STATISTICS-BULGARIA-EU

Bulgaria Enters EU with 14% Poverty Rate, 20% Grey Economy,
Official Statistics Show


Sofia, January 29 (BTA) - Alexander Hadjiiski, President of the
National Statistical Institute (NSI), was interviewed by BTA.

Q: What are the main challenges to national statistics ensuing
from Bulgaria's entry into the EU?

A: The number one challenge is quality, which does not imply
that NSI data are inaccurate. A European Statistics Code of
Practice was published in 2005 - a document we are bound to
strictly comply with. In addition to time limits, the document
includes the obligation for statistics to provide analysis. We
are planning to have two units with analytical groups dealing
with demographic and macroeconomic analyses. The time limit for
implementing the Code's requirements is 2012. As to the NSI in
particular, administrative reform is the main challenge.

Q: What do you mean?

A: One of the key problems now is the lack of administrative
registers. For example, the Education Ministry has no database
of the number of school students. That is why our experts at the
territorial subunits have to go round the schools. In addition,
the NSI's current structure - a head office and 28 territorial
offices - results in superfluous administration.

Q: Do you mean there will be downsizing?

A: No. A Phare project envisages creating remote directorates in
the six planning regions, which will replace the territorial
units. The redundant employees will be transferred to the head
office, where there is a staff shortage. This is particularly
relevant in view of our plans to make analyses and maintain an
online database.

Q: Could you give the earliest date when the NSI can implement
administrative reform?

A: We will submit a six-year strategy adjusted to the European
strategy until 2012 to the Council of Ministers by the end of
January. The document includes the timeline of setting up the
remote directorates.

Q: How much financing has been planned for the six-year period
and what is its source?

A: The financing needed is 46 million leva, of which over 20 per
cent will be provided under the Phare Programme, for example,
for the statistical register project.

Q: When will online data provision become possible?

A: The NSI has a regional, predominantly demographic, database.
Other data are being entered and will be released on a thematic
basis, e.g. financial and non-financial statistics.

Q: What is Bulgaria's poverty rate on its entry into the EU?

A: It is 14 per cent according to our data based on the European
method for calculation on the basis of expenses, not of incomes
as is the case with the US method.

Q: What progress has been made in the NSI and Gallup survey for
determining the poverty line according to European standards and
methods?

A: It depends on which of the three European methods is adopted.
This is about the weight of the expenses of the head of the
household, the wife and the children. In Bulgaria it is assumed
that the head of the household makes the largest portion of
expenses, while a child accounts for 0.25 per cent of them, i.e.
most expenses are made by one member of the household. The use
of different models will not cause sizable differences in the
poverty rate - 14.2 per cent or 14.8 per cent, depending on the
model used.

Q: Will there be changes in the large consumer basket?

A: The draft consumer basket will contain 528 commodities in
2007, instead of 531, and 19 commodities will be replaced. For
instance, the 330-ml bottle of de luxe Bulgarian beer is
replaced by a 500-ml bottle; A-92 unleaded petrol is replaced by
A-95; the CD player will be replaced by an mp3 player. The rule
is that replacements are found for little or no longer used
commodities.

In 2008, the NSI will start publishing two inflation indices.
One is national, and the other will be calculated using the same
method but will include products common to the whole of Europe.

Q: Will the time come when Bulgarians will be able to use an
online calculator of their household's inflation over a cup of
coffee? This has recently become possible in Britain.

A: We are looking into this, but we must finish working on the
consumer basket first.

Q: Could you cite the percentage of the grey economy at the time
of Bulgaria's entry into the EU?

A: With the proviso that the grey economy is beyond the scope of
official statistics, I would put it at about 20 per cent,
speaking as an expert, not as a statistician. Mirror studies
based on customs declarations in Bulgaria and another country
show glaring examples of goods worth millions of dollars, which
disappeared after being imported in or exported from Bulgaria.

Q: Where does Bulgaria stand in Europe in terms of the grey
economy?

A: A British colleague statistician once told me that when he
said the grey economy in his country was about 7 or 8 per cent,
he caused an outcry because three million unregistered workers
enter Britain every year. In any case, the proportion of the
grey economy in the European countries is two or three times
smaller than in Bulgaria.

Q: What new observations will the NSI make in 2007?

