I remember my first visit to a Roma ghetto. I was 21, fresh out of university, working as a courier, delivering windscreen shade covers for people who'd refueled in Shell. The addresses were all over Sofia and back then the city was a different beast - emerging from the chaos of the 90s, the real-estate boom still to come, unsure what awaited it in the near future. I encountered all sorts of people and situations, as I made my way through the maze of concrete.
And yet nothing was as strange as the visit to Fakulteta: the patch of land near the West Park, where rows of Roma houses were quickly emerging. As I drove around it, amazed by the totally different world I'd entered, looking for an address in a place where streets had no name, I stopped in front of a palace.
It was huge, lion heads on top of the gates, a very unusual sight. In front, a man was loading the BMW 7 series with a pile of mattresses. Turned out, he was my client. I came out of there feeling like I'd missed something, like there was a secret economy going on, glimpses of which I'd just witnessed.
Roma workers have always been underestimated here. We've been talking about integrating them, valuing them, using this hidden reservoir of labor for decades now. And we somehow missed the fact that now - when we need it most, this labor force is no longer here. Research by Capital last month showed that between 40-60% of the Roma population is abroad. They mostly went to the UK, Germany, Spain, the Netherlands and Italy. Wherever they could find a well-paid job and what's more: they took the kids with them.
So while we were busy arguing whether Roma's higher fertility rates will "doom the nation" or wondering why there are Roma villages in the countryside where there's virtually no one else left (because they are infrastructurally, educationally and medically isolated), they simply left too. I promise we will explore more of this in the coming weeks on K Insights.
But that's a problem.
Because we suddenly have no "reservoir" of labor. We can't find any more people to work. There are now places and industries in Bulgaria that are scraping the bottom and finding no one. It's great to have a booming economy, hungry for labor. We're on a different planet, compared to say, Latin America.
But what do we do, when the numbers simply don't add up? My bet is that in the next 5 years, we'll be suffering from severe labor shortages. We used to complain that salaries were low but now they are growing in double digits. At some point, we will need to look at what Romania is doing. It is now importing labor from Asia on a massive scale. My friend Tim Judah, writing for the Economist, noted that in some ways, Romania reminds him of Italy in the 70s.
Bulgaria is far behind. And the big question is, if we didn't manage to integrate the one minority which have grown up here and knows the language and the rituals, what chance do we have to integrate anybody? Something big needs to change. And someone needs to start talking about it.
This newsletter is helped by
Martin Dimitrov & Monika Varbanova
1. Politics this week:
Zelensky visit fallout
A week after the surprise visit of the Ukrainian president to Bulgaria, arguments between the Russophile wing of Bulgarian politics - the Presidency, BSP and Vazrazhdane - and the cabinet continue to rage. Vice-President Iliyana Yotova claimed that there were "hidden agreements" struck by the Ukrainian delegation аbout military donations that could hinder the capacity of the Bulgarian military. The Defense Ministry responded with a press release debunking the claim.
Then came President Radev himself, accusing the new government of lacking an opinion and position on the topic of the Ukraine war and that it "unconditionally follows the position of large [NATO] members" on the matter. Yet no amount of PR can hide the humiliation he suffered after his face-off with Zelensky which probably means he's going to retreat to more and more nationalistic positions.
NATO Summit: Bulgaria battle group grows to a brigade
Meanwhile, at the Vilnius summit, Bulgaria committed to upgrading the NATO multinational battle group that was deployed here to a brigade, a fourfold increase in the size of troops in the country. This was announced by Prime Minister Nikolay Denkov after the end of the first day of the NATO summit in Lithuania.
Currently, there are around 1,300 NATO troops in the country, predominantly from the framework NATO partner Italy, alongside British, Greek and American forces. Under NATO rules, a battalion-sized group would amount to 5,000 soldiers and would require greater commitment on behalf of the host nation.
Verbatim
"Bulgaria needs to build up its own armed forces. This includes additional weaponry, including the 16 F-16 Block 70 aircraft, the two multi-purpose ships expected to enter service, providing armored vehicles for the infantry to cover the entire spectrum - air, sea and land," Mr Denkov said.
Ah, high-level appointments, at last
After a month of indecision, GERB and the reformists agreed on a mechanism for filling positions in regulators. This mechanism, obviously, doesn't work very well for the WCC-DB coalition: they are still to get a single chair at the top.
