News from Bulgaria, 96-09-06

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From: Embassy of Bulgaria <bulgaria@access1.digex.net>

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

CONTENTS

[01] BULGARIAN FOREIGN MINISTRY ON THE SITUATION IN IRAQ

[02] BULGARIA-IMF

[03] BULGARIA-ISRAEL: PARLIAMENTARY CONTACTS

[04] COUNCIL OF MINISTERS DECISIONS

[05] GOVERNMENT OKAYS PRIVATIZATION OF PLAMA REFINERY

[06] ASSETS FOR MASS PRIVATIZATION DOWN 6,800 MILLION LEVA

[07] PARLIAMENT PASSES RADIO, TV LAW, AGAIN

[08] BUSINESS PRESS

[09] BULGARIA'S STRUCTURAL REFORM AND I.M.F.

[10] WILL BULGARIANS EAT MEAT?

[11] CEILING PRICES TO BE INTRODUCED FOR FLOUR, MILK, CHEESE, COOKING OIL

[01] BULGARIAN FOREIGN MINISTRY ON THE SITUATION IN IRAQ

Bulgaria believes that it is necessary to find a political solution to the existing problems and that all states should refrain from actions going beyond the resolutions of the UN Security Council. This would make it possible to find a mutually acceptable peaceful solution to the conflict, guaranteeing the national sovereignty and territorial integrity of Iraq. This would also make possible the gradual lifting of the UN sanctions against Iraq which have brought great suffering to the people of Iraq and serious economic damages to third countries, including Bulgaria, the spokesman said.

The Foreign Ministry also expresses the hope that a timely political resolution of the crisis would bring back in force Resolution 986 of the UN Security Council, providing for selling Iraqi oil against foods and medicines for the Iraqi population. The normalization of the situation would also have a positive effect on the overall efforts for finding ways and means for compensating the losses of third countries on which Bulgaria has long been insisting as one of the states hit worst by the implementation of the sanctions, the Foreign Ministry spokesman said.

[02] BULGARIA-IMF

Anne McGuirk advised the Cabinet to start the introduction of the so-called non-formal economy by closing down loss makers and encouraging efficient private companies. Bulgarian statesmen cannot expect the private sector to fill in all the holes in the national budget by constantly increasing taxation rates.

The problem is not in taxes but whether they actually reach the budget, said Anne McGuirk. The IMF Mission Leader said that the raising of taxes is harmful to the economy and the continuation of this policy would ruin the as it is slowly developing production.

The IMF takes into consideration the considerable progress in the structural reform and the banking sector but expects to see concrete results in the implementation of the conditions of the fourth stand-by arrangement during the next IMF mission, Ms McGuirk said.

[03] BULGARIA-ISRAEL: PARLIAMENTARY CONTACTS

The two parliament leaders voiced satisfaction with the progress of Israeli-Bulgarian relations and discussed topical Middle East issues, said the parliamentary press office. Mr Tihon also met the parliamentary Bulgaria-Israel Friendship Group in which all parliamentary forces are represented.

The sides focussed on ways of further promoting bilateral cooperation.

Mr Sendov was reportedly invited to visit the Knesset in December. It will be his first official visit to Israel.

Later today the Israeli guest met Bulgarian Foreign Minister Georgi Pirinski. The two voiced desire to activate further bilateral relations and bring them up to a higher level, said the Foreign Ministry. The sides discussed bilateral trade and opportunities for developing cooperation in tourism.

Mr Tihon said Israel is ready to help Bulgaria overcome the crisis provided that Bulgaria creates a favourable climate for foreign investors. He pledged to meet personally Israeli Prime Minister Benjamin Netanyahu and other cabinet members and ask them to provide a more tangible assistance to Bulgaria.

Dan Tihon was also received by Bulgarian Prime Minister Zhan Videnov. He briefed the Prime Minister on the peace process in the Middle East and the hopes for its successful completion. Zhan Videnov voiced firm belief in the future development of bilateral relations and acquainted the guest with the problems facing the Bulgarian government and the hurdles in the financial sphere. He stressed the cabinet's efforts to step up the reforms including privatization in all fields of economy, and to benefit from Bulgaria's location by launching infrastructure projects within the framework of the law on concessions.

Mr Tihon asked about the motives of the Supreme Court to reverse the sentences of the People's Court against regents, prime ministers and ministers of the cabinets that ruled this country immediately before the communists took power in 1944, voicing hope that there is no chance for an upsurge of xenophobia in Bulgaria.

Attending the meeting was Israeli Ambassador to Bulgaria David Cohen and MPs of the Knesset.

The significance of the celebrations on the opening of the reconstructed Sofia Synagogue, the past and present of the longstanding friendly, though not fully utilized Bulgarian-Israeli relations, topped the agenda of the talks between Mr Tihon and Bulgarian President Zhelyu Zhelev, said presidential foreign policy adviser Kamen Velichkov.

