The major highlight of 1996 CSD Economic Program
activities was the SME policy initiative. Undertaken at the request
of the local USAID representative, it resulted in the definition of
an Action Plan addressing the policy and legal constraints that
currently face small and medium size enterprises (SMEs) in
Bulgaria, and proposing a set of measures to encourage the growth
of this sector of the economy.
Some of the most distinguished Bulgarian experts
were involved in this initiative under the auspices of the CSD. The
resulting Policy Forum was a high-profile meeting attended by the
President-elect, Mr. Petar Stoyanov, the deputy chair of the
National Assembly, the ministers of trade and industry, the
governor of the National Bank, along with other senior government
officials and policy-makers. The CSD was successful in mobilizing
bi-partisan political support for the policy agenda outlined in the
paper and in receiving endorsement of its priorities by
policy-makers from across the political spectrum.
I. Implementing Policy Change: Policy and Legal Environment for the
Growth of the SME Sector in Bulgaria
In October 1996, at the request of the
representative of the United States Agency for International
Development (USAID) in Sofia, CSD initiated a process to produce a
recommendation paper addressing the policy and legal constraints
facing small and medium size enterprises (SMEs) in Bulgaria, and to
identify a set of possible solutions to encourage the growth of
this key sector of the economy. The main purpose of this policy
paper was to set out a specific and comprehensive agenda for an
assistance program in this area.
Building upon its experience and extensive network
of contacts, CSD started a process of development of the SME policy
paper which consisted of two stages of consultations. Each stage
was completed by a public discussion at CSD. The first stage
included the initial drafting of the paper and consultations at the
expert level. The second stage aimed at providing bi-partisan
political support for the policy agenda outlined in the paper and
endorsement of its priorities by policy makers from across the
political spectrum.
I. The Process
1. Stage One: The Expert Level
Networking
At the outset of the drafting process, CSD put
together two task force groups of experts to write the economic
policy and legal sections of the paper. The final, monitoring
section was initially drafted by Alexander Stoyanov, CSD's Director
of Research. With a view to adopting a comprehensive approach in
the paper, CSD contacted a number of Bulgarian and international
institutions, involved in the development of SMEs, with a request
to provide suggestions and comments to the paper. As a result, the
paper reflected a variety of viewpoints and experience thus
ensuring a consensus on its recommendations.
The first round of consultations was held at the
expert and civil service level including independent experts,
deputy ministers and heads of ministerial departments,
representatives of other government agencies and leaders of
business associations. The paper was presented to over 50 experts
and government agencies, business associations, research NGOs,
trade unions, international and foreign donor organizations and
individual SMEs. Special attention was devoted to including the
perspective of Bulgaria integration to the European Union,
particularly the provisions on SMEs in the Europe Agreement and the
EU definition of SMEs.
The Policy Workshop
The first stage of consultations was completed by a
policy workshop held on November 20, at CSD with representatives of
the organizations involved in the preliminary consultations.
Following an introductory plenary session, the workshop continued
in two separate sessions у on economic policy and on the legal and
institutional environment. The discussions were moderated by
members of the task force. A final plenary session was devoted to
the discussion of a monitoring system presented by Alexander
Stoyanov, CSD Director of Research.
2. Stage Two: the Policy Makers Level
Networking
Following the workshop discussions, members of the
task force groups and CSD experts held individual meetings with a
number of policy makers who had been invited to participate in the
forthcoming Policy Forum. The draft paper, amended as a result of
the expert discussion, had been circulated in advance together with
some background information about the objectives of the Forum.
During the meetings, the experts provided additional
clarification on the action lines as well as on the overall context
of the drafting exercise.
Believing that in order for the paper to provide an
agenda of a feasible long term assistance program it needs to enjoy
widespread support among politicians and the business community,
CSD consulted representatives of the major parliamentary parties,
the government, the governor of the National Bank, leaders of
business associations and trade unions to comment on the paper and
take part in the forum discussions. By enlisting the support of key
political figures and institutions in advance of the Forum, CSD
managed to build a consensus for the agenda which is a key
prerequisite for its successful implementation.
