Bulgaria is rich but very poor. How can that be?

Opportunities fight with challenges as the EU’s poorest country seeks to close the gap in wealth and standards with its richer western neighbours, says Rhys David

 

As Wagner’s majestic music from Tristan und Isolde and, several days later, Parsifal, washes over you, a seat in Sofia’s beautiful, bijou opera house is a good place to reflect on the EU’s most recent member country.

 

Bulgaria is a small to medium-sized, under-populated country of roughly 70,000 sq. miles, with just 7m people. Yet, it is full of surprises. Its Wagner festival is not the Met, Covent Garden or La Scala but few similar-sized countries would be able to cast such an event almost entirely from within the country’s own musical resources. Few performers, too, would want, as several did here, to sing important roles in both operas – a total of 11 hours on stage across only a few days.

 

Bulgaria, poor as it is, manages also to produce musical talents not just for its own opera houses but, like other eastern European countries, for many of the more renowned houses around the world. It is a tradition that goes back a long way, embracing such names as the basses, Boris Christoff and Nikolai Ghiaurov.

 

Its schools and universities, too, seem to have no trouble in producing near-fluent English speakers many of whom have never visited an English-speaking country. In Bulgaria those choosing to study languages are taught their other subjects as well through the medium of their chosen foreign language. This helps the best to develop an impressive grasp of vocabulary and idiom.

 

Since opening to the world with the fall of Communism in 1989 and entry into the EU in 2007, Bulgaria has experienced unprecedented new levels of prosperity. Its economy has been growing in recent years at more than 3 – 4 per cent a year and will match that performance again this year. Services now account for nearly 60 per cent of the economy, with much of that due to an annual 8m a year visitor tourism sector. Manufacturing accounts for 24 per cent – still considerably higher than the western European average but now more focused on modern light industries than in the past. Agriculture at 5 per cent is also higher than in more advanced EU member states and less mechanized but includes a strong export-orientated wine sector.

 

In the increasingly vital tourism sector, the country been seeking to capitalize on its outstanding cultural and archaeological heritage. Investment has taken place in new high standard tourism facilities, including hotels, and in the development of important sites. Just in the last few decades important new discoveries of Roman antiquities have been made in the capital Sofia, the ancient Roman Serdica. These include an 3rd-4th century amphitheatre, preserved under the city’s 5-star Arena di Serdica Hotel outside the former city gates, and Roman ruins preserved in an underground display under the modern city centre. The visitor can walk along slabs polished by generations of shoes in the Roman era, including no doubt by the Roman emperor, Constantine the Great, believed to have had a special affection for the city.  

 

Seat of the monarchs for seven decades after the  liberation of the city from the Ottoman Turks with Russian help in 1878, Sofia also has a not very distinguished-looking royal palace, and, in several monumental blocks that formerly housed Communist ministries, banks and party headquarters, a reminder of grimmer days past. (There is a Museum of Totalitarian Art for those interested in Communist-era paintings, sculptures and monuments.)

 

Its churches, which largely survived the Communist era, remain one of its glories, however. Saint Alexander Nevski with its highly decorated interior was named after the Russian patron saint to honour the role played by Bulgaria’s Slavic cousins in securing freedom. The 6th century Sophia Basilica, a contemporary of Hagia Sophia in Constantinople is one of the most important examples of early Christian architecture in south eastern Europe. The 4th century St. George rotunda church, the oldest preserved building in the city, has frescoes dating back to the 10th century. More than 80 per cent of the population profess to be Orthodox believers in a country which embraced Christianity in the 9th century and translated the Bible into Bulgarian, a close relation of Russian shortly after.

 

There are other towns and cities with an equal claim to demonstrate the varied history of a country that has seen not just ancient conquerors but power in the hands of Bulgar, and, for two centuries from the 10th and 11th century, Byzantine overlords as well. In Plovdiv a Roman theatre, one of the best preserved in Europe was uncovered in a landslide in the 1970s and restored well enough for a range of events to be held there, just as in Roman times. Nearby, in the centre of Plovdiv, excavations uncovered a stadium, a part of which has been exposed, most of its vast length unfortunately having to remain under the main shopping street.