In his capacity as representative of the new Likud parliamentary majority in Israel, the guest assured Dr. Zhelev that Likud will follow the traditional Israeli policy for cooperation with Bulgaria and that his party will be more friendly to Bulgaria than the Labour Party has been, said Velichkov.

Mr Tihon compared the situation in Bulgaria with that in Israel in 1983-85: high inflation, economic problems and high unemployment. He further recalled that his country succeeded to overcome the difficulties by ensuring order and security and appointing the first ever coalition government of Likud and the Labour Party.

[04] COUNCIL OF MINISTERS DECISIONS

Today's government sitting adopted a decision setting the number of students to enroll in PhD programmes in higher schools and other research institutions this year. State financing will be provided to 350 full-time and 100 part-time students in PhD programmes. Another 557 full-time and 271 part-time students will pay for their tuition. The monthly grants will be increased from 1.45- to 2.2-fold the minimum monthly wage for the country.

The cabinet members also approved in principle a scheme for extending and refunding the money budgeted for the presidential campaign. A total of 9 million leva will be made available for the campaign. October 4 is the deadline for filing claims for subsidies and interest-free loans by presidential candidates. Candidates who fail to garner over 1% of votes will be expected to refund the money within a month after the election results are officially announced.

The Council of Ministers decided this country should accept the additions to the fourth protocol to Bulgaria's Europe Agreement. This in effect means goods made in Bulgaria from raw materials imported from European Union member countries, the Czech Republic and Slovakia, will be considered Bulgarian-made, and will be charged lower duties in the event of export to the above countries, the Minister of Trade and Foreign Economic Cooperation Atanas Paparizov said.

[05] GOVERNMENT OKAYS PRIVATIZATION OF PLAMA REFINERY

The amount may look small but no other potential buyer would pay it because of the refinery's large debts, Blagoev said. Negotiations were also held with other companies, including some of the world's top ten oil corporations.

Blagoev said the refinery's fixed assets, valued at 8,000 million leva, were indicative of the scale of the deal. The amount Plama's debts is still being established; it is at least $100 million and nearly 7,145 million leva, or a total of $135 million, according to Vesselin Blagoev.

The draft contract does not include a clause on the deadline for the buyer to sign a settlement with the refinery's creditors. The PA idea to set a three-month deadline for such an arrangement has been abandoned. According to Blagoev, the standard mechanisms of a free market economy are a sufficient guarantee that the buyer will settle its relations with creditors within a sensible timeframe, and the PA does not need to intervene in this matter. If the buyer fails to reach an agreement with a creditor, the creditor may initiate bankruptcy proceedings in court, the PA chief said.

In addition to the obligation to settle the refinery's debts, Euroenergy committed to investing 12,000 million leva over 5 years. It reached an agreement with the trade unions at Plama to promote employee interests.

The deal has already been okayed by the PA Supervisory Board. The offer was approved after a several hours' meeting of the Board yesterday. Euroenergy also submitted a business plan to be introduced in October.

[06] ASSETS FOR MASS PRIVATIZATION DOWN 6,800 MILLION LEVA

The Cabinet discussed the question of combining a holding structure with mass and cash privatization techniques.

[07] PARLIAMENT PASSES RADIO, TV LAW, AGAIN

The President and the opposition will probably refer the matter to the Constitutional Court.

President Zhelyu Zhelev returned the act, passed in July, objecting to its principles. According to the President, many provisions are inconsistent with the Constitution. Some texts restrict the freedoms of expression and speech, prevent journalists from freely expressing opinions, and pose the danger of censorship, he said. The President also pointed out that the national Board for Radio and Television established by the act would be a partisan body, and that the law discriminates among the media on the basis of ownership- state-owned and private.

The Socialist majority did not accept the President's objections. Socialist and opposition MPs engaged in heated debates. The opposition emphasized the law runs counter to the Constitution and the requirements of international media experts. The Socialists ruled out this criticism.

Three Parliaments worked on the law for six years. It is not perfect but states the basic rights and obligations of journalists in the electronic media, the Chair of the parliamentary Committee for Radio, Television and BTA Klara Marinova said. MPs of the opposition Union of Democratic Forces (UDF) countered, saying the law needed too many changes.

Marinova also said opinions of journalists and media experts were taken into account when developing the law. According to the opposition, foreign experts made many objections to the law. The need to lay down the rules for the operation of the Bulgarian National Radio and Bulgarian National Television is obvious, Marinova also said during the debates.

MPs of the ethnic Turks' Movement for Rights and Freedoms (MRF) said sooner or later the electronic media law will run counter to the Framework Convention for the Protection of National Minorities, and urged that ethnic groups in this country should be granted the right to have programmes in their mother tongue.

The law, passed by Parliament on July 18, rules that information on the air should be comprehensive, reliable and objective, and news reports should be distinguishable from commentaries. A special text guarantees the plurality of opinions. The law also guarantees non- interference in individuals' private life. It bans propaganda programmes and the promotion of unregistered religious groups. It provides for the establishment of a National Board for Radio and Television to monitor implementation of the law by radio and television networks and concession contracts signed by them. The 11- member board would elect and dismiss the managers and governing and programme boards of the national radio and television. The law also regulates the operation of other radio and television networks and the right to distribute radio and television programmes.