The Policy Forum
The policy forum was held on November 29 at the
conference hall of CSD. Following some
Introductory remarks by CSD’s President, Dr. Ognian
Shentov, Mr. John Tennant, USAID
Representative and Ms. Rose Likins, Charge
d’Affaires at the US Embassy presented the
Implementing Policy Change Program. In his address
to the Forum, Mr. Petar Stoyanov,
President-elect of the Republic of Bulgaria,
expressed his support for a program encouraging the development of
the private sector in Bulgaria, and particularly SMEs.
The first session of the forum was chaired jointly
by Mr. Atanas Paparizov, Minister of Trade and Foreign Economic
Cooperation and Dr. George Prohaski, Executive Director of the Open
Society Fund-Sofia and discussed the economic policy
recommendations of the paper. The second session, dealing with the
policy and legal environment for SMEs was chaired by Mr. Atanas
Zhelezchev, Deputy Chair of the National Assembly. The concluding
part of the forum included a presentation by Mr. Alexander Stoyanov
and Professor Zahari Karamfilov, Chairman of the National Institute
of Statistics on a system monitoring the state of the SME sector
and the implementation of the policy agenda outlined in the
paper.
II. The Paper
Three sets of recommendations ("action lines") are
presented in the paper:
- economic policy;
- legal and institutional framework;
- monitoring system.
Economic Policy Recommendations
The economic destabilization and deterioration of
the Bulgarian business environment has seriously restricted the
development of the SME sector. While such macro-economic failures
affect all private enterprises, the impact on the SME sector is
compounded due to its general inability to access capital and
information. The policy paper is intended to provide a guideline
for officials to adhere to when developing the overall plan for the
country so that the proper recognition of the important role of
SMEs in the development of the Bulgarian economy is included. The
success of Bulgaria's SME sector is essential to the development of
the economy as a whole. Foremost, SMEs are capable of creating many
new jobs at low costs. These jobs will be necessary to absorb new
unemployment created by restructuring formerly state-owned
enterprises.
The paper identifies a set of action lines aimed at
providing a basis for a comprehensive and coherent action plan for
promoting the growth of this key sector of the economy. The first
group of action lines addresses the development of the SME sector
vis-a-vis the stabilization and improvement of the Bulgarian
economy including:
development of an anti-crisis program;
development of a strategy for accelerated,
full-scale privatization;
development of a national strategy for mobilizing
domestic investment and attracting foreign capital;
Implementation of measures designed to increase the
absorption capacity of the country with respect to international
SME support programs;
tax measures;
actions against shadow economic and criminal
activities.
Further, recommendations focus on implementing a
consistent, long term strategy for the creation of the appropriate
environment to promote SME development and for the attainment of
competitive power and European standards. In particular, the
actions foresee:
building of an institutional infrastructure for
encouraging and supporting SMEs;
Implementation of a consistent policy of support
measures and relieves for SMEs;
development of a program for the financial
assistance and relief;
development of a foreign economic policy for the
attraction of government support for the SME sector.
Recommendations to Improve the Legal and
Institutional Environment
This action line includes recommendations aimed
at:
Improving the implementation of existing laws
affecting small and medium size enterprises;
drafting additional laws for SMEs;
Improving the institutional framework for small and
medium size enterprises and enhancing the institutional
efficiency.
The Bulgarian Parliament has passed a number of laws
relevant to the activity of SMEs that have not been effectively
implemented. Failure to implement the laws has been due to lack of
relevant experience among implementing officials and
representatives of SMEs, the lack of institutional framework to
support the laws and legally fixed implementation procedures that
slow down the process. In all such cases, SMEs suffer due to the
inability of institutions and the private sector to implement, or
act under, laws that are the result of already existing political
consensus in society.
Thus, appropriate actions should be taken towards
implementing existing and non-implemented legislation with each
sector, private and public, doing their part to become educated
about how new laws function in order to obtain the desired
results.