 

Plovdiv, formerly Greek and Roman Philippopolis, once the capital city of Philip the Second, father of Alexander the Great, lays claim to be the oldest continuously inhabited city in Europe, its origins going back even further to Trojan times, and hence older than Rome or Athens. Its old quarter houses an important group of streets lined by merchant properties from the early 19th century in Bulgarian National Revival style, the most visited of which is the Balabanov house, originally built for a wealthy textile merchant, Hadji Panayot Lampsha. This year the city of roughly 350,00 people has been celebrating as 2019 European Capital of Culture.

 

There are world heritage sites, too, on Bulgaria’s Black Sea coast, where Soviet bloc aristocracy (and more recently bargain-hunting western Europeans have flocked for sun sea and sand. Varna on the Black Sea coast offers more ancient remains, including nearby  Odessos, home to a huge Roman bath complex, and,  a little further away, Nessebur, ancient Messambria, another Thracian, Greek  and then Roman town, which later became an important trading centre with strong links to Constantinople, and now a Unesco World Heritage site.

 

There are two other jewels, however, contributing to the remarkable array of treasures on offer in Bulgaria, somewhat surprisingly third after Greece and Italy in the number of cultural and archaeological sites contained within it. The Thracian plain, south of the Balkan Mountains that run east west across Bulgaria, roughly parallel with the Danube as it flows towards the Black Sea, was home to warlike tribes who were allied to the Trojans during their famous war with the Achaeans.

 

The Thracians, who lived in this area from around 1000 BC, were highly skilled craftsmen, producing exquisite jewellery, workshop and household items, and military equipment. Their work is on display at the national archaeological museum in Sofia and in a smaller but still very impressive museum on site in Kazanluk. Much of this gold has been discovered in the unique conical burial mounds that cover the Thracian plain, or Valley of the Thracian Kings, a replica of one of which with stunning internal decoration on its walls and cupola ceiling can be seen near Kazanluk.

 

There are other towns which have played an important part in Bulgarian history, such as the old capital, Veliko Tarnovo, situated on a bend in the river and protected by surrounding hills, and 140 monasteries, the spectacular Rila and Bachkovo settlements among them, and like many of the others  offering accommodation to visitors.

 

It would be hard not to wish this country of friendly and enthusiastic people well as they integrate further into the EU but difficult, too, not to feel some apprehension. The population has fallen from a figure of 9m under Communism. It could hardly be otherwise when so many of the young and most able have left for Germany, Italy, Britain and other countries in search of well-paid employment and to escape youth unemployment of 12 per cent. The birth rate, too, is too low to be self-sustaining.

 

Average incomes are around Euro5000 a year, though higher in Sofia where newer sectors such as information technology have seen growth. Old people who used to be able to afford a holiday – the country was a big Communist-era holiday destination for citizens of the former Soviet Union countries – now say they are no longer able to do so and whereas in western Europe the older generation is helping its youth with the high cost of housing and other expenses, in Bulgaria younger people – or those in good jobs at any rate – are supporting their parents, many of whom also rely on remittances from overseas Bulgarians.

 

Economic growth is helping and is expected to be faster than the EU over the next few years. Indeed, Bulgaria has gone from living standards of around one third of the EU average to more than half. The economy will need to grow at a much faster rate, however, to close the gap and is being hampered by the loss of its most talented people in the engineers, doctors, IT professionals and other graduates who have headed West.

 

The politics they have left behind is another impediment. The current strongman Prime Minister, Boyko Borisov, is a former Mayor of Sofia who has been a firefighter, police academy professor, professional footballer, national team karate coach and bodyguard to former Communist dictator, Todor Zhivkov, and former king, Simeon II. The government of GERB, the centre right party he founded has been criticised in EU capitals in the West for allowing bad practices to flourish. The concern is over the close ties that exist between government officials, and local businesses that have resulted in contracts being given to a handful of privileged companies.  When officials can exert their influence through excessive regulation, or over who gets jobs, school places or other privileges and permissions, a climate is created into which bribery, corruption and organised crime can enter. Such interference, too, puts sand in the wheels, slowing down development and hence economic growth while ed tape and excessive bureaucracy are negotiated and permits and other favours are bargained for.

