site.btaPresident: Hundreds of Thousands of Poor Bulgarians Struggle with Basic Needs

111 POLITICS - PRESIDENT - POVERTY amplified

President Says Hundreds of Thousands
of Poor Bulgarians Unable
to Meet Basic Needs


Sofia, October 9 (BTA) - President Rumen Radev said on Tuesday that hundreds of thousands of Bulgarians live in poverty and social exclusion and have been reduced to the humiliating position of being unable to meet their most basic human needs. Radev made the remark while opening a roundtable discussion on inequality and poverty in Bulgaria, held at the Boyana Residence in Sofia with the participation of government officials, employer and trade union organizations, and researchers.

He said the vast majority of those people have worked all their lives or are working at present but are still poor. 

"Thousands of Bulgarian children are deprived of education and proper care 
and are unable to develop their talent - and this is the great tragedy about poverty. The responsibility rests with the grown-ups," Radev said.

He further noted: "Inequality distorts all systems in society. It may be acceptable to a certain extent but inequality in Bulgaria nowadays is far from any average European levels and is so grave that it thwarts all attempts at unification around national development goals. Given the existing financial, economic, social, healthcare and educational models in Bulgaria, unification is an unattainable objective. It is our duty to break the patterns which make inequality and social stratification irreversible.

"Inequality is deeply rooted in social development and is a normal consequence of the differences between the qualities, knowledge, skills, drive and productivity of individuals, but when it acquires excessive proportions, when social and economic systems are inefficient and there are market distortions, when society and the government abdicate their social duties, more and more people find themselves trapped in poverty. Poverty breeds corruption and crime, it means no justice, no work, no education, no healthcare, no security and no chance of living a full life. Above all, poverty robs society of the prospect of dynamic development."

The President raised a number of questions such as: what are the root causes of inequality and poverty in Bulgaria; what is the critical level of inequality and how is it defined; what social and economic models can ensure fair remuneration of labour; how can the national income and its growth be shared out fairly and contribute to social prosperity; and how can we strike a balance
between market competition and welfare.

He said: "At a time when we are talking more and more about stability, GDP growth and record-high GDP levels, the more we talk about these matters, the more we need to discuss poverty and how GDP is shared out, what mechanisms are used to spend public money and how they contribute to the harmonious development of society." Radev is convinced that to neglect poverty and inequality is to show irresponsibility for the future of Bulgarian society.

According to Eurostat data presented during the discussion, the income gap between the richest 20 per cent of Bulgarians and the poorest 20 per cent in 2017 was eightfold, compared with an EU average of 5.2-fold. Over 1.7 million Bulgarians live on incomes of less than 600 leva a month while the monthly cost of living is 585 leva per capita, according to the Confederation of Independent Trade Unions in Bulgaria. Over 2.3 million people in the country live on less than 1,000 leva a month. About 400,000 Bulgarians live on monthly incomes of between 1,000 and 2,000 leva, which, according to the national standards, means they are "middle class," but still, these incomes cannot ensure the kind of economic security which is typical of the middle class. Another 400,000 people go to work but are still poor, with monthly incomes below the poverty line of 321 leva. 

The participants agreed that both income growth and distribution must be taken into consideration when economic policies are drafted, as well as that Bulgaria needs tax optimisation in order to overcome poverty and inequality. 

According to them, a non-taxable minimum income, higher taxes on the highest incomes and differentiated VAT would help reduce inequality. 

Economist Garabed Minasyan noted that the budget capital expenditures planning is not implemented. Parliament voted on a total of 48 billion leva in capital expenditures in 2009, of which 38 billion were spent. If this 10 billion leva difference had been put into long-term investments, this would have resulted in GDP growth of 33-35 per cent, meaning that GDP at the present time would have been higher by one third, the expert explained. 

Prof. Hristina Voucheva noted that the Labour and Social Policy Ministry spends over a billion leva each year on welfare, but nobody is happy with it because it is poorly administered. 

She noted that nine times less is spent to tackle social exclusion in Bulgaria than in the EU.

Asya Goneva of the Confederation of Independent Trade Unions in Bulgaria (CITUB) quoted data, according to which the cost of living has increased by 41.3 per cent between 2007 and 2017, and this growth is expected to reach 45 per cent by mid-2018. Gross income in 2017 reaches 81 per cent of the cost of living. Low-income households spend up to 62 per cent of their income on food and housing costs. According to her, they cannot afford to re-direct money towards education.

Career orientation motivates people to do what they are passionate about, and investing in it is investing in the economy and people's happiness, said the head of the Balkan Institute for Labour and Social Policy, Ivan Neykov. 

According to him, it is precisely career orientation that distinguishes the G-20 countries from the rest, as each one of them has a decades-long history of career orientation. Labour offices in Bulgaria spend around 15 minutes on this, he said. 

Dimiter Ninov of the Bulgarian Pensioners Association said that the World Bank's recommendation to Bulgaria is to have a policy of shared prosperity, which something none of the parties in power are talking about. 

Radev said towards the end of the meeting that it would be better for the budget surplus to be spent following a public debate and approval by Parliament.