[PEN-L:8719] Bulgars, Serbs and privatization

[Louis Proyect <lnp3@xxxxxxxxx>]

The Boston Globe, June 26, 1999

To ensure peace in the Balkans, a new Marshall plan

By Philip Dimitrov (Philip Dimitrov is Bulgaria's ambassador to the United
States.)

The United States and NATO have won the war. Together with the governments
and people of the Balkans, now the peace must be won.

Four wars were fought in this decade on the territory of the former
Yugoslavia. Preventing a fifth conflict will require a multiyear, sustained
effort by the United States and Europe to address not only the immediate
needs of the region - peacekeeping activities and the safe return and
welfare of refugees - but to help the "front line" states of the region
(Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, and Romania)
along a path of sustained democratic and economic development.

Bulgaria understands that it should work for an efficient regional
approach. It is hard to build a prosperous home if you don't work to make
the whole neighborhood prosperous.

Before the war, Slobodan Milosevic told his people that despite years of
war and economic sanctions imposed by the international community,
Yugoslavia was economically no worse off than its neighbors - countries
that were struggling to build free-market economies in the first decade
after the Berlin Wall fell. That was a sad realization.

Now is the opportunity to demonstrate how wrong Milosevic was. Already,
policy makers in Washington, Brussels, and other European capitals are
developing plans to reconstruct the region. Many have called for a new
Marshall Plan that encompasses at least five major elements:

- Continued humanitarian assistance to the hundreds of thousands of
refugees created by the war, who face enormous difficulties in rebuilding
their lives in Kosovo.

- International financial institutions and donor nations should provide
balance-of-payments support to the front-line states, all of whom suffered
interuptions in business, trade, and investment during the war. Some
assistance has already been committed by the United States and the IMF.

- The need for reconstruction of economic infrastructure in the Balkans -
roads, bridges, and railways, particularly along the trans-European
transportation corridors linking Southeastern Europe with the rest of the
continent, as well as electricity links and oil pipelines that can diminish
the difficulties of Albania and Macedonia.

- Of tremendous importance is what Bulgaria's Prime Minister Ivan Kostov
recently stated: "We need not so much the money but rather clear signals
for acceptance and commitment." The European Union and the United States
should move quickly toward the integration of he front-line states into
important Euro-Atlantic institutions, including the EU and NATO. EU leaders
are expected to discuss EU enlargement at their annual summit in December.

- Last but not least, both the US and European governments should create or
enhance incentives for private businesses to venture into the countries of
the region. Without this, the smartest aid plan will be futile.

The nations of southeastern Europe should not idly wait for foreign aid.
The governments of the region are aware of their role and responsibilities
in bringing peace and development to the region - implementing structural
reforms to modernize the agricultural, industrial, and financial sectors,
combating corruption and organized crime, and creating an environment that
will attract Western private-sector investment to offset the negative
effects of the war.

As a country strictly implementing market economy reforms and obeying
currency board rules, the success story of the region for the past two
years, Bulgaria can bear witness that these requirements are not a burden
but a guarantee for successful development.

Preliminary estimates of direct losses from the war in neighboring
Yugoslavia are $100 million to date, with long-term and indirect losses
expected to reach half a billion.

HOWEVER, BULGARIA'S ECONOMIC FOUNDATIONS ARE SOUND, AND WE REMAIN COMMITTED
TO A MULTIYEAR REFORM PROGRAM THAT HAS ALREADY DEMONSTRATED POSITIVE
RESULTS: 3.5 PERCENT GROWTH IN 1998 AND 1 PERCENT ANNUAL INFLATION, A
BUDGET SURPLUS, GROWING INTERNATIONAL RESERVES, AND WESTERN INTEREST IN OUR
PRIVATIZATION CAMPAIGN.

What is important to us and our Balkan neighbors is to maintain the
political will to implement tough economic reforms. A country can import
technology, capital, and even know-how, but it cannot import political
will. Therefore, integrating the front-line states with the rest of the
Euro-Atlantic community is especially important. Permitting Bulgaria and
other states to join NATO and the EU as soon as possible is more than a
symbolic gesture. It will promote future economic and social development
for that part of Europe left behind when, in the aftermath of World War II,
the continent was divided, leaving southeastern Europe behind the Iron
Curtain.

We have learned through many years of conflict and instability in
southeastern Europe that peace is more than the mere absence of war. Peace
implies economic growth and improving living standards. It implies building
democratic institutions and pluralism and tolerance of ethnic and religious
minorities. Bulgaria has already proved during the past decade that all
these are achievable in a Balkan country. But peace also implies
integration into a larger community of nations.

As an air campaign won the war in Yugoslavia, US and European leadership
"on the ground" will be required to win the peace.

© 1999, LEXIS®-NEXIS®, a division of Reed Elsevier Inc. All Rights Reserved.

====

Financial Times (London) , May 28, 1999

Bulgaria to sell state steelworks for $1

By Theodor Troev in Sofia and Kerin Hope in Athens

Bulgaria has agreed to sell the state-controlled Kremikovtsi steelworks,
one of the country's biggest industrial concerns, to a local metals trading
company for $ 1 in an attempt to meet a PRIVATISATION DEADLINE agreed with
the International Monetary Fund.

KREMIKOVTSI IS AMONG A GROUP OF ABOUT 20 LOSS-MAKING STATE ENTERPRISES DUE
TO BE SOLD OR PLACED IN LIQUIDATION BY JUNE 30. THE GOVERNMENT IS ANXIOUS
TO KEEP THE PRIVATISATION TIMETABLE ON TRACK TO AVERT A COLLAPSE OF
INVESTOR CONFIDENCE IN BULGARIA.

The war in neighbouring Yugoslavia is damaging Bulgaria's economy. The
government has cut its forecast for economic growth this year from 4.5 to
just over 2 per cent, amid weakening prospects for increased foreign
investment.

Daru Metals, a Bulgarian company, offered to take over $ 200m of debts owed
by Kremikovtsi to the Bulgarian government and an Austrian bank. It plans
to set up a joint venture with Marcagaglia, an Italian steelmaker, which
would participate in a $ 450m programme to modernise Kremikovtsi's plant
near Sofia and would take over management.

Valentin Zachariev, executive director, said Daru had been Kremikovtsi's
main customer for several years. Daru supplied raw materials and fuel for
the plant and sold most of its output, mainly in European and Asian markets.

The Erdemir group, a fast-growing Turkish steelmaker that was the only
other bidder, pledged to invest $ 300m in modernising Kremikovtsi but said
it would take over only $ 100m of debts.

Analysts said that although Kremikovtsi had been hit hard by the sharp
decline in world steel prices, it had kept operating with the help of
favourable treatment from the government.

© 1999, LEXIS®-NEXIS®, a division of Reed Elsevier Inc. All Rights Reserved.



Louis Proyect

(http://www.panix.com/~lnp3/marxism.html)