Politicians understand the problems, but the battle is with the administration. It is full of people who have never paid wages. They don’t know how the economy works, they have no idea where the money comes from, says the CEO of
“Besco” – the Bulgarian startup association Dobromir Ivanov
– Mr. Ivanov, you met with the parties before the vote. What did they say before the election and what did you hear from them after seeing the results?
– We tried to talk about the vision for our country, where Bulgaria will be in 35-50 years. We tried to get them to understand the responsibility that they as politicians have to have this conversation. To see where we are going and to talk about whether the horizon is more distant, or whether it is about shorter problems, reforms and initiatives.
It gave us the impression that in conversations with us, they can easily unite, have points of contact. There are many things that everyone recognizes and wants to happen. This is our fight for the supra-party goals that exist and that can unite.
But in general they talk much more about red lines, about division, who does not want to work with whom.
After the elections, it is the same in speaking, they rush and immediately start with the red lines. And this is not the statesmanlike attitude we want to see in politicians. Naturally, they must have principles, have an identity, but nevertheless their work is such that, above all, they must think about how the state can be managed and they themselves participate in the management.
And it seems to me that at the moment interpersonal problems are much more in the foreground than responsibility and statesmanship.
– Why is this happening? Why is personality so important in Bulgaria, and not ideas?
– Apparently, we are still at such a stage of development of the democratic society. Bulgaria will be good when the institutions work, not when there are some heroic people. It all comes down to “this one said something to me that I don’t agree with, that one insulted me”. This is a large part of the reality of our politics. It’s all about personal relationships between people who don’t like each other very much. This is the ego.
Such is the picture of our politics and the reasons for having or not having a coalition, for something to fall apart or to be built. And people think it’s some big conspiracy.
Historically, Bulgaria has had moments much more difficult than the current situation. And today it is not even about ideological differences, but rather about personal attacks, which is quite irresponsible.
– You are in the field of business. Axel Rose and Slash from “Guns and Roses” hated each other and couldn’t stand each other. But instead of tearing down, one was motivated to create great compositions and the other to write even more great lyrics. The result is an amazing product. Can our politicians channel their interpersonal dramas like this?
– Even the vote shows that politicians who fail to do this fall out. One of the parties that ended up participating in the last year and a half in political life went from rise to fall. This is perhaps a lesson to everyone else that if they don’t find a way to work with others, they won’t have a long life in politics.
It’s kind of a job, after all. These people have chosen to do this and it is related to results, they must be able to make changes, make concrete decisions.
At the moment, we are in a timelessness that blocks reforms, very important not only for business, but also for the whole country. Too long now.
– Can you name these reforms?
– Three main directions are important for us. Access to capital, access to talent, to the deregulations that actually untie the hands of our businesses to compete freely in the global marketplace. For example, what happens next to the war has huge potential. There is a flow of people, not only from Ukraine, but also from Belarus, from Russia, from Moldova. These are young people, highly qualified, who, if we had well-functioning visa regimes, we could attract. To position the country so that we are a place that they choose. We need them, even today (yesterday – b.r.) data from the NSI on the demography of our country came out again. (See pages 2 and 3).
Access to capital – many times it comes out in the public space that the business wants some money and assistance. Business has two worlds in Bulgaria. One is fed by the state, public procurement, European subsidies, the other fights for customers, to create products and services that the customer wants to buy, that are useful, and this business is often on the world market.
The second type is the one that pulls the country forward. He also pays to a large extent the taxes on light, the high wages, with which an increasingly large part of society can live better. And this business actually needs not government money. We want the police to do their job. Bulgaria to be a competitive place not only with the big countries of the world, but even with our neighbors. For example, for access to capital, we do not ask for financial assistance from the state. We want to have a mechanism to encourage angel investment (a successful individual supports a startup, in the USA, for example, this leads to tax relief in case of investment failure – b.a.).
– We are in Bulgaria, I immediately think of scams.
