similar evaluations are made on what has so far been
accomplished by the various ministries. Disapproval ranges from
54.2% for the trade ministry to 61.5% for the Ministry of Industry,
which is assessed as the most ineffective one (Table 2). In
the context of overall dissatisfaction with the work of the
ministries, the data point out the Ministry of Trade as the least
criticized. A positive evaluation of its work is made by
approximately twice as many businessmen than for any other
ministry. The active efforts of this Ministry to further
privatization, regardless of the unsuccessful outcome of some of
the organized auctions, indicates that society is most tolerant to
those institutions which visibly spare no efforts in their attempts
to forward privatization. On the contrary, delays and hesitancy,
regardless of the reasons, are subject to criticism. The fairly
differentiated opinions of the business elite (particularly from
the private sector) suggest that the activation of the process of
privatization is of great importance to businessmen.
The business elite's evaluation of how various
state and governmental institutions are coping with their
privatization obligations (%) - 1993
|
Very well
|
Satisfactorily
|
Poorly
|
Do not know
|
No answer
|
National Assembly
|
1.5
|
23.4
|
71.1
|
2.6
|
1.2
|
Council of Ministers
|
1.6
|
35.7
|
58.6
|
2.6
|
1.4
|
Privatization Agency
|
2.4
|
30.0
|
59.0
|
6.8
|
1.6
|
Ministry of Finances
|
1.9
|
28.8
|
56.8
|
10.4
|
2.0
|
Ministry of Industry
|
1.4
|
23.8
|
61.5
|
11.0
|
2.2
|
Ministry of Trade
|
3.3
|
27.2
|
54.2
|
12.8
|
2.3
|
Ministry of Agriculture
|
2.0
|
21.5
|
60.1
|
14.2
|
2.7
|
The other ministries
|
0.3
|
12.6
|
59.2
|
25.0
|
2.7
|
Municipal Councils
|
1.8
|
20.0
|
63.7
|
11.9
|
2.4
|
(N=1242)
The overall negative evaluation of the institutions
realizing privatization is equally valid for the local government
authorities. Thus for instance, the work of the municipal councils
in this field is characterized as unsatisfactory by 42.4% of the
population and 63.7% of the representatives of the business elite
(67.1% of private businessmen).
An indirect evaluation of the overall results
achieved by the major state institutions in the sphere of
privatization is to be found in the answers to the question
"Would you say that privatization, or the preparations for
privatization, have in some way affected you up to now?".
Barely 21.2% of respondents believe real changes have occurred,
while 58.9% claim not to have been affected at all.
One of the reasons for the negative evaluation of
the institutions is that people are unfamiliar with their activity.
In view of the characteristically strong social and political
involvement of Bulgarians, the fact is quite eloquent, that about
1/5 of respondents do not know or are not familiar with the
activities of parliament and the government in the sphere of
privatization. For the national privatization agency the figure
reaches 32.8%, and for the different ministries it varies between
29.3 and 40.4 per cent. It is equally revealing that twice as many
private businessmen (6.5%) reply they are not familiar with the
activity of the Privatization Agency compared to that of the
Council of Ministers (3.0%) and the National Assembly (3.2%). These
data suggest that in fact the prevailing disapproval of the
institutions is not only determined by the evaluation of their
work. In this respect public opinion is also influenced by the lack
of clear and accurate information. Moreover, the mass media form
incomplete and contradictory, and frequently politically biased,
views of the institutions. There is an urgent need to fill the
existing information vacuum - among the population as a whole, as
well as among businessmen. A wide information campaign on the
activities of the institutions, as well as the major problems of
denationalization could only be to the benefit of
privatization.
In addition there exist a number of problems
stemming from the instability of the political and economic
institutions supervising and realizing the processes of
privatization. These are money laundering, corruption, tax evasion,
politically motivated staff changes, etc. It would seem that, set
against widespread corruption, money laundering, and illegal
transactions, the covert privatization tends to be overlooked as a
negative phenomenon by the population as a whole. For the business
elite, however, the covert privatization has come out into the
open. 75.1% of the respondents believe there is a covert
privatization going on. The existing doubts about negative
phenomena -corruption, illegal transactions, etc. - restrict the
prospects for a swift and just privatization, and to a great extent
steer the process towards informal structures and mechanisms. This
tendency could discredit privatization and impede its progress.
It is extremely important to stress that according
to public opinion, privatization is exclusively the responsibility
of the institutions authorized to carry it out. With the exception
of one group of about 10% of the population, the rest have no
intention to assume any responsibilities (still less, financial
ones) for the realization of privatization and regard themselves as
uncommitted "spectators" with respect to privatization. The
involvement of larger sections of the population will encounter
serious obstacles. It is only immediate and guaranteed financial
benefit that could possibly motivate part of the population to take
a more active part in privatization. Bulgarians do not wish
to participate in privatization, they want to benefit from
privatization.
