For the past six months, tens of thousands of Bulgarians have taken to the streets of Sofia to call for a radical fight against corruption, organised crime and local oligarchy.
The “Bulgarian Spring”
Corruption in Bulgaria is endemic, affecting the political, business and judicial spheres at large. In addition to being the European Union’s poorest nation, Bulgaria recently recorded its worst performance over the past twelve years on International Transparency’s Corruption Perceptions Index (86th out of 170 countries).
This melting pot of poverty and corruption led to the outbreak of the “Bulgarian Spring” in June 2013, when Delyan Peevski, a 32-year-old media magnate prosecuted for extortion was appointed by the government to head the powerful national security agency. For more than six months now, thousands of Bulgarians (mostly university students) have been regularly demonstrating in Sofia, demanding the resignation of Plamen Oresharski’s new socialist-led government, which they see as a symbol of the endemic collusion between political and economic oligarchs.
Ongoing protests are not a response to the hardships of financial austerity or the expression of anti-EU feelings. They are more political than economic, calling for the overhaul of Bulgaria’s post-communist transition path. Despite Bulgaria’s accession to NATO and the EU, many Bulgarians believe that their country has failed to break with its communist legacies. Systemic corruption and state capture, strong centralisation of political authority, heavy state bureaucracy, lack of transparency and accountability mechanisms have proved deep-rooted “path dependencies.”
Despite clear slogans: “Octabka (Resign) Mafia!”, “NOresharski, NOligarchy!” and months of relentless mobilisation, the government refuses to comply with protesters’ demands, thereby increasing public frustration.
A missed opportunity?
At first, this unprecedented mobilisation of Bulgarian civil society, which so far has been relatively weak, was welcomed as a formidable window to greater democratisation, an opportunity to make state institutions more accountable, to break with endemic cronyism and allow political renewal. Unfortunately, over the past few weeks the protests have started to lose ground.
Indeed, if the protests reflect a general loss of confidence in the Bulgarian political class, its expression is far from being unified. Protesters have no charismatic, identifiable leader and no coherent demands. Taxi drivers demonstrate against the creation of a new tax, while public servants ask for a 10% increase in salary. As often occurs in hard times, corporatist claims tend to prevail over public interest. The protests have too many facets to significantly influence the political agenda.
Moreover, it seems that the “Bulgarian Spring” is now experiencing the limits of its capacity for further expansion. Since its initiation, social mobilisation has predominantly affected the young, educated middle and urban classes. Other groups are not represented because the culture of protest tends to be weaker outside big cities and capitals, as social control and the risk of taking to the streets is much higher.
Public distrust in state institutions and political elites in Bulgaria is also contributing to a general weakening of state credibility, capacity and effectiveness. The government has a small, unstable, and arbitrary majority in the Parliament and is increasingly subject to instability.
More worrying, this political uncertainty combined with an uncontrolled increase in the number of asylum-seekers and refugees (more than 8,000 this year, mainly from Syria) is responsible for the exacerbation of ultra-nationalist and populist discourses. In early November, a neo-Nazi party (called the Bulgarian “Golden Dawn”) was officially created attracting disillusioned members from the extremist and anti-EU “Ataka” party and intensifying the normalisation of xenophobic and racist rhetoric.
Implications for the Bulgarian business environment
Affecting key conditions of certainty and predictability, corruption and weak state capacities have a direct negative impact on the quality of business environment in Bulgaria. Firms are constrained by unstable legal frameworks and inefficient bureaucracies, while the considerable influence of the Bulgarian Mafia over economic activities undermines economic competitiveness and foreign investment. Indeed, empirical studies indicate that a high degree of corruption, combined with a slow bureaucracy and an inadequate protection of property may significantly discourage foreign investment by increasing the cost of doing business.
The effects of corruption on FDI are contingent upon state capacities and domestic legal and regulatory frameworks. Hence, contrary to Bulgarian conditions, if a country presents a high level of perceived corruption but is able to effectively enforce and protect economic freedoms, investors may not be deterred by corruption. This is one of the reasons why East Asian countries, characterised by high levels of corruption but a strong state and institutional capacities (creating a high degree of certainty and predictability) are leaders in attracting FDI. Bulgarian institutions do not measure up.
Political risks in Bulgaria remain latent due to endemic corruption and significant institutional weaknesses. This is why future political and social developments are of high importance and should be closely monitored to prevent further vulnerability to instability.
Democratic transition cannot happen over night. This is a chaotic process of changes that involves backward steps as much as forward moves. Victor Orban’s recent nationalist deviations in Hungary, a country taken so far as an example of well-advanced democratic transition, demonstrate how a “flashback to 55 years previously” remains feasible.
More importantly, this suggests that analysts have overestimated the EU’s transformative power on Central and Eastern Europe countries, while they have underestimated the weight of “path dependencies” and communist legacies. In these countries, the diffusion of democratic norms and rules are still in process, not accepted and embedded yet in society and the political sphere.
