Bulgaria’s Moment: Let`s Bring Prosperity to the Next Generation in Our Country

The opinion paper was sent to the Council of Ministries, the Prime Minister, the Deputy Prime-Minister in charge of the NRRP, the Presidency, the National Assembly as well as other relevant institutions.

One of the most important processes after Bulgaria joined the EU – the development and implementation of the Bulgarian plan under the Recovery and Resilience Facility after the coronavirus, was announced a few days ago. After months of lack of information, lack of transparency, and public dialogue, the plan was presented well in terms of visual effect, but in terms of content - it left a lot of unclear aspects and a number of missed opportunities. These are the aspects that determine how the 12 billion leva direct investment from the EU will be utilized in our country in the next 6 years. Will Bulgaria make use of the opportunity to carry out the delayed green restart – the transition from a resource-intensive and carbon-intensive economy to an economy of value, based on knowledge and leading to the recovery of the human – nature balance. “The Next Generation EU” can be our chance for implementing long-delayed reforms and a real change of the economy, society, and the future of everyone in Bulgaria.

The Details

The presentation of the plan strictly follows the mechanism of its development – without announcing the start to the stakeholders, without transparency in the preliminary processes and setting objectives, and with a short announcement on the Council of Ministers` website in 5 to12 before the event. This is the same model used for the setting up of the Green Deal Council at the Council of Ministers and the same way this body, responsible for the development of the plan, has been working for more than half a year.

The invitation for participation in the public dialog, including critical comments, made by the deputy prime minister Tomislav Donchev, gives hope for changing the model. But this is only for a short while until the way public consultation is carried out becomes clear.  Apart from the announcement of 30-days of the public hearing, there is currently no other mechanism, at least a publicly available one, there are no criteria for the assessment of proposals, no clarity as to who would assess ideas and the expertise of a potential committee for selection and assessment. There is no clarity on how the position papers and recommendations of stakeholders will be integrated into the Plan and how the requirements of the European regulations will be met for the inclusion of various proposals in the final version of the document.

Announcing details and including all stakeholders are key for the implementation of the plan, processes which are not secured through the current official public hearing procedure, and collection of proposals, as well as through the lack of specifics of key elements in the plan. This is despite the fact that the plan includes showy phrases, following strictly the European language.

The Plan

The Bulgarian Recovery plan presented by the government has no clear national vision for mitigating the consequences of the pandemics through the development of conditions for the next generation Bulgaria – green, sustainable, digital, and just. Formally these definitions are included in the draft – through its four sections – “Innovative Bulgaria”, “Green Bulgaria”, “Connected Bulgaria” and “Just Bulgaria”. However, a large part of the proposed reforms and their justification are national strategies and plans practically developed before the crisis, or falling within the EU funds framework, with no ambition for something more or different.

There is no central vision and a motive for turning the Covid crisis into a chance for people and the economy. There is no focus on coping with the causes for other clear and heavy crises, such as the climate change crisis, which would help mitigate the impact of the current pandemics. An approach, which is completely missing in the proposed document, but is in the center of the European dialogue, in which Bulgaria simply does not take part.

Sadly, the climate change crisis is not even mentioned in the presentation of the plan as an objective to be overcome, despite the bare declaration that the priorities of the UN Sustainable Development Goals will be followed, and from there – the framework of the National Development Programme 2030. Climate change is a term, cited as a justification for spending almost 4 billion leva under two infrastructure lines of action and nothing more. Besides, key aspects like decarbonization, circular economy, biodiversity protection and restoration, and sustainable agriculture are neglected without justification – with modest allocations from the facility, without a detailed budget and/or with objectives, limited to administrative functions. At the expense of focusing on infrastructure. Infrastructure without content, however, leads to the type of development linked not to the next but to the previous generation.

Reading the 60-page plan leaves the impression that projects, mainly planned for the new programming period Operational Programmes (2021 – 2027), have been directed at the last moment to “Next Generation EU”. Part of these projects are good and the country needs them, but it is not clear why they should be funded through an emergency funding instrument such as “Next Generation EU”, and not through the structural funds. It is not clear how and why they will help the building of the next generation Bulgaria if they are supported by the facility as a matter of priority, and not wait “another month” to be approved under an operational program. It Is not clear what are the proposed 100 projects, as well as whether or not they fit into the European and global framework, and who are they targeting in the Bulgarian context. Let’s note that during the presentation of the plan, Mr. Donchev emphasized that “Next Generation EU” are not just some new money to be added to the operational programs, which we need to absorb, however, the framework of the plan leads, unfortunately, to the opposite conclusions.

