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18 July 1997

Well I was out of the office again during 8 – 14 June at a training conference for Junior Achievement. It was held at a Black Sea town some 40 Km south of Borgas called Primorsko that you may find on maps that are available to you. It is a resort town with a lot of hotels and restaurants that gets most of its tourists from Russia and former Soviet Block countries. I was asked twice if I was from the Czech Republic. There was a group of young kids with chaperones from St. Petersburg and I met a woman from a town that I never was able to pronounce (it was close to Moscow). The travel effort was similar to what I wrote concerning Gabrovo; to return to Zlatograd I had to stop in Haskovo and stay overnight. There were no connections that would get me home the same day unless I got very lucky with connections and that did not happen. Coming back I traveled by micro-bus, then train, and 2 city buses to Haskovo; the next day it was another train and bus into Zlatograd with long waits between connections. Had good weather at the sea except for one afternoon thunderstorm that was as bad as I have seen anywhere for a long time; wind, lighting, thunder, and rain by the bucket full for a about 30 minutes. The purpose of the conference was to train Bulgarian teachers to teach Junior Achievement in 10-20 High Schools this fall. I was there primarily to talk about my experience as a JA Consultant/Advisor to JA companies for 8 years while working in Phoenix. Here in Bulgaria there have been Peace Corps Volunteers teaching JA for a few years now but Peace Corps Bulgaria is working with the Ministry of Education to get it added to the school program. This year will be the first attempt at having Bulgarian teachers teach the program. Some of them seemed to understand the concepts fine but others don’t have a clue what a free market is all about and will have a tough time teaching it. I hope for the best but have my doubts about the effectiveness these first few years. I did meet a teacher from Sofia that does seem to understand what it is about. More importantly she sent me a post card to keep the meeting alive, so to speak, and we have agreed to meet for dinner in Sofia.

Have managed to get in only a few rides since I got my bike but slowly extending my distances with each ride. Sunday, 1 June, I did an out and back ride to the east for about 34 Km with some 228 meters of climbing; about 150 of the climb on the return leg. At the 10 Km point there is a sharp hill that rises up some 60 meters in about 1 Km; it is just east of Preseka and I think of it as “Pray Sucker Hill”. My one excursion to the west took me to Erma Reka; about 16 Km and a steady climb of over 200 meters. It was 8 Km to the turn off to Erma Reka; if I had continued due west the climbs are MUCH more difficult. I will let you know about them as I try to get out of town to the west. Have been a little over 40 Km, round trip, to the east. It is more up and down with a net climb coming back from the east; total climb of a little over 300 meters. We are heating up here with afternoon storms that are raising the humidity. Last summer was dry, this year has started out much wetter; good for the crops but I do not do well in high humidity. Then the last week of June and the first week of July were very HOT; the most miserable that we have had either last summer and so far this one. It is hard to believe that it can be so damn cold in the winter and then get so hot and humid in the summer. Of course the people from the upper mid-west in the States understand this kind of weather! Discretion on my part, as well as being lazy, lead to only one ride during this time. That and my trips out of town are cutting into riding time but I get some in; the temperatures have dropped back down to something more reasonable again so I hope to get myself up and out this weekend.

I was out of the office 9 – 12 July on a trip to Sofia and Kustendil. If you remember it was Kustendil where I was in Pre Service Training (PST) last year at this time. We had 12 weeks ending at 1730 Monday – Friday; this year they get away with 11 weeks and are out at 1630 every day!!! The new Volunteers I talked to still hate it. I went into Sofia on the 9th and then to the Peace Corps office on the 10th to get my June & July Living Allowance plus reimbursement for travel to Gabrovo in May and Primorsko in June. Those two trips plus my trip into Sofia to get reimbursed cost me over 100,000 Leva when you include the per diem that we are allowed when away from home. The per diem is based on US Dollars per day but is then paid at the current Leva/Dollar exchange rate when you actually get reimbursed. So, I arrive at the PC office bright and early on the morning of the 10th to get paid. WRONG. I can not get paid using the rate of the 9th I must wait until the rate for the 10th is released by the Bulgarian National Bank at 1000; this is the policy as stated by the assistant payroll clerk and the Admin. Officer is not in of course. So I cool my heals for an hour and a half until the new rate is posted. My patience is rewarded and the rate has gone up by 12 Leva to the Dollar; so I receive about 200 Leva more than I would have by using the rate of the 9th. This equates to a little over a Dime – Ten Cents – One Tenth of a Dollar; gives me a very good idea of what my time is worth here in Bulgaria! It would have been even more appropriate if the rate had moved the other way and I could have received less in Leva plus waiting the one and a half hours. I then went to my bike shop in Sofia to try and get a baggage rack for my bike but they had none that would fit. Maybe next trip? Met my Director at the train station and we then traveled together to Kustendil for a presentation to the new Volunteers on the 11th. He talked about the Non Government Organization that I work for and some of the projects that it has been involved with. I then talked about what I have done to help him or things that I have worked on independently and what it is like for a Volunteer to work in a small town. Another Volunteer added his contribution and we filled an hour and a half. So the Director and I traveled for about 17 hours round trip by bus and train to present for one and a half hours!!!! It doesn’t seem time effective does it? But this is Bulgaria and it is the Peace Corps. Had a pleasant dinner with the teacher that I met in Primorsko while in Sofia. Her English is as bad as my Bulgarian so we have a fine time trying to communicate, but it was good to be out on a “date” of sorts – anyway I had fun!

