Leaving the Nest

Economic News

22 Jul 2010
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One in two working Bulgarians are considering emigration, while more than 93% of young people want to leave the country, according to a recent study. The results cast fresh light on the demographic problems facing the European Union membership candidate, and on the difficulty government employment programmes now face.

With elections looming, the government is proud of its record in cutting unemployment, but it may find that its job-creation programmes have not been enough to reach the hardcore of jobless outside the main urban areas.

While highly educated Bulgarians can find work at home or abroad, thousands of
others remain almost untouched by the country's recent stability and growth, trapped by a lack of skills and poor infrastructure.

The survey, conducted by the Demographics Institute of the Bulgarian Academy of
Sciences, found that of those Bulgarians who consider themselves "well-to-do", 41% want to emigrate.

This data reflects widespread complaints among employers that well-qualified and able staff are very hard to retain in Bulgaria, whether in the tourism sector or in the financial world. The rewards of emigration are simply too attractive for many to remain in the country. That shortage of skilled labour is, according to some data, fuelling a wage inflation that bodes ill for Bulgarian competitiveness.

Against that background of emigration, the announcement from the National
Statistical Institute (NSI) that unemployment has fallen by 66,500 to 362,000 in the first quarter of 2005 looks less welcome than it might.

The Ministry of Labour put April unemployment at 12.14%, down just over a percentage point from April the previous year. The NSI data showed private sector employment increasing by 90,000 jobs in the year. The number of people working in the public sector decreased by 30,000, year on year, to 857,300, over the same period. Currently private companies employ 1.977m people, or 70% of the working population.

At the same time, around 700,000 Bulgarians have left the country since 1989, according to statistics released at a recent conference focusing on the Balkan state's demographic situation. The country's population is around 7.5m.

Bulgaria's death rate is also high by European standards, and its life expectancy low. The rate of abortion is high and the number of marriages is falling.

The long-term prognosis is, however, better say the population experts. The EU accession process and the economic stability it brings will eventually
decrease and perhaps reverse the outflow, they predict.

But before that can happen, Bulgarian businesses face a real labour force problem.

The number of economically active Bulgarians has been falling steadily for many years. The NSI says that the active working population fell by 12,000 in 2004 and has been shedding around 10,000 annually since 1999.

Behind those figures lies a group of people who have effectively removed themselves from the labour market, often in rural areas. They survive on the grey economy and sometimes make a living from subsistence farming. These "discouraged job-seekers" who lack education and many of the skills needed to make their way in a market economy form a contrast to the successful and highly skilled workers whose main aim in life, it appears, is to leave Bulgaria.

State-sponsored temporary job programmes and a rise in private sector employment have helped the reformist government led by Prime Minister Simeon Saxe-Coburg-Gotha cut unemployment from 17.21% in October 2001. The ruling party has pledged to further cut employment to under 10% if it wins the June 25 general election.

The coalition government will allocate Lv204m ($131.4m/104.2m euro) to stimulate employment in 2005. The sum was the same last year.

But many analysts warn that the deterioration in the quality of the resources on the labour market is dangerous and threatening to development and competitiveness.

Take the village of Ruen, near Burgas, as an example of what the consequences can be.

A factory in the village closed down recently - not for financial reasons, but because 300 more or less qualified employees could not be found, Bozhidar Danev, chairman of the Bulgarian Industrial Association, said recently.

Despite rural unemployment running at far higher rates than the national average - it reaches as high as 20% in some areas - the factory could not find the trained staff of welders or carpenters required.

Businessmen complain that the education system is failing the needs of Bulgarian business. They say secondary schools and the higher educational establishments produce unemployed managers instead of the skilled labour, cooks and waitresses for whose positions there is hunger on the market. While none are calling the situation structural unemployment just yet, it would appear to be heading in that direction.

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