 

In the meantime, Bulgarians are having to live with a disconcerting jolt away from the familiar pattern of previous centuries not least the break with their former liberator (and subsequent Communist overlord) and fellow Orthodox Slavs in Russia.

 

Derelict buildings, especially in the depopulated countryside are common, and are only slowly being replaced by Western investment. One of the biggest new investments is a huge sanitaryware plant outside Plovdiv built by US group Ideal-Standard. Putting to one side the ubiquitous Lidl supermarket group, there are few other signs of large scale new investors capable of filling the gap left by previously protected domestic concerns. Russia can still exert its influence over the country, however, through its strong position in the energy sector. It is an important operator of refineries on the Black Sea coast and its oil company Lukoil has a large share of the domestic fuel market.

 

The successes have been in sectors such as IT that have concentrated in Sofia, offering higher wage levels that have given the capital’s citizens higher wage levels than the Euro5000 average in the country. The result has been, like emigration, to draw away young people from the country at large.

 

Tourism, too, has been a success but is subject to its own ups and downs. The country draws in large numbers from neighbouring countries and has an increasingly wealthy western clientele using its large, international hotels. This year, however, has seen declines so far from Russia (largely as a result of price competition from neighbouring Turkey) and some EU countries, though not the UK.

Shops selling souvenirs have proliferated at tourist sites and in parts of Sofia where the intention has clearly been to attract higher end businesses. The shopkeepers, however, report a slow year even for Bulgarian speciality products such as those based on the country’s centuries- old rose cultivation sector.

 

EU funding since membership has contributed substantially to rates of growth and is evident in some of the new roads that now link major centres in the country and beyond. Varna is on the designated trans-European E-route linking it (in theory) all the way to Coruna, and Sofia is connected by its E routes to Lisbon, Riga and Thessaloniki. There is the challenge of reduced funding from the EU to be faced as well. Bulgaria received Euro10bn under the EU’s 2014-2020 funding package, but this level of support is set to decline as the EU seeks to adapt to more difficult conditions elsewhere in the bloc and to the loss of UK contributions.

 

Polls have shown consistent support for the EU, coupled, however, with disappointment at the impact it has had on the domestic economy. Therein lies the country’s dilemma: polls have shown a principal reason for the EU’s good standing in the public estimation is the freedom it has given Bulgarians to move abroad in search of a better future. It is the loss of those who might be best equipped to contribute to its transformation economically and politically that is likely to hold it back.

 

August 2nd, 2019

Rhys David is chair of Nova Cambria, the Welsh policy institute

 

 

 

 

 

 

 

US Lessons for Britain, for better and worse

Consideration of the US ought not to be all about Trump. There are some respects in which they do less well than us, but others surprisingly where we could still learn some lessons, writes Rhys David

How much more would you like to pay? That’s the message on the screen when the salesperson in a US coffee shop or restaurant, or a small shop owner, pivots the till point credit card reader around to face the buyer after swiping. The technology is new, but it represents a sideways development rather than an advance, adding an inefficiency into US transactions that has been largely eliminated in the UK, and much of the rest of Europe, through the widespread adoption of contactless payment.

The new devices – about the size of a small tablet computer – overcome the embarrassment on both sides of asking the purchaser whether they want to add a gratuity. Instead, the till does the job, asking the customer whether they want to add another 15 per cent (the starting point), 20 per cent or even 25 per cent. There is the option of making your own choice – 30 per cent perhaps or 10 per cent, or, perish the thought, no tip at all. (Anyone who has watched Larry David (no relation) arguing with the maître d’ and getting his car blocked in the car park in comedy series Curb Your Enthusiasm after refusing to supplement the tip that had already been added will know this step is taken at your own peril.)