Green development and energy refurbishment for everybody

An exceptionally heavy focus in the Green Bulgaria section is placed on the energy refurbishment – remediation of the buildings, which is one of the seven priorities recommended by the European Commission for the development of the national plans.  But this is just one priority. The “acceleration” objective for example – “a priority approach for turning to future clean technology and accelerating development and use of renewable energy sources” is completely missing. This is, the priority leading to the creation of many new and sustainable jobs and business models and which should be a major goal for the plan is missing.

From almost 4,5 billion leva for Green Bulgaria, 3,5 are allocated for infrastructure through the 3 billion for refurbishment and 500 million for a digital system in the Electricity System Operator (ESO). These costs are declared as a circular economy, but in practice – do not support the systematic transition of practices, activities, and production processes, which is necessary for a view of the sustainable recovery after the coronavirus and raising competitiveness. It is exactly this process that needs to lead to a real transformation and reform in a number of sectors, which means new economic activities, breaking the monopolistic structures, and leading to modern and sustainable business models and new green jobs. Empowering citizens for taking an active role in the energy system, which would bring us more security, independence, and democracy, is not mentioned at all. The term “green jobs” is also not mentioned in the presented documents, which clearly shows a deficit of realizing the direction of governmental thinking for achieving the European and global objectives, to which Bulgaria has clearly confirmed adherence.

The Green Restart Coalition is not against energy refurbishment, as long as it does meet the European legislation and goals, but the model at the moment is in the opposite direction. We do not oppose the establishment of “smart” energy networks, but we want to remind that the government needs to observe compliance with agreements in terms of their modernization and allocated investments in this area, which does not happen in practice. The 500 million leva allocated for the digital transformation of the ESO, are probably necessary, but do not meet the European objectives for recovery after the pandemics and will probably not be accepted as an anti-crisis measure, but as unregulated state aid. In addition, the allocated funds are for the management of the network. There are no allocations for modernization and change of the structure, which envisages the future of the energy sector, based not on big singular monopolistic energy producers, but on small numerous decentralized production units. Again, an example of the incompatibility of Bulgarian plans with European objectives.

In addition, the Recovery plan does not show how Bulgaria manages the biggest problem in the country – energy-poor people (a term without a proper definition in the Bulgarian legislation), who mostly rely on solid fuels, an indicator placing Bulgaria in the worst position in the EU.

What is more, energy efficiency does not mean only insulation of buildings – technology can already give various solutions for how our households, businesses, and communities contribute to energy production, as long as the necessary prerequisites such as favorable investment and regulatory environment are in place. In addition, it is necessary to pay attention to energy refurbishment as an overall process including monitoring of results and the introduction of sanctions for the cases when the objectives set at a project level do not get achieved.

In contrast to the enormous budget for energy refurbishment, the good and necessary idea for the creation of a Decarbonisation Fund is left without financial framework and details, only mentioning the opportunity for funding by the “Next Generation EU”.  This objective also does not cover problematic and systemic directions in the energy sector as the transformation and restructuring of coal mining. There is no mention of the other energy aspects and solutions in the sector, which are within the scope and target of European objectives such as RES and development of innovative models and solutions in the sector, for example, hydrogen.

Pouring money for the refurbishment of buildings without structural “renovation and reforms” would hardly lead to a bigger impact on reducing carbon emissions than was the impact of the National Refurbishment Programme. Again, evidence for lack of vision and understanding of global tendencies and European objectives.

Key elements of “Green Bulgaria”, as biodiversity and digital transformation of agriculture, are also left without a vision and sufficient funding. With the exception of the pompous title and the large percentage of funds, it is clear that the intentions are quite different. Despite the fact that the document mentions the difficult situation in these areas, no protection mechanisms of flora and fauna, based on digital solutions are proposed or educational mechanisms for the practices and ways of transition to competitive digital agriculture, friendly to our unique biodiversity. What is more, the plan proposes a wrong approach for management and ecosystem-based solutions for protected areas only, whereas it should actually be a model for management and planning of all human activities on the whole territory of the country.

Green Economy and digital transformation

The “Innovative Bulgaria” program is not sufficiently developed in terms of objectives and scope, especially the part directed to the introduction of the circular economy practices in enterprises. This measure has to be in the “Green Bulgaria” program and should be a significant part of the plan, in contrast to energy refurbishment. Because it is exactly this measure that gives the mechanism for a circular restart in the industry.

The ”Intelligent industry” section of “Innovative Bulgaria” acknowledges problems, but does not offer key solutions, because the main budget item from almost half a billion leva in this part is directed towards the infrastructure of industrial parks. Thus, no focus is placed on knowledge and the use of the innovative potential of the country as a way out of the crisis. Supporting innovative enterprises can create the conditions for changing the image of the Bulgarian industry and to extend the economic borders of Bulgaria – a key aspect of reaching sustainable economic development. A long term and systematic approach is missing: The plan can set the beginning of its, delayed implementation, through analysis of the innovation potential of the country by regions; targeted support on the basis of this analysis; setting up policies targeting start-up innovation companies; introducing result-oriented measures for using the available scientific infrastructure; introduction of models for green funding, including through the creation of a specific program within the Fund of Funds.