A: The most interesting ones are of working conditions, the
value of labour power, and social protection. I am talking about
what is known as the poverty umbrella - how many Bulgarians it
covers and how they are covered.
BTA

Source: BTA

CORRUPTION-DISCUSSION

Sofia, January 30 (BTA) - The Interior Ministry and the
Corruption Prevention and Control Commission received 8,500
reports during a large-scale campaign in 2006. Of them, 240
reports were about Interior Ministry employees, Interior
Minister Roumen Petkov said at Tuesday's discussion on
"Monitoring of Anti-Corruption Reform in Bulgaria", organized by
the Center for the Study of Democracy and Vitosha Research with
support from the US Agency for International Development.

Petkov said work had been completed on 100 of the 240 cases
concerning Interior Ministry officers. Forty reports were
confirmed and appropriate measures were taken, and work is under
way on the remainder. The reports concerning employees of other
departments were submitted to the Council of Ministers' chief
inspectorates and the inspectorates of the respective
departments.

Petkov stressed this was the best result achieved in recent
years thanks to the exceptional support of the NGO sector,
employers' organizations and the media.

Petkov said that curbing corruption was turning into a criterion
for every new democracy's maturity. The successful combating of
corruption is a precondition for optimal absorption of EU
funding, needed to step up the new member states' socioeconomic
development, he said.

The introduction of indicators for assessment of the
implementation of the Transparent Governance Strategy and for
corruption prevention and control in 2006-2008 will provide an
objective assessment not just of the corruption situation but of
anti-corruption reform as well. The system of indicators not
only makes it easier to get an adequate assessment of the
government's performance, but also allows to better outline the
parameters of transparent governance, Petkov said. He believes
that the introduction of contemporary standards in
administrative services will restrict corruption pressure.

Vitosha Research cited data on the spread and dynamics of
corruption in Bulgaria's business sector, showing that real
corruption in business-administration relations fell early in
2007. Business representatives still believe that corruption
remains relatively widely spread. However, they perceive that
its level in the administration (predominantly Customs, police
and tax authorities) is falling, while corruption in the
political elite remains unchanged or is growing. Corruption
expectations are sliding down, but businesses remain sceptical
about the government's ability to cope with the problem,
especially in the upper echelons of power.

Judging from experience, the best tool in the fight against
corruption are the local communities working with NGOs, which
can urge political leaders to take responsibility, said the US
Deputy Chief of Mission Alexander Karagiannis. He also said that
now that Bulgaria had joined the EU, it would be subject to
much stricter monitoring. The State should live up to the common
expectations, as well as to its citizens' expectations.

Fighting corruption and increased transparency are of key
importance to Bulgarian and foreign investors, Karagiannis said.
He voiced expectations for the government and the public to
carry on reforms so as to enhance responsibility at all levels
of the public and private sectors.

World companies would like to see transparency and a possibility
to rely on justice and the rule of law, Karagiannis said. He
said there were serious reports on corruption in Bulgaria,
companies complained that they had to pay bribes to get
licences, and the judiciary was ineffective. When such things
are said about economic sectors, ministries and specific places,
potential investors will go to invest elsewhere, according to
the diplomat. BTA
Source: BTA

EP - BULGARIA - ROMANIA - LABOUR MARKET

Brussels, January 25 (BTA) - Bulgarian MEP in the Group of the
European Peoples' Party (EPP) Martin Dimitrov submitted Thursday
in the European Parliament an official question to the European
Commission urging it to influence the member states to open
their labour markets to Bulgarians and Romanians. Dimitrov also
calls on the EC to initiate an information campaign explaining
to citizens the advantages of the free movement of workers,
EPP's press office said.

In reality the opening of the labour markets in some of the old
member states had a positive impact on the economy as a whole,
Dimitrov says.

УI am looking forward to the answer of the European Commission.
The choice of most of the member states to impose restrictions
on the access of Bulgarian and Romanian workers to their labour
markets is unjustified. As the driving force of the single
internal market the EC has to explain to the European citizens
that the Bulgarians and Romanians pose no threat to their jobs
and to stimulate member states to open their labour markets,Ф
Dimitrov says.
BTA

Source: BTA

FVO - BULGARIA - FOOD & VETERINARY CONTROL

Sofia, January 26 (BTA) - A two-week mission of the Food and
Veterinary Office of the European Commission on Bulgaria's
readiness for control of free movement of goods, foods and
materials of animal origin has ended, the Director General of
the National Veterinary Medical Service Zheko Baichev said
Friday. In the course of two weeks the mission inspected the
border veterinary inspection posts (BVIP) at Kapitan Andreevo,
Kalotina, Sofia Airport and the Black Sea ports of Varna and
Bourgas.