As you may know Bulgaria established a Currency Control Board at the “suggestion” of the International Monetary Fund (IMF) and World Bank. That is to say the IMF & WB said that if Bulgaria wanted to receive loans to help get the country back to a functioning society it would set up a Currency Control Board. Boards have been used in Argentina and Latvia or Lithuania in recent years; Argentina’s is still in operation. What the Board provides is a structure that takes the politics out of the economic operation of the country. It prohibits the printing of more money unless the central bank of the country has central reserves to back the local currency. So on 1 July the Board started operation here with the Leva fixed at 1,000 Leva/German Mark and no more Leva can be introduced into the economy until the central bank reserves increase. This shuts down the inflationary pressures that a country face but it also shuts down imports unless exports are also increased. It will also make it difficult to increase wages without significant increases in productivity. In very simplistic terms what this all means is it will force Bulgaria to become a market economy; and give up the communist central planning that they professed to have given up some 7-8 years ago. Some statistics to put the situation into a context and make it easier for you to picture what we are faced with so far this year. The inflation rate during June was only 0.8% with food prices declining at 1.1% (crops are being harvested), non-food up 2.0% and services up 4.4%. The year to date rate of inflation is 484.2% because of the hyperinflation in January & February. One of the primary factors leading to the decline in inflation since then has been what is commonly described here as the “pauperization of the country’s population”. From Bulgarian Business News:

The majority of Bulgaria’s population may be described a ‘passively poor’. People count on social allowances and on incomes which are not connected with the production sector.

What this means in Zlatograd is the 85+ metric tons of food and medicines that have been donated by our Greek Sister City and another town in Greece. Also a cash donation from the George Soros Foundation to the very poor of Zlatograd that I think is about $50,000. It also means that people here grow most of their own food and preserve all they possibly can to carry them over until the next harvest season. It is estimated that 192,216 Leva is needed every month now to meet essential necessities, however the average monthly wage is 142,535 Leva. In addition, 55% of all Bulgarians are paid less than the average wage and a minimum pension is 27,000 Leva and the maximum pension is at 81,000 Leva. It is little wonder that sales have dropped over 46% this year over the same period last year and the Currency Board will probably make it worse because of the increased cost of imports. The price of bread and other products from wheat is still controlled. Surprise! Surprise! Last year Bulgaria needed to import around 500,000 metric tons of wheat and the projections are for twice that this year. Prior to 1944 Bulgaria was an agricultural society that was capable of feeding its own population and export a surplus. The Soviet Union industrialized Bulgaria, got people off the farm, collectivized those remaining, and now they are incapable of feeding themselves. The same pattern as you see in North Korea now and in China before it liberalized the collectives. The restitution of land here in Bulgaria has been going on now for 7 years and they still don’t have it finished; furthermore, they claim to need some millions of dollars to finish the process. But even if you have had land returned to you it doesn’t mean a whole lot because you don’t have title to it and can not sell it except in very limited circumstances. The privatization of state owned companies has been just as badly handled during this time and continues to be a mess. Again, from Bulgarian Business News.

Bulgarian industrial enterprises lose $500 million annually due to the outdated equipment in state-run enterprises. The average age of technological equipment is 24-26 years.

The privatization process requires bidders to put up massive amounts to upgrade these companies and also to retain the existing employees. This makes bidding on state owned companies a very risky and long term investment to say the least!