In an interview for the Danish organization Democracy in Europe Vladimir Mitev tells about the social price of Bulgarian contemporary capitalism
On 12 January 2022 The Bridge of Friendship’s founder Vladimir Mitev participated in an online event of the Danish organization Democracy in Europe, which deals with political education. He was asked to give in advance an interview about the social situation and problems in Bulgaria. The interview’s transcript and video is published below.
Zlatko Jovanovic: I’m very happy that today for our online event in Denmark on January 12, 2022 we in the Danish NGO, working for the democracy in Europe have a possibility to invite you, Vladimir Mitev from Bulgaria, to give a short interview on some social issues in your country. So welcome and thank you for being with us!
Thank you for the invitation.
Yes. So I’ll jump in the questions that we prepared. And so I want to ask you to tell us very shortly a little bit about your city, the place that you are joining us from – Rousse, a city on the southern bank of the Danube river at the border with Romania. Can you tell us a few words about your city? Just a few things about it, which you mean should be important for our viewers to know.
Rousse is a city which was established in the first century after Christ, so it has a lot of history. It has had ups and downs and in the most recent period related to the establishment of the modern Bulgarian state, it was one of the important cities in Bulgaria. Currently, it is the fifth largest one with a population of around 140000 people. It has certain foreign investments. It has a university, an airport for civil flights is on the way to be opened. And there are a lot of things to be said. But the U.S. is also a cultural city, and maybe the audience may know the person of Elias Canetti, who is a Nobel laureate of literature, who was born in Rousse and he’s always referred to his origins from the city of Rousse.
Thank you very much for this brilliant, short introduction. And now as agreed, I will have some questions about the living standard in your city and in Bulgaria as well. Can you tell us a little bit about the living standard? Like, for instance, what is the average salary in Bulgaria and how is the situation with the people after they retire? What are their pensions and how does this situation with salaries and pensions compare to the cost of living? Is there widespread poverty in the country or is it something that is not that common?
Bulgaria has been known for years for lagging behind in social indicators, being one of the poorest EU members in this sense. To get a certain idea, I need to say that the average salary in Bulgaria is more than 750 euro. However, this is due to the fact that there are some sectors of the economy which get high salaries, but in fact, the inequality of income is too high. Bulgaria is the country with the highest Gini coefficient in the EU.
In fact, if we take the median salary, which is the salary of the middle man in society, the last time it was calculated in 2018, the medium salary was 50 percent higher than the median loved one. Also importantly in 2019, the last data I am aware of 90 percent of the income in Bulgaria was below 900 euro. So these are some signs that some people may be living really very well in Bulgaria, but a large number of the people struggle, and maybe we could discuss their issues further. With regard to pensioners, the retired people, it is important to say that efforts are being made to raise the pensions, but in fact, half of the pensioneers – which means around one million people, receive the minimum pension, which, as far as I know from the beginning of this year, is raised to a sum equal to 185 euro per month. And to put into context, the poverty line in Bulgaria is 205 euro at the beginning of this year. So in fact, these people officially are below the poverty line. I said that efforts are being made for the raise of pensions. And in fact, there is also inequality with regard to pensions. So some people can get a pension of up to 750 euro and the medium pension is in fact around a little bit below €300.
As you can imagine, there are issues right now, especially with the prices of energy given that we are in the winter and there is a category of people called energy poor people. So these are people who struggle to get warm in their apartments or houses, and the number of these people is calculated to be somewhere around one third of the people, possibly one a little bit higher.
That’s a very huge number, and in that way, you already partly answered the next question, which is related to the fact that there is a large underclass in the country and the middle class is actually not that big. Mentioning this thing about the people not being able to pay the energy consumption, the prices are very high compared to what they earn. I also think it is interesting for us to know a little bit about the question of apartment ownership.
What is the situation in terms of apartment ownership? Do people most commonly own the places they live in? Or is it something they rent? And how is that compared to the salaries? And maybe also in continuation of that? You can also tell us a little bit about the people who are living in the countryside and the land ownership. How is the distribution in the country especially compared to the situation before during the communist time? Who are the people who gained the land after the privatization processes?
I thank you for referring to the socialist times, because they’re important as points of reference for putting things into context. During socialism there was, as our viewers know, state planning of the economy and state control over plenty of what was going on. But in fact, it also allowed for the planning of various industrial projects. And in fact, people could have lived also in small cities or small towns or villages. They had what to do there. And also, the problem with the housing problem was pretty much resolved.
In fact, because of this heritage of socialism, if somebody looks at the stats of Eurostat, he may see that a large amount of people seem to be owners of apartments. However, that is a little bit distorted in the sense that the fact that people live in their own apartments doesn’t mean that they are the owners. In fact, often young people are living in the housing of their parents, and it is difficult to buy a new apartment if you don’t have the income of the middle class. It is related to going into debts. And in my view, that is a huge issue for Bulgaria because in the new times (I said that there was planning and socialism, there was development in various places in Bulgaria), but in the new times, a lot of the development in the country in the sense of work was destroyed. Industry was destroyed. And if some young person wanted to become something or to do something meaningful, he/she had to move to bigger cities, especially to Sofia. That leads in itself to problems with housing. Rents in Sofia are very high. And that creates economical problems. People are not economically so independent, and to have a family of your own is difficult. It’s especially difficult to have kids. They are costly, let’s say.
So these are huge issues, which to a great extent right now are left to the markets. Simply, those people who have money can resolve those problems. There are people who have, let’s say, six apartments, 10 apartments and give them to rent and they have a fortune. But the number of people who don’t have this accumulation of capital from before or don’t have the good contacts in Sofia, they are in a way exploited by constantly being under rent.
So just to finish the issue with housing, as we know there is a housing movement in Europe, which had even huge success in Germany recently. Bulgaria is famous for having difficulties in grassroots movements. People were simply not having the time or the energy or the will to organize certain organizations, certain pressure groups, et cetera. So housing is a big issue, but we don’t have a member in the European organization of the housing movements. My guess is that this issue will be getting ever greater. I hope we could maybe take examples from other countries, even if not from our neighbors. For example, in Romania. There is a strong housing movement with regards to land ownership. Also, that is an issue that a lot of people recovered their land after the so-called restitution, I think is the word in English. In socialism land was merged into certain state-controlled cooperatives.
After the return to capitalism in the 90s, there was this slogan that the land be returned to its original owners or their inheritors, so people got their land. But eventually, many of them in these hardships of transitions used to sell their land assets and to get some money for their children to study abroad, to buy an apartment in the big city. So as a result of this process, and also combined with the fact that many people left the villages, so villages are in a strong crisis in Bulgaria, a number of people, a very limited number of people, owns a large amount of the arable land. That is quite an industry, because as we know, the European Union provides subsidies to those people who grow certain crops and those people who have a lot of land respectively become very rich. However, given that it is industrial production of crops – grain or sunflower, there is simply no need for workers so much in villages. Basically capitalism leads to the death of villages, if I may say. And that is another issue. If somebody in our government or among the elites is aware of this problem, I guess some solutions have to be found.
Excellent, thank you very much for that, and as agreed, now we will proceed to some questions from the audience. And thanks a lot for doing this.
I’m open for questions.
Photo: The presence of such cars on the streets of Bulgarian cities hints at great social inequality (source: Pixabay, CC0)