As the tip must be added after the amount has been rung up, it means contactless is much less widespread for small transactions, such as the purchase of a coffee or a newspaper, than in Britain. To authorize the extra amount that the customer has added it has become necessary to move away even from chip and pin (the predecessor of contactless in Europe). Instead, after you have added your tip on the till, you need to add a digital signature to authorise the extra amount being collected using a finger on screen or special pen.

There are other ways, too, in which the US – birthplace of so much modern technology – seems behind the times. Amtrak trains are large, comfortable, staffed by cheery conductors in crisp uniforms – and slow and infrequent. The 215 miles from Boston to New York takes four hours, admittedly having to cross several spectacular and presumably slow-speed long bridges over estuaries on the way.

The 220 miles on to Washington takes a further three hours, in both cases rendering air travel a preferable option for the time conscious. By contrast the 250 miles from London to Newcastle can be accomplished in 12 minutes under three hours and the 170 miles to Leeds in two hours twenty minutes, and British railways are not even very fast by world standards. My journey from Boston to New York took nearly five hours because of that familiar railway issue – signaling problems. Nor are the trains very frequent. The Boston-New York service runs at two-hour intervals, two trains leaving within five minutes of each other, one slow and the other slower, followed by a two-hour gap.

This journey between populous cities – Boston is 4.5m, New York is 8.2m and Washington is 7.4m, with other big cities en route – would clearly be highly suit able for the equivalent of Europe’s or Japan’s high speed trains, reducing the journey to New York from the two other cities to 90 minutes or so, less than the time it would often take to travel to the nearest airport, check in and wait for a possibly delayed take-off. The vigorous opposition of the airlines to any competition brought about by private sector seed funding, as would be needed in the case of new railway infrastructure, has made this politically impossible in the free market US. It is not a fight Donald J. Trump is going to take up.

One battle he has engaged in, however, is trade, seeking to punish China for what he sees as unfair practices, rewriting agreements with Mexico and Canada, and lamenting the large trade balance in Europe’s favour. This does ignore the extent of US ownership of European assets and the scale of US-owned manufacturing in other countries, including in Europe. These operations generate substantial income for the US from repatriated profits. The US is also the world’s biggest provider of financial and other services and its technology companies – Google, Apple, Facebook and Amazon – dominate in their fields.

Nevertheless, the extent to which US manufacturing has retreated can come as a shock. In places like Saco, once a centre of textile machinery manufacture, the once US industry has left only vast mills converted to apartments and offices in its wake, and has lingered on for only a couple of decades further south in the Carolinas and Georgia where much of it moved post-war. Most recently it has been the turn of the US-owned motor industry to suffer a similar fate.

The US industry’s output is still huge, as is to be expected in a market of nearly 18 million units a year, but sales of cars by foreign manufacturers, from Europe, Japan and South Korea, from their US plants and imported vehicles now exceed by roughly 2m. units those built by the US big three – GM, Ford and Fiat-Chrysler America. The average US content of even these suppliers’ vehicles is only 38 per cent. Ford has thrown in the towel as far as supplying passenger saloons is concerned, deciding that in the US market it will concentrate on trucks and SUVs.

Whether a switch to electric vehicles will bring a return of US manufacturing through the arrival of new carmakers such as Tesla, and the possible emergence of other new entrants into motor  manufacturing, such as the technology companies, Apple and Amazon,  is unclear but the traditional US carmakers appear to be behind their international competitors, Toyota, Nissan, Hyundai and BMW among others,  in developing battery alternatives.

Yet, as the restrictions placed on Chinese phone technology group, Huawei, shows, when it comes to action designed to protect US business interests, US administrations can and will act with a decisiveness for good or ill, that other governments would shrink from.  The US may yet see an upturn in manufacturing, whether driven by reshoring – the repatriation of activities previously dispatched overseas that has already begun – or trade barriers. The American public will ultimately decide whether the extra costs this is likely to impose on it are acceptable.