Furthermore, regardless of many steps taken towards
creating an enabling environment for SMEs, there are still a number
of laws that need to be drafted in the near future. In drafting
such laws, special attention should be paid to two factors:
stability of the legal system should be preserved as
much as possible in this process which implies change and
motion;
special attention should be paid to prevent the
passage of retroactive legislation which represents the worst form
of legal instability.
Particularly, new legislation should take into
consideration that Bulgaria has signed an Association Agreement
with the European Union and has adopted a policy towards
approximation of its internal legislation with EU law. The paper
does not intend to propose an exhaustive list of laws that need to
be drafted in order for the legal framework for SMEs to be
completed but rather to suggest important pieces of legislation
which are necessary for the development of the SME sector. These
include foreclosure, leasing, consumer protection, electronic
commerce, trade mark, government procurement legislation, as well
as specialized SME legislation.
Finally, this action line proposes measures to
improve institutional efficiency. In many cases high quality
legislation fails to have a positive impact on the relationships
governed by it. This is due primarily to inefficient and
non-uniform implementation by the relevant agencies. Thus the paper
proposes the creation of standardized operating procedures,
including the use of standardized forms.
Monitoring System
In light of the proposed recommendations, a
monitoring system is of principal importance for the success of an
SME development strategy. The objective of this action line is to
design and implement a comprehensive monitoring system to determine
whether or not policy recommendations are being administered and
enforced and, ultimately, if the desired level of success has been
achieved. The system would perform at least two functions:
to monitor the direct impact of policy decisions and
to assess the effectiveness of policy change efforts in the SME
sector;
to provide relevant vehicles (based on analyses and
relevant data) to decision makers that would both inform them of
developments in the SME sector and provide support for policy
change.
The paper is published in both English and
Bulgarian.
II. Privatization on a Dual Track: Mass and Market
Based Privatization in Bulgaria
The main objective of this project was to assist the
government agencies in striking the right balance between the two
forms of privatization currently underway in Bulgaria. In 1996,
CSD’s efforts were aimed at:
- extending the municipal privatization know-how
acquired in the Bansko pilot project (1994-1995) to other
municipalities;
- monitoring the process of mass privatization and
providing critical feedback;
- educating the public about the mechanisms of mass
privatization and increasing public support for the process.
1. Enhancing the Progress of Municipal
Privatization
Establishment of the Municipal Privatization Fund
of the city of Rousse
In February, using the model of CSD's Pilot Project
on municipal privatization in the Bansko region and with
consultations from CSD experts, a Municipal Privatization Fund was
established in the city of Rousse. The fund started operating in
March. Its legal organization replicates the principles adopted in
Bansko.
Several other municipalities had considered using
this program as a model for developing their own privatization
funds. In response to this interest, CSD prepared information
packages on the establishment and management of municipal
privatization funds which were circulated to ten municipalities.
Six of them - the municipalities of Gabrovo, Svishtov, Stara
Zagora, Pleven, Vidin, and Vratsa showed interest in receiving
further expert assistance from CSD in the establishment of regional
investment/privatization funds.
Assistance and Sample Documentation to the
Municipality of Svishtov
In February, the State Property and Privatization
Department of the Svishtov municipality requested assistance,
detailed guidelines and sample documentation on specific procedures
related to the process of municipal privatization - tenders and
negotiations with potential buyers as privatization
instruments.
The documentation, know-how and consultations
provided by CSD experts facilitated the actual initiation of
municipal privatization procedures in the municipality.
Workshop on Municipal Privatization:
Institutional, Financial and Legal Aspects, March 21
The event was attended by deputy-mayors and heads of
privatization departments in twenty
municipalities, experts from the Privatization
Agency, along with representatives of the Legal and Local
Administration Departments at the Council of Ministers.
The purpose of the workshop was to evaluate the
progress of municipal privatization у the most dynamic component of
the privatization process in Bulgaria. It provided a forum for
municipalities to exchange views and share good practices.
Participants analyzed the practical results of their day-to-day
activities and discussed suggestions for amendments to the legal
framework of municipal privatization.
