Sabbatical Notes from the former USSR

Thomas G. SearsProfessor of Accounting Tom Sears is studying the progress (or lack thereof) of taxation systems of countries that were part of the former USSR. Professor Sears is interviewing government officials abroad in addition to surveying the citizens of these countries whose lives are directly impacted. Some countries that are still struggling with developing their own unique tax systems are Belarus, Bulgaria, Romania, and Turkmenistan.

October 19, 2005: Cluj, Romania
I am back in Cluj, Romania and am very excited about coming home. I certainly have been away long enough, even though the time here was very productive. I do have two more appointments with members of the Ministry of Finance but today is mainly going to be spent seeing Cluj once again and saying hello and goodbye to the many new friends I have made while here.
 
Yesterday was a travel day from 10 a.m. until 11 p.m., counting the bus trip and hold-over times. One event took place in Bucharest that I still don't understand. My flight was to leave for Cluj from Gate 1 while a flight to Timorosa was to leave from Gate 3 (about 20 feet away). With 5 minutes to go they made an announcement that the gates had been reversed and they only announced it in Romanian. This simple, unnecessary act caused an additional 1-1/2 hour delay as they spent additional time tracking down passengers who either had not arrived yet or were on the wrong bus. It was really kind of comical but I wish it happened to someone else.
 
The contrasts between Romania and Bulgaria are amazing. There are many things I want to write about regarding these differences and I can see my paper becoming a book. Thank heavens I have more time left on my sabbatical. See you all soon . . . Tom 

October 17, 2005: Sofia
Wow! Talk about an impressive weekend. I had the bus to Sofia stop at a little village named Vladaya. I then walked about 2 miles to Mr. George Ganchev's home. What a very impressive residence and just as impressive a man. He was a presidential candidate in 1992 and 1996 and received 17% and 24% of the popular vote for those years respectively. I was a guest in his home for two days and he set up some very impressive meetings for me. More on that later. Mr. Ganchev has had a very impressive life. He is 66 years old and his height is a very intimidating 6'6". He has been a world fencing champion, a member and later coach for the Bulgarian national basketball team. He has a book of his poetry and a biography that is in its 5th edition. He is presently translating an English version which I can't wait to get. He is an accomplished guitarist and is presently being considered for a post at the United Nations. I could go on and on about this man.
 
Saturday started out with an interview of him (obviously) and then another interview with the chief editor of the second largest newspaper in Bulgaria. The next morning we left in his bullet-proof, armored Mercedes Benz for a meeting with one of Bulgaria's newest multi-, multi-millionaires (actually worth 1/2 billion). He is only 40 years old and a very humble man. We had the discussion in a very elegant restaurant on the 18th floor overlooking all of Sofia. I wondered why we were the only people in this very impressive place and Mr. Ganchev said that the man had rented out the entire restaurant for our meeting!!! Pretty impressive. We then went on to have a "lunch" that cost a total of about 6 months of the average Bulgarian wage. I learned a great deal from him and he offered for me to be his guest next year if I return. I had two other appointments that day, then caught the bus back to Blageovgrad and arrived there around 8:00.
 
Today is a rest day with only one appointment, and then I leave for Cluj, Romania. I will have a few hours to spend in Bucharest while I wait for my connection. Then I will have one appointment in Cluj on Wednesday and then I LEAVE FOR HOME on Thursday!! It has been a very valuable and worthwhile experience but I am certainly ready to come home.
 
One thing I noticed on many occasions were posters posted on walls with pictures of individuals and a cross at the top with what looked to be like a brief history of the person (in Bulgarian obviously). I asked Mr. Ganchev what they were and they were posters of people who have passed away over the last 5 years or so. The saddest part for me was the very young ages of these people. The vast majority were anywhere from 30 to 50 years old.
 
I'll try to get one more posting that will try to summarize my experiences here. I hope the notes have been interesting to read . . . Tom

October 14, 2005: Bulgaria
The cost of living is very low, especially in Bulgaria. I can have a pork filet, french fries, a salad, and two beers for about five dollars. This also includes the tip. Unfortunately, it is not so good for the Bulgarians. The minimum wage here is 150 leva a month (about $85). After this amount they are responsible for income taxes. The average wage is only 300 leva a month. It is very hard for people to get by and most have two jobs or are part of the underground economy. Evading taxes is not a bad thing as far as they are concerned and they do it out of necessity.
 
What is strange is that there are no people begging on the streets here. In contrast, when I walk a few blocks in Cluj, Romania at least 10 people approach me. 
 
Yes, they are hit very hard with increased fuel costs. The State-controlled utilities adjust prices every July 1 and this last July electricity went up 18%. Telephone costs increased by 15% and yes, they had huge increases in gas prices. One lady I was talking to while waiting for an appointment said she stays in the office until 9 or 10 o'clock in the evening; not to work but just to stay warm. She can't afford to turn on her heat or lights.
 
One potential problem is Bulgaria's nuclear power plants. It is their number-one revenue generator and the EU wants them to shut down two or three of their five plants, simply because they were of Russian design. This is even though they have completely updated all their safety systems and pass current European safety standards. If this happens it will be a serious revenue problem and everyone is wondering what will happen.
 