It is essential to note that the institutions
designated to carry out privatization do not enjoy the required
public trust. The problem of corruption is felt as particularly
acute. Asked "Under what conditions should privatization be
delayed or interrupted?", the representatives of the business
elite set "high incidence of corruption" at the first place
(57.2% answer in the affirmative). A similar opinion in case of
"rising inflation" is held by 27.0%, by 24% in case of
"drastic social differentiation into rich and poor", and by
25% - in case of "considerable rise of unemployment".
Clearly, social problems are accepted as more or less inevitable
elements of the changes, while corruption (as an attempt to take
advantage of the changes to one's personal benefit) could actually
make the business elite take a negative attitude towards
privatization.
The business elite's negative evaluation of the
institutions carrying out the privatization is also due to the
deficiencies of the existing legislation, the revision of which is
within the competence of the above institutions. According to 3/4
of the representatives of this group, the existing economic
legislation restricts the operations of the managers of state and
private enterprises. According to businessmen, the major
difficulties with the now acting legislation are:
• lack of reliable information on the state of the
denationalized enterprises;
• existence of speculations and illegal
transactions;
• difficulties in the valuation of the enterprises
to be privatized;
• lack of buyers.
The adopted legislative approach according to which
privatization is carried out on several levels and by different
institutions, corresponds to the established forms of management of
state and municipal property. But instead of securing the balance
of interests, it has led to lack of coordination and internal
disagreements between the institutions, which contributed to the
delay of privatization. If the present model of distribution of
functions in denationalization is retained, the dynamization of the
process would require: coordination of the process; elaboration of
practical methodological guides, and systems for training of
decision-makers and staff. Study visits and exchange of information
with the other Central and East European countries which have
achieved great progress in privatization would be particularly
useful. The Privatization Agency could initiate the clarification
and uncovering of the whole process, so that it could become
intelligible to ordinary people. This could help clear certain
doubts and allegations that on the whole the institutions are
acting in accordance primarily with backstage political, economic,
group, etc., interests and corruption.
The social subject in the privatization processes
can be defined through three major categories: supporters,
opponents, and sceptics (neutral).
The category of the firm and most ardent supporters
of privatization is largely constituted by private businessmen and
professionals (specialists with higher education), immediately
followed by highly qualified workers and specialists without
university education. These are the most highly qualified and
educated people who are the first to realize the need for radical
changes. Most of them work for state enterprises and institutions,
and live in the capital and the larger cities. These are mostly
young people (aged 29-40), predominantly male and UDF supporters.
Among those stating that privatization is indispensable and should
be carried out within the shortest possible delays, nearly 50% have
university education and 40% have secondary specialized education.
51% are supporters of the UDF (twice as many as those of the
BSP).
The above-mentioned three subdivisions of the
"supporters" category predominate among those determined to
do anything in their power to participate in privatization. The
same groups account for the most significant share of the
respondents expecting privatization to affect their personal
situation favorably.
The results of the survey indicate that the
opponents of privatization are mostly pensioners, farm workers, and
unemployed. These are relatively lower educated people, of higher
age (occupying the higher range of the age scale), living chiefly
in the smaller towns and villages, predominantly women, largely
unemployed and therefore with low living standards. Their unstable
economic situation generates a negative disposition to any more
radical changes, including privatization. Most of them are
supporters of the BSP. It is once again mostly pensioners, people
living in the countryside, the lower educated, and those who in
general oppose economic reforms, who believe that privatization
will have an adverse effect on their personal situation.
The intermediate position of the "sceptics"
(the neutral) is held mainly by white-collar workers, students, and
semi-skilled and unskilled workers (outside agriculture). They
generally maintain a more moderate, sceptical, or neutral position.
In demographic terms, the representatives of this group are
characteristically of middle age, with secondary education,
politically wavering. They typically agree with the need for
privatization and would take part in it, but on certain conditions,
and without hastiness. Most of them work in state enterprises and
institutions. Politically, there is a slight preponderance of
supporters of the BSP, with a rather significant share of
supporters of the Movement for Rights and Freedoms (MRF) and the
Bulgarian National Agrarian Union (BNAU). The members of this
category could be viewed as a source of support for privatization,
but provided new approaches are adopted and the necessary
preconditions are created to encourage participation in the process
of denationalization. The success of privatization will to a large
extent depend on the involvement of this group, which proves to be
the most numerous and has grown over the past year at the expense
of the undecided and those who reject privatization altogether.
Private business will be the most active participant
in privatization, according to the data from the surveys. In this
respect, the share of private business owners affirming their
intention to participate in the privatization has grown
considerably between the two surveys, from 24.7% in 1992, to 33.8%
in 1993. The participation of the business elite in privatization
depends on providing favorable conditions. In this respect the
position of the business elite is quite categorical - 94% of all
respondents believe it is the state's obligation to create the
proper conditions for the development of private business.
Compared to last year the share of businessmen who
estimate that it is more profitable to expand their business
through participation in privatization has grown to 59%.
Nevertheless for the time being barely one third actually intend to
participate, and 35.3% have no such specific plans.