They were briefed on the results of the joint
municipal privatization initiative of CSD and the
municipality of Bansko. This project has a
three-year history and its main practical output was the adoption
of the Rules for the Organization and Activities of the Municipal
Privatization Fund by the Municipal Council of Bansko.
Drafting Amendments to the Legal Framework of
Municipal Privatization
CSD experts drafted a set of proposals for
amendments to the Privatization Law. The proposals envision that
municipalities should be empowered to decide which enterprises to
be included in the privatization program.
Draft amendments were forwarded to the Privatization
Agency. They were prepared as a follow-up action to the workshop on
municipal privatization held on March 21 and incorporated
discussion results.
2. Providing Policy Recommendations and Consulting
Services
Development of a Final Policy Recommendations
Paper
The project resulted in a series of policy analyses
of the current legal framework for mass and market-based
privatization, conducted in consultation with independent experts
and policy-makers.
Based on these analyses and the results of four
sociological surveys, CSD developed a Final Policy Recommendations
Paper to help the government prepare an overall privatization
strategy.
The Policy Paper provides a comprehensive analysis
of major pieces of legislation related to privatization. It traces
the development of legislation since 1989 and analyzes the results
of its implementation to date. Specific proposals for amendments to
existing regulations are also outlined.
The following are a few excerpts from the paper:
"The legal framework of privatization is very
fragmented. The Law on Restructuring and Privatization of State and
Municipally Owned Enterprises is conceived as a "framework" law
which envisages the passage of a large body of secondary
legislation…
Mass privatization is regulated on an "ad hoc" basis
in the absence of a clear concept or strategy. The approach adopted
by the government is based on the assumption that changes can
easily be introduced to the body of secondary legislation and the
Law, itself, as the need for them arises. Such an approach can be
very risky…
The powers and responsibilities for preparing and
implementing privatization are spread over a large number of
government institutions and agencies. Some government bodies act in
different capacities on different occasions. For instance, the
Council of Ministers is entrusted with implementation tasks and
regulatory powers but it is also authorized to make operational
decisions on specific transactions…
Apart from faults in the legal framework of
privatization, there are also important subjective factors which
affect the implementation, or poor implementation, of privatization
procedures…"
The document was circulated to the National Assembly
Economic Committee, government officials, business representatives
and mass media.
Roundtable Discussion "Land Reform and
Development of Agriculture in Bulgaria", March 5
The roundtable discussion was attended by Members of
Parliament, representatives of the Ministry of Agriculture and Food
Industry and other government institutions, the Council of
Agricultural Cooperatives in Bulgaria, independent experts and
representatives of the academic community.
CSD's experts reiterated the importance and priority
of agriculture for the Bulgarian economy, and the need for a
long-term government policy. Participants rallied around the idea
that Bulgaria should move from the stage of declarative intentions
to pragmatic decisions without unnecessary politicization of the
question of land ownership and the future agriculture
structure.
Thirty copies of the general overview of discussions
and recommendations were sent out to all members of the National
Assembly Economic and Agriculture Committees and the Ministry of
Agriculture and Food Industry.
Workshop "The Role of Bulgarian and Foreign
Consultants in the Privatization
and Restructuring Process", July 9
As an acknowledgment to its contribution to the
privatization process in Bulgaria, CSD was invited by the Bulgarian
Association for Management Consulting to co-organize this workshop,
which addressed the problems of consultants’ participation in the
privatization process and restructuring of Bulgarian economy.
CSD presented the results of its four-year work on
mass privatization. Discussions focused on breaches in the legal
framework and recommendations for amendments to existing
regulations.
3. Building Public Support for Mass
Privatization
"The Wealth of the Nation"
CSD experts helped design the model of a game called
"The Wealth of the Nation". It simulates the stages of mass
privatization and helps both to educate the participants and to
monitor potential mass privatization behavior.
Approximately 10,000 students from Sofia
participated in the game. A general report on the game with
conclusions and recommendations was submitted to the Center for
Mass Privatization, privatization funds and consulting firms.
Brochure "Mass Privatization: Investment
Alternatives"
The brochure was published with the goal of
educating the public in investment decision-making. It addresses
both specialists and the broader public, and assists the readers in
making right investment choices. The brochure was disseminated
among Members of Parliament, mass media, investment funds, relevant
ministries, government agencies and municipal authorities.
