Government adopts national strategy on fight against poverty and social exclusion

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Poverty is a major problem in Bulgaria, and in October 2003 the government a national strategy for the fight against poverty and social exclusion, covering the period 2003-6. The strategy should result in the adoption of an official definition of the 'poverty line' and a National Action Plan containing concrete measures. The strategy was subject to tripartite discussions before adoption, and trade unions have made a number of criticisms.

Bulgaria's economic transformation and restructuring have been accompanied by widespread poverty among large sections of society. This is attributed by many commentators to a lack of political will by all governments during the transition period. The World Bank has carried out three studies of poverty in Bulgaria, in 1995, 1997 and 2001. The studies used two 'relative' poverty lines - one half and two-thirds of the median income/consumption of households - and two 'absolute' poverty lines – incomes of USD 2.15 at purchasing power parity (PPP) per day and USD 4.30 PPP per day, with the latter seen as more appropriate for EU applicant countries. The proportion of the population whose income is below these two absolute poverty lines - see table below - indicate a considerable improvement in the situation after the major economic crisis in 1997, but the problem of poverty still affects many different categories of people.

% of population below the poverty line, 1995-2001
Daily income less than: 1995 1997 2001
USD 2.15 PPP 3.1 21.1 7.9
USD 4.30 PPP 18.2 68.0 31.9

Source: World Bank.

In this context, on 2 October 2003 the government approved a 'national strategy for the fight against poverty and social exclusion', covering the period 2003-6. It will be accompanied by a study on poverty, conducted among 3,715 households across the country. Apart from producing detailed analyses and reports, two main results are expected: the adoption of an official definition of the poverty line; and a National Action Plan comprising concrete measures in accordance with the new strategy.

The national strategy

The general goal of the new national strategy is to reduce poverty and prevent the risk of social exclusion.

The strategy defines the concept of poverty as the lack of funds necessary for meeting basic needs, as well as the lack of the conditions and preconditions for a decent and 'full-value' life as a result of lack of choice. Decent living conditions should allow for a lasting and healthy way of life, possibilities for education, and free and unlimited participation in various social activities. The concept of social exclusion links material deprivation with participation in social life and the exercise of social rights, according to the strategy. Poverty isolates individuals and impedes them from participating actively in public life. This is why poverty and social exclusion go hand in hand. Social exclusion happens when, owing to a number of reasons, individuals and groups do not have access to use the possibilities offered by society and the economy.

The strategy's analyses and evaluation indicate a variety of profiles and differing levels of poverty. The main points are that:

  • poverty is concentrated to a large extent in the rural areas - two-thirds of poor people are in rural households;
  • the risk of poverty for pensioners is double that for employed people;
  • households with many children are a group at high risk of poverty - 60% of two-parent households with three or more children are poor;
  • people from ethnic minorities groups (mainly Romas) make up than 60% of the poor people in the country;
  • more than 80% of people who have not completed secondary education are poor; and
  • households headed by an unemployed person represent 40% of poor people.

Reforms that are currently being carried out in education and healthcare are an additional factor influencing difficulties in obtaining access to these services.

Current government polices to combat poverty and social exclusion include: changes in the taxation system; a differentiated system for targeted social assistance; extending the scope and increasing the financial stability of the pensions system (BG0308101F); active labour market polices leading to employment; action in economically underdeveloped regions; and the drawing up of a national housing strategy. As a whole, over the past two years the government’s social policy has been reoriented towards addressing the causes of poverty instead of passively neutralising its consequences.

The new strategy adopts three basic pillars for the fight against poverty and social exclusion:

  • access to employment and to resources;
  • access to social services; and
  • providing social protection.