Among the factors most likely to deter private
businessmen from participating in the privatization of state and
municipal enterprises, the crucial one is the lack of sufficient
means (41.1%), and the directly related to that disadvantageous
credit conditions (40%). Only about 23 per cent of the private
businessmen could count on obtaining credits from Bulgarian or
foreign banks if they should participate in privatization, whereas
58.9% would rely on their own funds and on association with
Bulgarian or foreign partners. On the whole, the restrictive credit
conditions appear as the most critical obstacle to the
participation of the business elite in privatization. The high
interest rates, as well as the considerable guarantees required for
allowing credits, erect a serious barrier to the dynamic
development of the private sector.
The lack of sufficient trust in the
institutions is the second most important deterring factor -
for 30 per cent of the private businessmen. Greatly simplified,
clear and open forms of privatization would to a much larger degree
draw support from the business elite. On the contrary, complicated
procedures with strong institutionalization and great influence of
the decision-makers would impede privatization by further
reinforcing the mistrust towards the process.
The third place is occupied by lack of
suitable objects for privatization (11%). The reasons for that are
on the one hand, the generally poor economic situation of most
Bulgarian enterprises, and on the other - the selection of
unsuitable and unappealing to investors sites. Nearly the same
share of private businessmen (10.9%) are uncertain of the future of
private business in Bulgaria in general.
The importance and the position of public opinion on
the privatization techniques are determined by several key
reasons:
First, different techniques imply different
modes of redistribution of national assets, to the advantage of
some sections of the population over others. The readiness and the
determination of the more privileged groups to make the most of
their starting positions and the willingness of the other groups to
accept their more disadvantageous position determine the chances of
success of the various privatization techniques. They should be
acceptable and tolerable for the greater part of society.
Second, part of the population - and
particularly businessmen - are potential participants in
privatization, which in turn is but one of the available options
for capital investment along with
bank deposits, buying of shares in private
companies, foreign currency, real estate, green-field investment,
etc. The attitude towards privatization techniques may serve as an
indicator for the likely financial support and popular commitment
to privatization.
Third, the choice of an appropriate
privatization technique also depends on the force and intensity of
the opposition from the hired work force of the enterprises about
to be privatized. An estimate of the scope of the expected
opposition could be of great help in selecting privatization
techniques comprising mechanisms for overcoming resistance and
enlisting the support of the employees for privatization.
The following privatization techniques were put up
for public evaluation in the sociological survey:
• public sale of interests and shares in enterprises
against money or privatization vouchers;
• public auctioning;
• publicly invited tender;
• buying out by the employees;
• managerial buy-out;
• renting with a buy-out clause;
• direct sale upon negotiations with potential
buyers. The selection of the proposed privatization techniques was
motivated by the following considerations:
• adequacy of the Bulgarian legislative basis for
privatization;
• comparability with similar sociological surveys
conducted in other countries undergoing transition to market
economy;
• need to determine the dynamics of public opinion
regarding privatization techniques and the development of ideas for
improving the planned and the employed techniques;
• taking into account generally established
classifications of the most widely employed privatization
techniques.
For the purposes of the analysis, the tested
privatization techniques are grouped according to several features
- degree of transparency and accessibility of the sale procedure
(sale of interests and shares, public auctioning); scope and
beneficiary of preferences (hired workers, managers, renters);
possibilities for setting preliminary conditions upon selling
(tendering, direct sale).
The general public expresses a marked preference for
the "transparent" privatization techniques -sale of interests and
shares - 15.6% in 1992 and 18.7% in 1993; public auctioning
respectively,
8.3% and 7.6% (cf. Table 7). Privatization
methods allowing direct negotiations and setting of certain
conditions prior to the sale prove to have the poorest rating among
the population. Tenders draw about 3% from respondents in both
polls, and direct sale is even more unpopular, obtaining about
2-3%.
As is evident from Table 7, nearly half of
the respondents do not have an opinion regarding the privatization
methods. In this sense all conclusions made hereafter should be
taken as merely marking out certain general guiding points. The
profile of those who have not answered the question on the
privatization alternatives (41% of the population) shows that these
are typically people with a more "passive" attitude towards
privatization and above all, those with lower education (77% of
those who have no education at all fall into this category). These
are mainly the nonworking groups (62% of the pensioners, 60% of
housewives, 52% of the unemployed).
The support for the privatization techniques
providing preferential buy-out terms is polarized depending on the
beneficiary. The most popular of all privatization techniques is
the buying of the enterprise by its employees - 19.3% in 1992, with
a slight increase in 1993 when 22.3% favor this option. Managerial
buy-out, along with renting with a buy-out clause are among the
lowest rating alternatives - respectively 2.3% and 1.2% for the
former, and under 3% for the latter.
Table 1
Privatization techniques
|
March 1992
|
April 1993
|
l. Sale of interests and shares
|
15.6
|
18.7
|
2.Public auctioning
|
8.3
|
7.6
|
3.Tender
|
3.6
|
3.1
|
4.Buying out by employees
|
19.3
|
22.3
|
5.Managerial buy-out
|
2.3
|
1.2
|
6.Direct sale
|
2.2
|
3.1
|
7-Renting with buy-out clause
|
2.9
|
2.8
|
8.No answer
|
45.8
|
40.8
|
|