2012-06-26 11:00:00

Speech by President Rosen Plevneliev to conference, ‘Preconditions and prospects for sustainable economic growth in Bulgaria and Europe’

Dear teachers,
Dear students,
Ladies and Gentlemen,
Dear representatives of the European Commission,

Today's theme is growth, but what kind of growth? I do not believe in growth which can be achieved overnight. I disagree with growth that is at the expense of new mountains of debt to be paid by the next generation. I do not approve of growth pumped up with quick cash loans. I am not impressed by billions and politicians who believe that growth is produced by pouring billions into unreformed and inefficient sectors.

I believe in sustainable growth, based on reforms towards competitiveness, productivity, a better business environment and good positioning in the global supply chain. I believe that to be financially disciplined is important, but insufficient to grow. I am convinced that the foundation of good development is good planning and good policies.

The theme of growth involves everyone today, but European politicians will not produce growth by constantly repeating the magic word growth and postponing important structural reforms. It is important to fill the word growth with substance.

That is why I am extremely grateful that we are here together today for a candid dialogue, because we owe decisions to the nation, but also owe the young people candor about the problems, what are the solutions. Along with the academic community, together with NGOs who are here today with us, we want this conference to be a generator of ideas and debate about what are the main priorities, which are the solutions, what is the long-term vision for growth.

Of course, we know that reforms are needed, we know that we must have priorities, must focus, but at the same time must synchronize the actions of many institutions, including all the major players in economic development, to reach the goal. How to help growth?

Above all, through co-operation. Yes, we must produce quality people able not just to fight for jobs, but to create jobs. Yes, we must have co-operation between business and state universities, between institutions, between the state and between businesses.

Of course, we must engage in the most powerful way the private sector, NGOs, academia, because national sustainable growth is achieved only when there is full legitimacy of priorities and many years of consistent effort regarding them.

We can help growth through proper planning, especially proper long-term planning. Yes, we need a vision, we need a plan. We know that it will not happen overnight. But we know that ad hoc work by each successive government, which overthrows the previous efforts, replacing, changing priorities, also will not happen. But what will happen is that we have strong legitimate national, long-term priorities and work on them, whoever is in power. And, of course, to have growth, we must be in sync with where the world is going, with where Europe is going.

And that is why I am so grateful to our partners from the European Commission, which will keep us in touch with the trends in Europe. At the same time, I am grateful to the young people who have come into the Presidential institution. We have a new unit called "Strategic Analysis and Forecasts" and the young people in this unit have within a few months managed to position themselves on the path of European ideas, and now work together with leading European and world institutions such as Oxford Analytica, German Institute for Science and Policy, which advises Chancellor Merkel and the Analysis Unit of the Committee of Regions and several NGOs. Thanks to those young people who within just a few months have built real networks of co-operation, so that Bulgaria could benefit.

Thereafter, of course, we will take decisions, because it is high time for politicians to be slightly more upfront and in Europe to say that in fact if the problems are national, the solutions should also be national. And these solutions are different for different countries. It is good to produce a 130 billion euro pact and the pact will deal with growth. Have so far politicians not been working for growth? If a politician is elected and does not work for growth, he will very briskly have to resign. Do politicians in Europe ever not endeavour for economic development? No, they worked towards that, but the environment is different. It is very difficult, and this is not only the worst crisis since World War 2, but also the most unpredictable. There is every aspect - political, economic, financial, and it is not clear yet what the debt will be.

So we are obliged to be honest and candid about the crisis and growth. Because if you now take some 55 billion in Europe, and pour in this 130 billion, which within a few days will be debated in Brussels, again in regard to growth. Well, this is 55 billion from the Cohesion Fund, the European Regional Development Fund. So how could these funds not have been for growth?

From this perspective, I am convinced that Bulgaria has a lot to say, but to be strong, of course, it is essential to have a nationwide perspective, the position of youth, of NGOs. There are no easy solutions, but solutions certainly must be based on the honest positions of political leaders, and perhaps the present generation must understand that in order to give a chance to the next generation in Europe, not to speak about Bulgaria, but about many other countries, it should go into another mode.

So surely the solutions are, first, to observe good practice. Education, investments in education are always a factor for growth and are always a good investment. Support for SMEs is always a good investment. And, of course, the establishment of functioning institutions as a platform for business to grow is always a good investment. Therefore, just a few words about these ideas, I am absolutely convinced that these are just some of the ideas that will arise from this debate.

Investments in education are a classic form of investment, but the world is changing and in the 21st century we need not just only well educated and trained young people, we also need young people with practical skills. They must be able to put into practice very quickly what they have learnt. So we have held lengthy discussions, and I am convinced that the new “Bulgaria 2020” development programme will address this topic, and also how to create a closer link between education, science, the needs of the real economy.

And, of course, apart from the fact that we need good quality education and skills, we need to tailor to the trends of the 21st century, which are that people learn throughout life, simply because the world is developing very fast, and technology even faster. Further, every 10 years we will have a revolutionary change in technology, which means that you must constantly learn about and adapt to these changes. So we count on our universities and they certainly must address this issue very strongly - young people with the awareness, opportunity and ability to adapt rapidly to a rapidly changing world.

