HUMAN DEVELOPMENT REPORT ! BULGARIA 1996
74
efficient private sector. In this respect there
is a need of streamlining the labour mar-
ket to the provision of greater possibilities
for the private entrepreneurs to improve
their managerial skills. Such a programme
could be successful in the region of Mon-
tana, where the share of profitable private
companies at the end of 1994 was the low-
est - 66.0% of all private companies. Ex-
perience could be exchanged whit compa-
nies from Pleven, where the share of prof-
itable companies is the highest - 79.4% of
all private companies.
The social policy pursued in a spirit of
the centrally planned economy and of the
ideology of general prosperity whereby
there was levelling out in labour and dis-
tribution, resulted in the effects of slack-
ening on a regional scale. Their direct
source was the centralization of profit and
its redistribution via the budgetary system.
The market should operate in such a way
that the mechanisms of distribution could
motivate the producers to increase their
profits and to reinvest in industries and in
the infrastructure.
6.3. Characterization of the
regional labour markets
The lasting decline in the populations
economic activity from 55.4% in Septem-
ber 1993 to 51.5% in October 1995 had
specific manifestations in the regions. The
economic activity was lower than the aver-
age in the regions of North Bulgaria -
Montana, Lovech, Rousse. The region of
Plovdiv had a coefficient of economic ac-
tivity equal to the average for the country.
There was higher than the average eco-
nomic activity for the country in the city of
Sofia, in the regions of Bourgas, Varna and
Sofia. In October 1993 the economic ac-
tivity in the
Haskovo region had a coeffi-
cient higher than the average for the coun-
try, while in October 1995 it was already
below the average.
The decline in the populations eco-
nomic activity has been a reflection of the
continuing economic stagnation, as well as
of the inconsistency and contradictions of
the economic reforms carried through.
The result has been a growing disap-
pointment of the population in the pros-
pects of economic life and a drop in the
confidence in the institutionalized labour
market. Long term unemployment, tempo-
rary employment without a formal job reg-
istration, and involvement in illegal eco-
nomic activities have been growing. The
decline of economic
activity in individual
regions has reflected the complexity of the
unresolved problems of the sectoral restruc-
turing of economy. This is more specifi-
cally valid for the problems of the incom-
plete agricultural reform and for the col-
lapse of some agricultural branches like
tobacco production. The inflexible policy
in the restructuring of the mechanical en-
gineering industry after the disintegration
of the CMEA has had its adverse effects
as is the case with the region of Lovech.
According to statistics provided by the
regional labour markets, the employment
coefficient dropped from 43.5 to 41.8 in
the 1993-1995 period. Adverse changes set
in in the ranking of the regions as a result
of the dropping rate of employment. In
September 1993, the employment coeffi-
cient in the regions of the city of Sofia,
Haskovo, Varna and Bourgas was higher
than the average for the country. The low-
est employment coefficient was registered
in the region of Rousse. In March 1995,
only two regions had an employment coef-
ficient higher than the average for the coun-
try - the city of Sofia and the region of Sofia.
The rest of the regions had a rate of em-
ployment lower than the average. The low-
est rate of employment was in the region
of Montana.
Against the background of the high
overall unemployment rate maintained in
the country in the period between 1992 and
1995, the share of the individual labour
markets in the overall unemployment rate
has presented substantial differences.
The distrust in the
labour market has been
growing
75
REGIONAL SPECIFICITIES OF
EMPLOYMENT AND UNEMPLOYMENT
In October 1995,
the region of Mon-
tana had the highest rate of unemployment
followed by
the region of Rousse and the
region of Sofia. A comparison of this rank-
ing of data from September 1993 points to
stability of the unemployment rate of the
regional labour markets.
The differences in the rate of un-
employment, particularly critical in some
settlements, are determined by the scale
and concentration of the former economic
structures and by the specific way in which
they have disintegrated under the new eco-
nomic conditions. The abolition of the co-
operative farms and the restoration of the
right to ownership of agricultural land have
also exerted certain influence.
Due to the
varied degree whereby the individual settle-
ments, regions, municipalities and areas
had been affected by the introduction of
economic reforms, their inequality in terms
of employment and unemployment, and in
terms of living standards of the socially
weak groups as well as of some ethnic mi-
norities, has increased.
Whereas the average rate of unem-
ployment was 21.4 per cent
in September
1993, 15 out of all the 28 regions in the
country had higher than the average un-
employment. In October 1995, when the
average rate of unemployment was 14.7 per
cent, the number of regions with higher
than average rate of unemployment was
already 19.
In the conditions of transition, unem-
ployment has been made necessssary for
the elimination of the imbalances of the
inefficient full employment by the restruc-
turing of production and technological re-
lations, of the domestic and international
markets. When the economic reforms un-
dertaken are not strategically streamlined,
when they do not proceed in a compre-
hensive way and at the necessary rate, un-
employment increasingly becomes long-
term. The data in the figure illustrate the
importance of the problem:
The city of Sofia and the Varna re-
gion are the two regions in which the long-
term unemployment rate is the lowest. The
capital city and Varna are the most prom-
ising in view of finding employment. This
has been borne out by the employment and
unemployment rates monitored in view of
the causes whereby part of the labour force
has remained unemployed.
Staff reduction has been the basic
source of unemployment in the country ac-
counting for 66.3% of all unemployed in
the region of Rousse and 49.1% in the
Haskovo region in October 1995. What is
typical of the city of Sofia, the Bourgas,
Structure of unemployment by regions - September 1993
(countrywide unemployment = 100)
Figure 6.2.
Structure of unemployment by regions - October 1995
(countrywide unemployment = 100)
A. Sofia city
B. Bourgas
C. Varna
D. Lovech
E. Montana
F. Plovdiv
G. Rousse
H. Sofia
I. Haskovo
Figure 6.3.
Long-term
unemployment is the
fundamental problem
of the regional labour
markets