The principles laid down for the implementation of the strategy are as follows:

  • the preventive character of the measures- actions will be taken to eliminate the causes of the negative phenomena and processes in society related to poverty and exclusion;
  • sustainability of the results- the effects achieved must be sustainable and have a long-term effect;
  • effectiveness- programmes and measures will be implemented after a needs assessment, their objectives will be coordinated, and their implementation will be monitored and evaluated;
  • efficiency- actions should produce economic results, and an optimum correlation should be sought between expenditure and the results;
  • coherence- policies should be managed so as to ensure internal logic and mutual interrelation between them, and there should be political commitment and responsibility on the part of the institutions involved in the design and the implementation of social policy; and
  • solidarity and partnership- social partners and representatives of civil society and the non-governmental sector should be involved in the process of formulation and implementation of policies to combat poverty and social exclusion.

The strategy has been coordinated with the effort to integrate Bulgarian society with the EU, in the run-up to planned accession in 2007. At the European Council summit meeting in Nice in December 2000, the current EU Member States agreed to develop the priorities of their policies for combating poverty and social exclusion (EU0111101N) in the framework of the following four common objectives:

  1. to facilitate participation in employment and access by all to resources, rights, goods and services;
  2. to prevent the risks of exclusion;
  3. to help the most vulnerable; and
  4. to mobilise all relevant bodies.

Given commitments made by Bulgaria the European Commission and its preparations for EU membership, the new national strategy adopts as its strategic goals the abovementioned four objectives agreed by the current Member States. Within their framework, operational objectives are set and concrete tasks are formulated under each of them, aimed at reaching the goals in the context of Bulgaria's specific conditions.

The basic indicators which will be used to measure achievement of the strategy's general goal of reducing poverty and preventing the risk of social exclusion by the end of 2006 are as follows:

  • a reduction of the unemployment rate from the present 13% to 11.5%;
  • a reduction in the number of people receiving social aid by 100,000;
  • increasing the minimum income by an average of 7% annually until the end of 2006;
  • increasing by 10% state funds for the development of social services; and
  • decreasing by 10% the number of children brought up in specialised institutions.

Social partner views

The strategy approved by the government was discussed on several occasions in the National Council for Tripartite Partnership's Commission on Incomes and Living Standards (BG0307204F). The Confederation of Independent Trade Unions in Bulgaria (CITUB) and Confederation of Labour Podkrepa (Support) insisted that a special section on the 'working poor'– a problem which not only occurs in Bulgaria but is also widely discussed in western European countries (TN0208101S) – should be included in the analytical part of the strategy, along with relevant operational objectives and tasks. Provisions on this point were proposed to the other social partners by CITUB but were not adopted by the government or included in the final version.

The strategy's lack of concrete indicators and measures - in relation to the official poverty line, as well as to the creation of a full system of indicators for ongoing and final evaluation of the strategy’s implementation – has also been a subject of criticism on the part of the two trade union organisations.

The unions insist on the adoption of the 'absolute' poverty line method (ie setting a cash figure) and consider – at least at this stage – the application of 'relative' poverty lines (ie related to a percentage of median income or consumption) that 'represent almost equal relative shares of poor at different levels of incomes (including in the developed countries)' to be inadequate for Bulgarian conditions. Additionally, they argue that 'in Bulgarian conditions the phenomenon considered as a paradox whereby the absolute poverty line is higher than the relative line is a fact - moreover, in crisis periods such as the winter of 1996-7 [the absolute poverty line] is even higher than the median income'. So far, this has not been commented on by the representatives of employers’ organisations. The government prefers the use of a relative poverty line, and this is likely to aggravate disputes in the coming year, when the adoption of an official national poverty threshold is expected.

Commentary

An ambitious anti-poverty policy should rest on objective criteria and methods of estimating the poverty threshold. Naturally, that does not mean that 100% of the poor will be automatically covered by the social assistance network, but in any case what needs to be done is to develop the outlines of a system of measures that can lead to a positive effect in that area. The financial provisions of such a programme are not a minor issue, yet much more needs to be done to introduce some qualitative changes into the system and increase its efficiency. That will lead to more public trust in the 'good intentions' and reveal opportunities for involving the social partners and non-governmental organisations in the fight against poverty – regulations on this issue exist in law but for some reason or other they are not practically applied. (Lyuben Tomev, Institute for Social and Trade Union Research)

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