In June the Ministry of Finance announced that the Bulgarian government has received the last trench according to the 3-year agreement with IMF from 1998. The completion of the agreement is considered as a success, and as indicator of proper choices of economic policy. Indeed, the sequence of measures that was negotiated with IMF increased economic freedom in general, and the positive changes in the business environment during the last 3 years can be attributed to both the Bulgarian government and IMF. We would like however to mention the most significant measures agreed upon but not taken by the government: 1/ Computerization of General Directorate "Tax Administration" and General Directorate "Customs". The deadline was 31.12.1999; the measure is not implemented so far. 2/ Privatization of Biochim Bank. The deadline was end of 2000; so far the bank is state-owned. 3/ The loans from State Agriculture Fund should be backed by mortgage of land. The deadline is by the end of the agreement; no significant progress is still made. 4/ Drafting a new energy law consulted with the World Bank. The law that was adopted by the parliament does not provide for liberalization of the market and was disapproved by both IMF and World Bank. Relevant amendments were drafted in March 2001 but were not approved by the former parliament. 5/ Privatization in the power generation in practice did not happen. The agreement provided that small hydro- and thermal power plants were sold in 1998 and 1999, at least one big thermal plant in the first quarter of 2000, and by the end of the agreement most generation and distribution facilities be privatized. 6/ Liberalization in the natural gas retail distribution was not carried out. The common feature of unfulfilled promises is that they all require a will to cut down state intervention in economic life, i.e. to eliminate the tools of political control over significant cash flows (tariff duties, banking sector, energy supply). |
