Sofia moves to curb corruption Financial_Times - 2009/9/16
Hundreds of Bulgarian customs and excise officials face dismissal today in a fresh attempt to crack down on corruption and organised crime in the European Union's poorest member state.
Simeon Djankov, a senior World Bank economist appointed by the right-of-centre government that took office in July, said the move was aimed at wresting control of the customs service from local organised crime groups.
"The mafia has been operating the customs . . . as a result the government has been losing annual receipts equivalent to about 8 per cent of gross domestic product," Mr Djankov told the Financial Times.
More than 80 per cent of wines and spirits sold in Bulgaria, 40 per cent of cigarettes and 30 per cent of diesel fuel are smuggled goods, Mr Djankov said.
Excise revenues tripled in the first 10 days of September, following the appointment of Vanyo Tanov, a senior Bulgarian intelligence service official, as head of customs, he said.
Mr Djankov's high-profile crackdown on smuggling reflects the populist approach of Boyko Borissov, the new prime minister, whose GERB party was elected on a law-and-order platform.
Most Bulgarians believe that tackling corruption - seen as most pervasive in the judiciary, customs and energy sectors - is the biggest challenge faced by the government, according to opinion polls.
More than 500 custom officials will be dismissed today, Mr Djankov said. About 3,000 others will be asked to re-apply for their jobs.
Advisers from the UK's Crown Agents, the customs and excise service, have been re-instated to help implement reform after being sidelined by previous governments.
"We're re-examining a total of 253 proposals the team submitted that were ignored by previous administrations," Mr Djankov said.
The customs reforms, if implemented successfully, would also help rebuild Bulgaria's relationship with the European Commission.
Although some funds have recently been released, hundreds of millions of euros in aid are still frozen because of the previous government's failure to tackle graft and organised crime.
Some analysts are sceptical whether the reforms will prove effective against Bulgaria's powerful organised crime groups.
Previous administrations avoided confrontation with the crime groups, which are also involved in trafficking drugs to western Europe and prostitution.
"These changes are needed but the jury is still out on whether they can be enforced in the medium term," said Ognian Shentov of the Sofia-based Centre for the Study of Democracy.
Mr Djankov said he was optimistic the customs overhaul, with tax reforms, would bring a significant fourth-quarter increase in revenues. He was confident that despite a projected 6 per cent decline in GDP this year, Bulgaria would be able to balance the budget - a key condition for maintaining the currency board regime that pegs the lev to the euro. "We expect to be one of only a handful of countries in the Union that will be able to avoid a deficit this year," he said. Additional reporting by Theodor Troev in Sofia
Author: Kerin Hope