In addition to resource provision of the free movement of goods,
the mission checked the readiness of the National Veterinary
Service on control procedures.

At the final meeting with Baichev today the representatives of
the mission said Bulgaria has all guarantees for reliability of
control on the free movement of goods, both between
member-states and from third countries.

Bulgaria does not have approved storehouses for raw materials
and foods of animal origin from third countries, that do not
meet the requirements of the EU and are intended for reexport to
other countries. That is so because no storehouse owners have
expressed the desire to engage in such activity but the National
Veterinary Service has to develop procedures in case some
persons desire such movement of goods and storage facilities to
be approved by the Bulgarian veterinary authorities should be
prepared, Baichev said.

The mission approved of the guidelines for the entire border
control and recommended that details from it be outlined as
instructions to be used by the BVIP authorities./BTA

Source: BTA

BUSINESS CLIMATE - STATISTICS

Sofia, January 26 (BTA) - The aggregate business climate in
January was up 1.3 percentage points on December 2006 thanks to
the favourable business situation in construction, the National
Statistical Institute said, quoting a business survey.

The composite Business Climate in Industry Index remained at the
high levels reached last summer. Compared to December, there is
a slight improvement of the assessment of managers in respect
of the manufacturing activity, reflecting more orders from
abroad. At the same time, security in respect of production for
domestic clients is worsening and the expectations for the
production activity in the coming three months are more
moderate. Moderation also domantes in managers' expectations
about the employment. About one in five managers expect an
increase in prices.

Due to more optimistic assessments of the ongoing business and
expectations about the next six months, the Business Climate in
Construction Index went up 7.3 percentage points in January. The
managers in this sector are optimistic about the coming three
months and expect moew new orders in the next six months. About
one-third of companies in the construction business expect
prices to go up.

The business situation in retail trade and the services sector
remained favourable and the composite Business Climate Index
remained at last month's level. In retail trade, managers are
optimistic about the volume of sales and the expected orders to
suppliers in the next three months. In the services sector,
managers have more moderate expectations. BTA

Source: BTA

NATURA 2000-ALTERNATIVE TOURISM

Sofia, January 30 (BTA) - Natura 2000, the EU-wide conservation
sites network, gives the regions whose areas are included in it
a chance to develop, according to representatives of the
Environment Ministry and tour operators who offer nature
tourism. The meeting organized on the Environment Ministry's
initiative was attended by Deputy Minister Yordan Dardov and
experts of the National Service for Environmental Protection
Directorate.

The tour operators recently sent a letter expressing support for
Natura 2000 to Environment Minister Djevdet Chakurov. On
Tuesday, they stressed that foreigners and Bulgarians were
showing interest in nature tourism. They cited statistics
showing that 15,000 people use this service every year, and
another 15,000 buy combined package tours and go holidaying in
both resorts and natural sites.

Tour operators have noted an increase in the number of nature
tourists in the middle class and the elite. Most of them are
Europeans, and Americans have been coming, too, in recent years.
They spend their holiday hiking, mountain biking, riding,
rafting or kayaking.

A growing number of people visit a country to see a certain
endemic species. Mihaela Yordanova said a German client of her
tour operator company revisited Bulgaria because he could not
see the primrose in Mount Rila in bloom the first time round.
Other foreigners come to see the orchids in the Eastern Rhodope
Mountains.

These tourists are not a minority. In Britain alone there are
about 2 million people who have visited particular countries to
see certain species, said Lyubomir Popyordanov, Chairman of the
Bulgarian Association of Alternative Tourism.

The tour operators also said that nature tourists do not use all
inclusive services and the money they spend goes to the local
people who provide accommodation, local cuisine, arts and
crafts, and tours.

Margarita Kaisheva, owner of a tourist house, cited the latest
figures of BirdLife International, showing that the tourist
season in the wetlands of Prespa, Greece, now lasted all year
long instead of three months as before, and the ecotourism
services offered helped create jobs. BTA

Source: BTA