So far electronic media have been regulated by Interim Statutes adopted under an agreement of the main political forces in late 1990.

[08] BUSINESS PRESS

Between April and June, this country imported goods valued at 81,180 million leva.

During the period, Bulgaria's largest trading partners were the member countries of the Organization for Economic Cooperation and Development, which accounted for 42,790 million leva of the exports and 41,355 million leva of the imports.

This country's trade was most active with Turkey, which absorbed Bulgarian goods worth 8,031 million leva and supplied merchandise valued at 1,500 million leva, the daily says.

Exports to the US totalled 951.7 million leva, and imports from there, 2,618 million leva.

Bulgaria's exports to the European Union countries aggregated 32,094 million leva, April to June. Among the Fifteen, the largest volume of business was done with Italy: 9,772 million leva in exports and 6,039 million in imports.

Exports to Macedonia amounted to 2,962 million leva, and imports to 464 million leva.

Bulgaria strictly applies the trade embargo on Iraq. The National Statistical Institute says Sofia did not sell Baghdad a single lev's worth of goods between April and June.

[09] BULGARIA'S STRUCTURAL REFORM AND I.M.F.

IMF Mission Leader for Bulgaria Anne McGuirk will leave unsatisfied with the first review, Mr Alexandrov says. Bulgaria has not met a single condition of the memorandum: neither inflation nor the budget deficit nor the exchange rate have been contained, he adds. According to the former finance minister, it is clear even at this point that this country will never attain the parameters of the arrangement and the IMF may right now give up its further implementation.

"We are faced with the need to follow blindly the directions of the IMF because we are verging on bankruptcy," says Dimiter Ivanov, a professor of international economics in Britain, in an interview for "Standart News." He believes that the essence of the effective arrangement with the IMF is not the funding but the IMF endorsement of the progress of the structural reform. The financial assistance of the IMF and the World Bank is too small, but a positive opinion on their part about the start of the reform will open an opportunity to start talks on a restructuring of the country's foreign debts.

The debt trap confronting Bulgaria now is exceedingly serious and, together with the investment paralysis, dooms this country to extraordinarily costly solutions about a way out of the crisis, Mr Ivanov emphasizes. He believes that the debt can only be restructured with the help of international creditors other than the IMF and the World Bank, which would be willing to agree to longer-term financing.

[10] WILL BULGARIANS EAT MEAT?

Mr Kouzmanov predicts large-scale bankruptcies and restructuring in the meat-processing sector in 1996-1997. So far the producers sold meat and sausages at prices lower than their production cost as they sought to reduce the number of pigs which they are unable to feed given the high fodder prices. According to Mr Kouzmanov, however, it is not clear whether consumers will buy at the new prices.

The crisis in meat processing was caused by the grain crisis which started in 1995 as well as by the shortage and high prices of fodders, AMPB Chairman said. In his view, imported machines, technologies and consumables account for 20-30 per cent of the prices of meat products and that is why the latter were influenced by the foreign exchange spikes of the past few months.

According to figures of the National Statistical Institute the prices of fodders soared 350 per cent during the past two years. Fodder grain went up nearly 9 times within a year, according to market figures, cited in a signed report in yesterday's issue of "Troud" daily.

Figures of the National Statistical Institute show that 134,000 t of meat (pork, mutton and beef) were produced in 1995. This was 5,000 t up from 1994. Poultry meat included, the total amount of processed meat added up to 212,000 t. 92,500 t of pork was produced in 1995 which is 7,000 t more than in 1994 but three times less than the meat produced in 1991, show figures of the Ministry of Agriculture and Food Processing.

On August 28 the collegium of the Ministry of Agriculture and Food Processing decided to reduce the pig and poultry population because of the fodder shortages. The Ministry decided to prioritize the preservation of the cattle population because it can be fed with silage and pasture and no concentrated fodders are needed, "Troud" wrote at the time, quoting unnamed experts of the Agriculture Ministry.

The shortfall of feed grain is 1.2 million tonnes, the Agriculture Ministry said. State-owned farms need 400,000 tonnes of grain which will be imported. The remainder will have to provide their own animal feed, experts of the Agriculture Ministry told "Demokratsiya". This year's shortfall of bread and feed grain is 1.8 million tonnes, Deputy Agriculture Minister Lyubcho Haralampiev told "Standart News" recently.

[11] CEILING PRICES TO BE INTRODUCED FOR FLOUR, MILK, CHEESE, COOKING OIL

The scheme envisages that the ceiling prices be updated on a monthly basis, Minister of Agriculture Krustyu Trendafilov told a news conference. The aim is to ensure more effective price control and at the same time avoid a shortfall of supply, said Trendafilov.

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