Seminar "Contemporary Corporate Governance:
Particular Applications
to Bulgarian Privatization Funds and Enterprises
in Process of Privatization",
June 11
This seminar, organized jointly with the Citizens
Democracy Corps and the Finsys consulting firm was attended by 50
participants у managers and representatives of more than ten
privatization funds, government officials, journalists and
academics.
Mr. Geoffrey Mazullo, CDC Volunteer and expert in
corporate governance and post-privatization management with
extensive experience in CEE and Russia, addressed the three major
contemporary models of corporate governance (the Anglo-US, Japanese
and German) and some specific corporate governance issues in
transitional economies.
At a separate session Dr. Maria Prohaska, CSD
Economic Program Coordinator and Dr. Nikola Hristovich, President
of Finsys chaired a discussion on the legal framework of mass
privatization in Bulgaria and its implications for corporate
governance over the next two to three years.
4. Monitor of Privatization and Foreign
Investment
CSD continued to publish its monthly Monitor of
Privatization and Foreign Investment (in Bulgarian) and prepared
two special issues in English. One of them was published to
coincide with the annual meeting of the EBRD in Sofia in April.
In 1996 new sections including analytical materials
and statistical data on privatization and foreign investment in
Bulgaria were added to the Monitor. It was distributed in a
circulation of 150 copies to politicians, Members of Parliament,
ministers, government officials, trade union leaders, bankers and
major media.
In a survey conducted among readers of the Monitor,
CSD's project was assessed as an important oversight mechanism
which keeps the public informed on recent developments in
privatization and promotes transparency and clarity of the "rules
of the game".
Since October, the Monitor is also available, once
in two months, on the World Wide Web. The online edition contains
English translations of press articles which summarize the main
trends and results of privatization.
Public Opinion Polls
As part of its "watchdog" function, CSD conducted
two national public opinion polls and two qualitative surveys to
provide relevant background information on current developments in
public attitudes towards, and behavior concerning
privatization.
Results from the surveys provided grounds for
comparative assessment of the public involvement in mass
privatization and served as a basis for defining practical
actions.
Survey information generated considerable interest
among representatives of privatization funds as it helped in
establishing the parameters of their activities in attracting
privatization vouchers.
5. Dissemination and Media Impact
Economic Reforms Around the World
This is a collection of articles selected from
issues of the Economic Reform Today journal - a publication of the
Center for International Private Enterprise in Washington, D.C.
which monitors the major trends and outcomes of economic reforms
world-wide.
Different articles discuss the relationship between
democratic changes and the success of economic reforms, the
importance and role of business associations in contemporary market
economies and the outcomes of privatization in Central and Eastern
Europe. An article "Bulgaria: Summing up of Privatization" by Dr.
Maria Prohaska, Coordinator of the CSD Economic Program is also
included.
Published in a circulation of 1,000 copies, the
collection was disseminated among Members of Parliament,
professionals, government officials, academics and journalists.
Media Coverage
In 1996 project activities were brought closer to
the public through different media channels у TV, radio, daily and
weekly newspapers and magazines. The media coverage was designed to
reach two major target groups - policy-makers, experts and the
business community, on the one hand, and the general public, on the
other. With the purpose of reaching the first group, CSD published
35 articles on the legal framework and procedures of privatization,
corporate governance, privatization funds management and other
professional topics in selected newspapers and magazines -
"Standart", "Pari", "Capital" and "Cash". Another set of articles
of a more general nature was published in newspapers with wide
circulation ensuring coverage of about 50-70% of the country's
population aged 18 and over - "24 Hours", "Kontinent" and "Trud".
In addition, the project activities were covered in 11 broadcasts
on radio and television.
Extensive coverage of the progress of privatization
by the media has given CSD excellent exposure and increased public
awareness of its activities.