– There is a way for angel investments to be protected. We create that type of legislation. We generate it ourselves and work with the parties to understand it. However, for this to happen, Bulgaria needs to have a functioning parliament and a functioning government. And these are many reforms related to the acceptance of foreign labor, remote work, and changes in the Commercial Law. Our idea is that, for example, employers can give common tax shares directly, and in exchange for work done and results, you will receive a part of the company. And with such checks, employees can be retained. There are many, many such mechanisms that we have prepared for Bulgaria, but they do not work, they do not exist in the legal world. And these laws have been ready for the second year already.
– I will quote Ronald Reagan: “The state’s view of the economy can be summed up in one phrase: If something moves, tax it, if it keeps moving, regulate it, if it stops moving, subsidize it.” Are there politicians with similar thinking in our country?
– There are both types. The problem is that very often it happens that “The king gives, the king does not give”. At the political level, many times we find an understanding of why these changes need to happen, but in the end reforms do not take place.
And not because two or three stop everything and want to be in a scheme. Reforms do not happen because of the state administration. Every reform needs, in addition to the politicians to stand behind it, it also needs to go through the officials. Only in this way can it reach introduction.
The state administration is full of people who have not been replaced for 20-30 years. That is why we go to election after election. The ministers change, but the directors of the directorates are the same. And they have learned to perfection to create the feeling that they are working, but in reality nothing gets done. These are the people who are ready to destroy any desire for reform. This is very telling in education, but not only.
The battle is with the administration, and it is full of people who have never paid wages. They don’t know how the economy works, they have no idea where the money comes from. They have no idea how Bulgaria can make more money as a country. They don’t understand that. The problem is that they are the vast majority.
The problem is not that politicians don’t get it. The problem is that they have priorities, this is not important to them at the moment, nothing that they say: “I come from business”. From the day they become politicians, they spin in a carousel of cutting ribbons, going to events, debates, participations. In fact, most politicians’ lives are simply going from firefighting to firefighting and they have no time for the dirty work they really need to do. Therefore, such short parliaments can actually accomplish almost nothing, because it is not very easy to do and takes more time.
– You mentioned something very interesting – the officials never paid salaries. As a mantra, we repeat everywhere that in Bulgaria we have a low flat tax of 10%. I look at my salary, it turns out that my employer and I pay a total of 34.9% of the money he gives me as remuneration, before the amount even goes into my bank account. And if I dare to buy something, there is VAT and we get to 47.8% of my salary in taxes, fees, insurance.
– In Bulgaria, insurance is practically a tax. We don’t have our own lots to understand what happens to our insurance money. It is actually a hidden tax. But the most important thing about taxes is that they should be predictable.
The problem is that the service the state provides is so bad. Education is at an extremely low level and you have to pay for it once again privately. It’s the same with health care. So, first of all, it is a matter of getting something of quality for the money we give. And in Bulgaria, there are still huge sectors that are completely gray and black and dark, and nothing is paid there.
– Outside the gray sectors, which of the two mentioned types of business – international and with public procurement – is more important?
– Good business is new, for 10 years, figuratively speaking. But there is hope to erase the other, in practice it is an irreversible process.
– When will it become a fact?
– 2-3 years ago, I had only seen what a pandemic was in a movie. Until a few months ago, I would never have imagined that it would not be in a WWII or Vietnam movie that I would see the footage I am seeing now. So it is very difficult for a person to commit in today’s world with deadlines. The good thing is that in just a few years – 2, 3, 5, most likely not 100,000 or 150,000, but 300,000 Bulgarians will work in these companies. And these are people who receive salaries many times higher than the national average. Accordingly, they begin to feed other industries and become interested in problems other than how they will survive.
– Your words remind me of a phrase by Winston Churchill: “This is not the end.” It’s not even the beginning of the end, but maybe it’s the end of the beginning.”
– Yes, that is a very good expression. I hope he turns out to be the right one.