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Round table: Competitive Environment and Informal Economy in Bulgaria
 
On December 18, 2003 at a round table organized by Coalition 2000 and the Center for the Study of Democracy experts from the business sector, NGOs and the government discussed measures undertaken, outcomes and possible future steps to reduce the negative impact of the informal economy on the competitive environment in the country.

Ms. Andriana Sukova-Tosheva, Executive Director of the Bulgarian International Business Association highlighted that tax evasion and the excessively detailed administrative intervention in the business sector are the main sources of unfair competition. She pointed out that BIBA members have already managed to reduce internal company economic crime and fraud by introducing strict internal rules and codes of conduct. However, Ms Tosheva expressed serious concerns that external, organized crime and physical threats strongly discourage companies’ investment and innovation activity.

Mr. Kamen Kolev, Director of the Industrial Development Department, Bulgarian Industrial Association identified unfair competition as the main obstacle to doing business in this country. According to BIA studies the size of the gray economy in 2002 was 27.8% of GDP and the most affected industries were leather manufacturing (including shoe production), dairy and meat, textiles and knitwear. BIA specified that the main sources of gray economic activity are smuggling, contraband and fraud at import, inefficient customs, public procurement and unclear legislation.


Mr. Georgi Tchernev, Vice President of the Bulgarian Chamber of Commerce and Industry presented specific suggestions to limit the gray economy in the areas of contraband and customs frauds. His ideas were directed at the introduction of real time information coverage of customs authorities’ activities, improvement of documentary control at border checkpoints and a more precise definition of the criminal liability of the different participants in customs fraud and contraband cases.

Ms. Elka Dimitrova, Director of the Labor Market Policy Department, Ministry of Labor and Social Policy described the measures undertaken by the Ministry to uncover undeclared work and their results and appealed for better control and civil consciousness in this sphere.

Mr. Ruslan Stefanov, Coordinator of the Economic Program, Center for the Study of Democracy presented the 2003 index of informal economy dynamics, developed by Vitosha Research and a Coalition 2000 working group. The index shows a decrease in the hidden economy in the country by 1/4 to 1/3 for the past year. The main factors behind the positive results have been the measures undertaken by the Ministry of Labor and Social Policy for the registration of labor contracts. However, the lack of accompanying economic policy measures for improvement of the business environment undermines the sustainability of these results.

Round table agenda and presentations
Round table: The Gray Economy in Bulgaria – Recent Trends
The Informal Economy in the EU Accession Countries: Size, Scope, Trends and Challenges in the Process of EU Enlargement
 
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