An entrepreneurial culture is very important. We know that Bulgaria has already raised the bar higher. We talk about innovation ecosystems, “Sofia Tech Park” is one of them, but sure “Agro Tech Park” and “Logi Tech Park” will follow, as will others. Of course, there will be many debates on this topic. The entrepreneurial culture in Bulgarian universities now has a place and is a priority. Many business people are coming, but hopefully so will more. There is nothing wrong in business people coming to young people to tell their own story, their own failures, all of which we can learn from and become wiser, but also about the success they have achieved.

Without doubt there is a need for more business people in universities, more global educators. Our universities are open, they have the ambition for not only world-leading foreign teachers to come here, but also our teachers are of a very high standard, they could give lectures in many universities. Incidentally, at my meetings in the past few days at the United Nations, it was clear that the reputation of Bulgarian education is high and it is not just restricted to people of the past - the vision of our universities is to be regional, but also global players. In signing agreements with other countries, Bulgaria is working in this direction.

And, of course, outside the education system, a few words on small and medium enterprises. We all know the facts - they make up more than 99 per cent of our economy. The most recent census of companies in Bulgaria showed that more than 99 per cent of companies are SMEs. More than two-thirds of jobs are in small and medium enterprises. It is absolutely an illusion, as President Obama said in his campaign, that rich people create jobs. Jobs are created in SMEs. And support for SMEs is always a factor for growth and economic development. In this regard, Bulgaria has launched a massive program and there are good examples in the Human Resources operational programme. I really hope that by the end of the year the Investment Promotion Act will make the agency more dynamic in fighting for the investments in this part of Europe, which it is said are drying up, and will focus on small and medium enterprises.

The truth is that some states, for example the Czech Republic, have done fantastic things by fighting for large strategic investors, large factories, which sometimes swiftly move from one state to another. But they have done everything they can for SMEs from Germany, Austria, to relocate to the Czech Republic, reaping the outcome of a policy given that SMEs are more conservative, closer to people, and in many ways much more responsible. I would like to dwell on this topic, specifically, how to support the development of SMEs in Bulgaria. Surely there are many solutions that we shall hear today.

And my dream, if I may share it with you, is to have economic development in our country, which, besides being based on the rise of small and medium enterprises, to say nothing of largely on small and medium enterprises, would be innovative, export-oriented. When they are export-oriented, this means that the world wants to buy "Made in Bulgaria", and that is wonderful. And when they are innovative, it means that they have taken the route of being value-added. This will mean higher wages, which is in the interest of the prosperity of the nation. We will earn more.

Of course, we want to address the topic of a state vision. That state vision is a platform for regional balanced economic development, and all that in favour of some long-proven simple but well-functioning instrument of economic development of regions, even the nation as a whole. These are technology parks, industrial zones, Bulgaria has had them, will have them. I hope and especially emphasise the municipalities. They have received money and they are working on their integrated development plans. Hopefully there will be industrial areas in the integrated development plans of 36 large urban areas. It is quite possible to install the infrastructure. Instead of having weed-infested plots, which we think are very expensive, it requires very little effort and not much money to include them in the vision, and then, why not, in concrete actions towards the establishment of industrial zones.

And, of course, working institutions and e-government are a big topic. The state has obligations to business, to citizens. There can be no economic growth without a well-functioning institutions and I strongly believe that if state administrative reform is prioritized in line and in combination with e-government, we will soon see a much more effective administration, more transparent and organized in the interest of the economy and people.

Putting services on to an electronic basis is a very strong stimulus. There are a total of 2100 services that government provides, of which more than 1900 are at central level and 200 at municipal level. In addition to e-government, there must be an electronic community, but also for me it is very important that in going over the cyber services, we shall finally have debates in every directorate and in every municipality. How do we issue this permission? How do we stamp that license? In the course of these debates, making these services electronic will certainly make them more effective.

I welcome this dialogue and this process and I hope very soon to see it in the ministries. Each directorate of the ministry, through having cyber services and the introduction of e-government, should optimize its processes. It was so at the Ministry of Regional Development, as an example, in my first two months as a minister. When I went into the issue of delayed EU funds, I found that 46 signatures are required to pay a lev to a municipality. Six months passed, to convince the administration that they must optimize their processes. But at the end of 2009 the miracle happened, instead of 36 signatures, 12 were needed, a fourfold reduction. Everyone one can see where the Regional Development Operational Programme has reached - we have sped up the payments by 60 to 80 times from what it was until mid 2010. It's certainly not perfect, but it certainly has been a step forward.

While many countries at the moment really are looking for growth, there are many simple, basic solutions, solutions that work very well. When there are charges of clientelism, make the councils public, to make it absolutely clear how laws are made. When there are charges of dysfunctional administration, carry out administrative reform with e-Government. When there are accusations of a lack of productivity and competitiveness, that it is difficult to make reforms in Bulgaria ... Some very well-designed reforms have been carried out and now I want to tell you that I have very strong confidence when I go elsewhere in Europe and the world. Because the truth is that the times provide opportunities. And now some countries get chances, Bulgaria has received a great chance. It depends on us to use it in the best way and to position ourselves in the 21st century, at a time of a very difficult crisis for us, and open huge opportunities for the next generation of Bulgarians.

So, of course, above all I rely on all of you, and at the same time you count on me. The ideas that will be born today, the decisions, will surely be an “arsenal” in the presidential institution. Hopefully together we shall succeed on the road to development and growth.

Thank you.