We have to note the presence of several good ideas in the “Innovative Bulgaria” section. The program for accelerating economic recovery and transformation through science and innovations with the proposed three pillars is undoubtedly a necessary measure in the plan. The proposed third pillar of the program leaves an especially good impression – the support for the process of creation of digital innovation hubs on a regional basis, including funding for start-up and small and medium-sized innovative enterprises. This item can be extended for the needs of the economy of the future at the expense of building industrial parks – a process which can be funded from the operational programs, and not from an emergency facility.

This comment also refers to other parts of the plan. For example, equipment for STEM school rooms, the building of youth centers for physical meetings and training events, as well as a renovation of school buildings, kinder gardens, and university campuses are undoubtedly necessary measures. But, as the document itself admits, these proposals will actually finish a process under the operational programs – educational establishments that have not been renovated within the structural funds will be covered here.

One of the priorities of the European Commission for the “Next Generation EU” – retraining and raising qualifications is practically not covered by the plan. This is a key priority as it includes “adapting educational systems to support digital skills, education and professional training for all ages”.

Is there no need of developing special digital-based school programs and interactive training events/practices for the working environment of the future – automation? Or digital lessons on green entrepreneurship in professional high schools with an interactive presentation of last global trends, so that students can be ready for the green and blue economy? Aren’t similar programs preparing students better for managing the consequences of the coronavirus and do they not need emergency and priority funding?

And not only. The government admits in the plan, that 10% of students have practically fallen out of on-line education during the lockdowns in the spring because they did not have a device or internet access. Coping with this challenge is the task of the Recovery Facility because students dropping school in this important moment of transition will create structural defects in the future through marginalizing part of the new generation in Bulgaria, which will not have sufficiently developed key competences.

Bulgaria`s Moment

“Next Generation EU” is an opportunity for transforming key aspects of the societal and economic system in the country. This is Bulgaria’s moment if we paraphrase the definition of the Chair of the European Commission for the “Next Generation EU”. An opportunity, for which the EC clearly emphasized messages and recommendations about what Bulgaria should do as reforms in different sectors and economic areas.

Bulgaria has the potential to be a leader, and not a country lagging behind. Today, the success of a country is based on its human potential. Let’s invest in the next generation of Bulgaria. Bulgaria is part of the “green heart of Europe” and among the people, this is our main national capital and pride.

Therefore, the Green Restart Coalition insists on:

• Creating a national vision to the plan, which would give clear objectives for the next 6 years, during which the “Next Generation EU” Facility will be active with clear and specific cross-compliance with the Sustainable Development Goals
• Building a model for generating ideas and projects, taking account of all ideas, which can come from people and businesses. The model “A 100 projects from the institutions” is not what should happen.
• Set up criteria for selection and intermediate assessment of projects, comparing them to other projects;
• Set up a clear and justified methodology for an overall assessment of the plan and the results from its implementation after its completion;
• Include all stakeholders in these processes, including representatives of innovation businesses, researchers, civil society organizations, and research institutions.

But not only. The coalition also insists on urgent measures within the short term:

• Announcing the parameters of the public consultation of the plan. How would the proposed measures, directions, and objectives be considered by the authorities?
• Announcing criteria for assessing the proposals, outside the standards. For example, how a certain project would allow us to be climate neutral compared to another one. How should we conserve the natural environment with a specific project or how to establish green jobs, or how will we cope with energy poverty.
• Announce a Committee for assessment of the mechanism and selection criteria for members, as well as the inclusion of representatives outside the government structures;
• Carry out a campaign for public consultation and provision of opportunities for participation for every stakeholder;
• Carry out open, public formats of dialogue with all stakeholders, including innovative small and medium-size and start-up companies, researchers, civil society organizations;
• Establish a mechanism for implementation of the plan, after it gets approved by the European Commission;
• Create a controlling mechanism of the plan implementation through transparency and participation of businesses, researchers, and civil society organizations.
• Create a user friendly and understandable on-line instrument about what are the recommendations of the EC to Bulgaria from the last two European Semester reports, and how each measure and each project will meet these reforms, because without implementing these reforms, Bulgaria will not be able to make use of the additional grant and loan funds for mitigating the impact of the pandemics.

Sincerely yours,

Sasha Bezuhanova, Founder and Chair of the MOVE.BG Board

Vesselina Kavrakova, Executive Director, WWF Bulgaria

Denitsa Petrova, Head of Greenpeace Bulgaria

Svetoslav Stoykov, Co-founder and Chair of the “Circular Economy Institute” Management Board