First, it was GERB's nominee for National Bank Governor, the incumbent Dimitar Radev. Then the National Audit Office, where the ex-MP Dimitar Glavchev was billed as a head. Borissov's people tried to pull a win at the National Health Insurance Fund also, but their candidate was withdrawn at the last moment, due to lots of controversies.
We'll run it together
In yet another blow, on Thursday WCC-DB approved Mr Borissov and WCC leader Kiril Petkov to become co-chairs of the Foreign Affairs committee, sealing the unsaid coalition. Since Turkish MRF got the Finance committee, the governing party at present has no regulatory appointments and no chair of any of the 3 big committees: Finances, Legal and Regional.
2. Economy:
A new leak: Lev Ins data on 2,25 million clients exposedYou can say that searching for leaked personal data has become something of a national sport. This week saw the largest data leak in Bulgaria since 2019, when the National Revenue Agency (NRA) was hacked. This time it's a private company - insurance group Lev Ins's database of 2,25 million people was sent to Capital weekly and other media outlets by the hacker (or hackers) using the alias ``Emil Kyulev '' on Wednesday. Or at least that's what the hackers claim, while Lev Ins debates that.
It is clear, however, that the database contains bundles of data: Cyrillic and Latin names, personal identification number, an ID card number, an address and in some cases a mobile number of the affected clients. The records sent to media outlets are dated December 2022 and January 2023.
Some curious details
The hackers claim that they have much more, including "the full accounting of Lev Ins, which showed abuse and embezzlement through huge monthly bonuses."
Also, some personal mails from none other than Alexey Petrov, the head of the group who, coincidentally, is chair of "Cyber and corporate security" faculty at Plovdiv's University.
And a funny detail: some of the people from the group which was blamed for the NRA leak have come to work for Lev Ins cyber unit, selling insurance to companies against breaching. You can't make it up.
Figures:
11%Is the fall in manufacturing production compared to last year, which is the 5th consecutive month of decrease.
-0.2%
Is the annual fall of exports compared to the same period last year for the first 6 months.
3. Business:
Post Bulgarian PostThe Ministry of Transport plans to present a reform package for the state-owned enterprise in September. This is needed in order to fulfill Brussels requirements - either BP returns a 26 million euro loan or it gets reformed.
IT
Immedis250 Bulgarian employees of the tech company are now becoming part of UKG after CluneTech sold the company to the American buyer.
Plastic
FicosotaInnovation Norway will co-finance the Bulgarian company's effort to save around 75% of plastic in new packaging.
4. Energy:
A new day, a New PlanWell, if you are the type of person who is interested in those things, you probably know the Bulgarian Recovery and Resilience Plan underwent a lot of changes. Now it is heading for another. The new government plans to cut 30% of Maritza-Iztok coal plant production and close down several others, mostly connected to the infamous Hristo Kovatchki. Those include some heating plants for large cities (Ruse, Pernik). The Plan revision also has plenty of other details like help for households who install solar, a new solar park in Stara Zagora and etc. It is, however, tricky to pass this through both the Parliament and the European Commission. The first thinks we shouldn't touch the coal, while the latter thinks we are not bold enough in that direction.
5. Watch out for:
People:The ex-Netherlands PM managed to stop Bulgaria on its road to Schengen for over a decade and now will do so one last time - as a caretaker PM this year.
Lyubomir Spassov
The infamous assistant professor and favorite doctor of MRF chairman Ahmed Dogan was fired as director of Sofia's Lozenets hospital because of evidence of involvement in organ trafficking and illegal transplants, but now got elected as dean of Sofia University's Medical faculty for the third time in a row.
Location:
Karlovy VaryA large piece of space debris fell somewhere in the Danube plain with a bang, causing fear and speculation in Northwestern Bulgaria, a lot of jokes elsewhere and ultimately filling a lot of lazy summer airtime for the TV channels. The Institute of Astronomy of the Bulgarian Academy of Sciences says that a so-called bolide or shooting star of larger size had been observed in northwestern Bulgaria. Here is a video of the event.
I remember my first visit to a Roma ghetto. I was 21, fresh out of university, working as a courier, delivering windscreen shade covers for people who'd refueled in Shell. The addresses were all over Sofia and back then the city was a different beast - emerging from the chaos of the 90s, the real-estate boom still to come, unsure what awaited it in the near future. I encountered all sorts of people and situations, as I made my way through the maze of concrete.
And yet nothing was as strange as the visit to Fakulteta: the patch of land near the West Park, where rows of Roma houses were quickly emerging. As I drove around it, amazed by the totally different world I'd entered, looking for an address in a place where streets had no name, I stopped in front of a palace.
