Sir
Reading Lena Grosse's recent letter to the Editor (The Sofia Echo, March 31) has finally given me the impetus to write a response to the persistent complaints I've heard from many in the expat community regarding the practice of two-tiered, foreigner pricing in Bulgaria. I am a volunteer in this country; as such, I receive a modest stipend from my sponsoring organisation. This allows me to live quite comfortably here in Sofia, but nonetheless it would be considered a mere pittance by Western standards. My experience of the past eight months has made me eternally grateful for blessing of being born in the "right part of the world," when I realise how many more lucrative and varied opportunities I have than the equally bright and talented young Bulgarians that I work with. Therefore, I have little sympathy for the protests of expats who - as I understand it - generally make Western salaries plus a "hardship" bonus for working here.

There is an economic principle you may have learned about in school or university called "first degree price discrimination"-a concept used by firms to maximise their profit when the marginal cost of serving one more customer is far below the price charged (or even zero). In some cases we can think of the product a service company produces as perishable - such as an unsold airline seat that is "wasted" when the cabin is closed. In order to capture this "economic surplus," organisations have historically lowered their price to certain segments of the general population that generally (but not always) have less disposable income. These segments usually have been youth/students, senior citizen, and in resort areas - locals. In the United States, even state governments practice this: "in-state tuition" is generally significantly cheaper at state-supported colleges/universities for residents of that state, as are hunting/fishing licences (although for another reason: most residents pay state income and sales taxes.)

In the same issue of The Sofia Echo, Bozhidar Dimitrov, the director of Bulgaria's National Museum of History related his dilemma in the face of the illegalisation of price discrimination based on citizenship. He said that charging everyone the Bulgarian (one leva) price would mean bankruptcy for the museum. Similarly, raising the price for everyone to the foreigner price of 10 leva would result in the same outcome, since most Bulgarians would simply not come. After reading about the pitiable state of funding for arts and culture in Bulgaria, how many of us really want to deny the museum these nine leva, or deny the chance for ordinary Bulgarians to discover their own history?

In tourist areas where foreigners dominate, such as Sunny Beach, it is easy to just build facilities to meet Westerners' expectations and charge the prevailing Western rates for everyone. Similarly, in small villages where foreign tourists never venture, we find consistently low prices (as well as a much lower level of service.) However, in areas such as Sofia and surrounding ski resorts, businesses find themselves having to upgrade their facilities to attract Western visitors as well as catering to a growing domestic middle class that does not yet have the disposable income their Western counterparts have. It is no wonder that a two-tier pricing structure has evolved in this situation.

I understand that no one likes to feel taken advantage of, and that this "price hike for some" does not always go to improve services or infrastructure, but it is important to recognise the economic reality behind this seemingly unfair practice. I also understand that while price discrimination is commonly accepted where I come from (the US), Western Europeans are much more incensed at this practice, and there are in fact strict EU regulations regarding pricing and discounting. Never the less, I hope Bulgarian businesses will be able to continue to help their fellow citizens live the "good life" that we are used to.

I find that Ms. Grosse's references to Martin Luther King and the civil rights struggle in the US to be inappropriate in this context. We - as expats - are certainly not a poor, oppressed group here in Bulgaria; quite to the contrary, we are generally a wealthy elite living among a less fortunate people (I am saying this a someone who is now making less money than when I was a teenager.) We need to remember that in some way or another, we are all here to help Bulgaria: whether we are working for an embassy, an NGO, building physical infrastructure, or even bringing jobs and high quality goods to this country through our multinational employers.

OK, so maybe I am a naive do-gooder, but I hope I've given you something to think about.

If we - as expats - would consider the vast gulf in personal wealth and disposable income between the average Bulgarian and us, we would quickly see the necessity of the evils of "price discrimination" in a transitioning economy.

Joel Froese
MBA Enterprise Corps
Sofia, Bulgaria