Bulgaria's economy: a tale of extremes

Diana SIMEONOVA
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Bulgaria's average monthly salary is 500 euros, the lowest in the EU, around half the bloc average, and a fraction of what workers earn in western Europe

Bent over the machines for hours with headphones to block out the whirring noise, textile workers in Bulgaria, which holds elections Sunday, earn a pittance even after 10 years of EU membership.

"We sew more cheaply here than in China," industry association chief Radina Bankova shrugged in her factory in the northern town of Lovech as her employees cut, stitched and sewed.

The women working here produce high-end clothes for a German fashion brand but with monthly salaries starting at 230 euros ($250), they are unlikely to be able to afford to buy what they are making.

And ahead of the third parliamentary election in four years in the European Union's poorest country, they are not expecting any improvement to their lives any time soon.

"I don't care about politics. Whoever comes, it's all the same. I commute here and I am happy to have a job, as low-paid as it is," said a Roma woman in her 50s employed at the factory.

"We work from 8 am to 5 pm with one half-an-hour break five days a week for the minimum wage. If there is a big order to finish, we also work Saturdays without additional pay," said another worker in a textile company from the town of Dupnitsa.

"Nobody dares to say a word for fear of being sacked."

The textiles and clothing sector was a major employer under communism and 25 years after the advent of democracy it remains the second largest employer, after the state, with about 100,000 workers.

Salaries have improved in recent years but not by much. Workers in similar sectors such as construction, hospitality and farming also earn around 300-400 euros per month.

Bulgaria's average monthly salary is 500 euros, the lowest in the EU, around half the bloc average, and a fraction of what workers earn in western Europe.

This has put many people off working, leading to a slump in labour force participation rates, and prompted over three and a half million Bulgarians to emigrate since 1990.

In 2016 alone, 30,000 young and highly educated workers upped sticks, taking advantage of the ability to work anywhere in the 28-country EU.

Out of an economically active population of 4.7 million only 2.9 million people work, with the majority of the rest being long-term unemployed or not looking to find a job.

- Silicon Sofia -

But there are also some bright spots, as can be seen in the spacious and peaceful offices of US software company EPAM in downtown Sofia where rows of people work in front of computers.

The sector, which employs 40,000-50,000 people, contributes some 3.5-4.0 percent of Bulgaria's economic output -- twice that of textiles despite half the number of employees.

The average salary in the sector is 1,400 euros per month but industry sources say that top professionals with niche or very specialised qualifications can earn 10 times that.

"(They) can negotiate the same conditions in Bulgaria as in any other Western country in terms of net salary, if you take into account the lower cost of living here," EPAM Bulgaria director and Outsourcing Association chairman Stanimir Nikolov said.

Together with other booming areas like auto parts, Bulgaria's IT and outsourcing sector has attracted billions of euros in foreign direct investment in recent years.

They helped Bulgaria to notch up economic growth of 3.4 percent in 2016, one of the highest rates in the EU.

But putting many investors off is the high level of corruption.

"Decisive action needs to be taken to unburden the economy from monopolisation, cartels and corruption," analyst Evgeni Daynov said.