If some weaknesses in processes and some chinks in US commercial invincibility – particularly in older industries – can now be discerned, there are many respects in which in ordinary life the US does get it right.  This is why it remains such an attractive country. The friendliness and levels of service provided  by customer-facing businesses remains impressive, extending even into fields such as car hire, where the European experience – overstretched booking clerks, less than satisfactory vehicles, phantom damage appearing later as large additions extracted without consultation from debit and credit cards – provide a much better experience for the visitor.

In New England, and perhaps in other areas too, the problems faced in Britain by the residents of many rural areas – closure of shops and other facilities, making necessary a visit to a supermarket many miles away for even necessities – appear to be under better control. Remoteness in some parts is admittedly responsible for keeping the chain stores at bay, and rendering home delivery too expensive, but their absence has allowed the ubiquitous village store to appear to thrive. Unlike the British Spar, Premier, local Co-op or independent, these stores manage to offer a range of services to the community and to be focal points for meeting up and exchanging news and information.

The village store is where you might go not just for a loaf of bread, a pint of milk, or breakfast cereal but to actually buy and eat your breakfast, cooked on the spot, or to get a fishing licence, wood for the fire, a mid morning (or afternoon) cup of coffee self-served from one of several insulated jugs on a conveniently set up table, and many grocery varieties, some hardware, plus a limited range of clothing, gifts and novelties. Interestingly, unlike most British convenience stores, huge displays of beers, spirits and wines from around the world are missing, drink appearing to play a much smaller part in American life than it now does in Britain.

This surprisingly is true of another institution – racing where the contrast with the UK could not be starker. At Belmont Park, home of the Belmont Stake, one of the races in the US Triple Crown, entry into the park is a mere $5 and this entitles the holder to visit every public part of the ground, including the grandstands and to bag a place next to the finishing line. Or, you can stay in the huge park grounds and watch the racing on the big screens dotted around. Absent are the champagne tents, the Guinness tents, the gin tents, the fish and chip bars, pulled pork pagodas, the burger vans, and the other inducements to drink and eat to excess of the UK racecourse. Present are hundreds of families with young children enjoying a picnic.

There are other things they do well in the US, too. Under the wing of the federal National Parks Service the register of National Historic Landmarks (NHL) brings together thousands of buildings, sites, structures, objects and districts deemed worthy of preservation because of their significance in the development of the US, including presidential homesteads and business leaders’ Victorian-era houses. Sagamore Hill on Long Island, for example, gives a fascinating insight into the life of the first Roosevelt  – Theodore – who assumed the presidency after William McKinley was assassinated in 1901, Roosevelt is now mainly remembered for his big game hunting exploits and his house is indeed full of such trophies, displayed as animal heads on walls, elephant feet as footstool, rhino horns as inkwells, and bearskins as rugs.

However, the museum in the grounds in Long Island also shows another side to Roosevelt, who only went on his hunting safaris so he would not get in the way of his successor. He later disapproved of William Howard Taft’s actions in the White House and stood as a dissident Republican against him in the 1912 election, winning enough support to let in Democrat, Woodrow Wilson. In office Roosevelt was a reforming president challenging corrupt politicians and businessmen and breaking up the monopolies that dominated industries such as oil and banking. He also started the US national parks.

American historic properties under NHL  management appear sober and serious, telling a story in a straightforward way without feeling the need to push relentlessly the various dimensions of the inclusivity agenda, which has become part and parcel of  the approach generally adopted by the UK’s heritage custodians, notably the National Trust and English Heritage, whether it is the need to entertain the young or project guilt for whatever historical sins have become the latest anathema.

For all its reputation as the land of free enterprise and enemy of public sector meddling, in some respects the US can now seem in certain respects much less in thrall to commercialism than Britain. Surprising, occasionally frustrating, but always interesting – this is what makes the US a great place to visit from time to time. It offers an insight – without having delved into its politics too deeply – into the directions in which western society is moving, many of which we might not want to follow, but perhaps some others we might.

This article written following a visit to the states of New Hampshire, Maine, Massachusetts and New York in May 2019.

June 3rd, 2019

Rhys David is chair of Nova Cambria www.novacambria.wales