The food here is great. I am not an experimenter but what I order is delicious.  The good news is that they have only one McDonalds in Cluj and none in Blageovgrad. I'm sure that will change soon. I have a typical breakfast while on the other hand, just like a travel book says, a Bulgarian breakfast is a cup of espresso and two or three cigarettes. Lunch is the main meal in both countries. On a trip I was taken on as part of the Romanian conference we stopped at a very quaint inn and had a 5-course lunch. It lasted about 3-1/2 hours.
 
My last bit of news. I haven't been able to send as many updates as I would have liked. Each city had only two Internet cafes (I only found one) and they are very popular. Sometimes the computers are very unreliable and one actually blew up only two stations down from me. There was a loud pop and a lot of smoke. So please forgive me if I don't send on a daily basis . . . Tom

October 13, 2005: Bulgaria
So far the cities I have been in are Cluj-Napoca, Romania, about 7-1/2 hours northwest from Bucharest by train. I am presently in Blageovgrad, Bulgaria, about 2 hours from Sofia by bus. Blageovgrad is also about 30 minutes from the Serbian/Macedonian border. I will be leaving for Sofia, Bulgaria tomorrow and will be there approximately 4 days. I have quite a few important interviews set up there.

I have been very fortunate in that the people are very kind and almost all of the young people (college age and up) are quite fluent in English. The university in Cluj, Romania as well as the American University is Blageovgrad have many, many courses taught in English. It would be a great experience for our students and they would feel very comfortable here.

There are noticeable differences between both countries. The Romanians as a whole don't think very much of the Bulgarians and feel that the crime and corruption there are very dangerous. They told me that when they go to Greece for vacation they gas up at the Romanian border and drive straight through Bulgaria without stopping. Obviously, after hearing this many times, I began to get a little nervous. However, when I got here in both Sofia and Blageovgrad, I found that nothing could be further from the truth. I have had many people go out of their way to assist me and I feel safe no matter where I am in the city. I do walk a lot (5 to 10 miles a day), which over time allows me to see a great deal of the city that I am in at the time.

Some of the noticeable things on my trip...The people in the city of Cluj won't make eye contact or say hello when passing them in the street. I did catch them glancing at me once in a while but they immediately looked away. It is the total opposite when in the country. Everyone smiles, waves and says hello, wanting to have a conversation, even considering the language barrier that exists. The Romanians are also the most aggressive drivers that I have ever seen! They will lay on their horns at the slightest provocation and if you don't start to move immediately when the light changes you have 20 cars honking at you. I would say it is at least two times as bad as a NYC rush hour period. I also learned very quickly that the drivers don't always honor the walk signal by as much as 5 seconds after the light has changed. In spite of all this I only saw only one accident the whole time I was is Cluj and it was a small one. In contrast, the Bulgarian drivers are very civilized and I don't think I have heard anyone honk their horn at a pedestrian or at another auto even once.

When visiting a monastery (very beautiful) a monk had someone in my group tell me that it was an extreme insult to have your hands in your pockets while inside. They told me in a very nice way but I was still pretty embarrassed.

The hardest thing for me to get used to is the way Bulgarians indicate yes and no. They shake their head side to side when they indicate yes and nod their heads up and down when they mean no. This has caused a few communication problems. For example, when I ask for a cup of tea and they confirm it by asking me "tea?" I nod my head and say yes. But they think I mean no and ask me again. Also when I asked to use the computer they shook their heads which I interpreted as them saying no and did a double take, not being able to figure out why I couldn't. I am getting the procedure down reasonably well.

I probably won't be able to send anything for the first few days while in Sofia but I will try. After Friday I can only e-mail one more time since I am leaving by bus early Tuesday for the Sofia airport, which takes me to Bucharest and then onto Cluj . . . Tom

October 10, 2005: Bulgaria
I am so very sorry for not writing sooner but both cities have only two Internet cafes and there is always a long line. Also, when I get a computer I have only a limited amount of time to send messages. Even though I am quite late I will try to write more often.

As far as my research goes, I have had a very productive time. While I was in Romania I met with over 25 individuals, including bankers, political scientists, economists, professors, small-business owners, and members of the Ministry of Finance. My meetings included a 20-question open-ended survey, which went off in many different directions, depending who I was talking to. I was also invited to be a guest at their Small and Medium size Enterprise Conference where presenters were from Greece, Malaysia, India, and other places.

The original purpose of  my trip was to compare and contrast their tax systems with ours. I started out with 12 prospective countries and narrowed it down to Romania and Bulgaria. The reasons were that they were geographically close, had different tax systems (Romania a flat tax and Bulgaria a progressive one), and both were on track to join the European Union in 2007. Whether or not they are successful remains to be seen.

I am presently in Bulgaria (Blageovgrad) and am in the process of setting up more meetings. A Mr. George Ganchev has set up some excellent contacts for me. He was a presidential candidate in the last two presidential elections; a very powerful individual. However, the meetings are in Sofia, which is a three-hour bus ride one way. I worry about wasting valuable time in traveling so much.

I think that's it for now. People are looking impatient. I will try to write again soon . . . Tom