III. Privatization and Economic Restructuring in
Bulgaria
In September, CSD launched a new project
"Privatization and Economic Restructuring in Bulgaria", sponsored
by the Center for International Private Enterprise (CIPE). The
project is to be implemented until September 1997. Its main
objective is to contribute to the acceleration and success of
privatization and economic restructuring in Bulgaria. Through
research, advocacy and dissemination activities, the project:
- assists in refining and implementing the mass
privatization program to make it more effective, transparent and
successful;
- provides continued assistance to government
institutions responsible for privatization in developing a
consistent privatization strategy with medium-term targets and
structural priorities;
- facilitates privatization at the municipal level
by transferring best practice models to other regions;
- increases expert and public understanding in
post-privatization and corporate governance issues through
education and information activities.
The research and advocacy activities in 1996 were
based on the understanding that the future of Bulgarian economic
reform would depend largely on the success of privatization. The
following couple of years will be crucial in this respect. Failure
now would mean starting economic reform all over again.
Unfortunately, privatization in Bulgaria is often seen as an end in
itself. There is little understanding of its significant role as
the core of economic structural reform.
CSD's activities during 1996 focused on supporting
the government institutions in their efforts to implement an
effective, transparent and successful privatization program.
Specific actions included:
International Conference: "Restructuring
Transitional Economies in the 90 s: Enterprise Behavior and
Financial Intermediaries", October 11-13
Access to advanced international expertise and
know-how is crucial to the successful restructuring of the
Bulgarian economy. This conference was conceived with the objective
of introducing Bulgarian officials to the results of economic
restructuring in Central and Eastern Europe (CEE) and its
relationship to privatization, the role of financial intermediaries
and the development of capital markets. The conference identified
restructuring outcomes at different stages of reforms;
outlined the advantages of the different types of
restructuring in some CEE countries and related them to specific
background factors and respective policies;
explored the relationships between enterprise
restructuring and banking sector liquidity and defined alternative
solutions.
It was a joint initiative of CSD and the East-West
Economic and Financial Center. Participants included academics,
policy makers, bankers, enterprise managers and investment funds
managers who discussed the challenges of the transitional period
and the consequences of privatization and restructuring in CEE
economies. Also present were prominent experts and analysts of the
economies in transition from Austria, Great Britain, France, Italy,
Greece, Canada, the US, Albania, Macedonia, the Czech Republic, and
Bulgaria. Among them were Mr. Sol Estrin (London Business School),
Mr. Jean-Louis Brille (National Institute for Economic Studies and
Statistics), Mr. Ioanis Katzulakus (Athens Institute of Economic
Research), and Mr. Robert Kennedy (Harvard Business School).
The fact that some CEE countries have performed
better than Bulgaria in terms of number of privatized entities has
drawn the attention of many Western analysts. One of their
objectives is to study the post-privatization behavior of the
formerly state-owned enterprises from the point of view of the
volume of production, market share (in-country and export),
competitiveness, management changes, employment and several other
indicators. While some general conclusions have already been made,
a complete and accurate picture is still to be developed.
The conference drew an important conclusion with
respect to the adaptability of enterprises in CEE countries to the
market environment. The highest degree of adaptability is
demonstrated by the newly established private companies, followed
by enterprises owned by outside investors (particularly foreign
investors) and workers/managers owned enterprises. This should be
taken into serious consideration in shaping the privatization
strategy. Bulgaria should also devote greater attention to studying
the role of financial intermediaries in enterprise
restructuring.
The foreign participants were briefed on the results
of privatization, the mass privatization program and the trends in
capital markets development in Bulgaria. The prevailing opinion was
that the conference had been very timely in light of the structural
changes in the country.
Implementation of Training and Public-Awareness
Actions on Issues of Corporate Governance
Corporate governance is a term used to define the
mechanisms of governance of joint-stock companies. As a concept, it
is relatively new to Bulgaria but it will gain significant
importance upon completion of the mass privatization process. It is
also important from the viewpoint of structural reforms and their
successful implementation.
In this context, CSD is among the first
organizations in Bulgaria to prepare and implement a program for
dissemination of information and training of selected professional
groups and the general public on the issues of corporate
governance. Specific actions in the program include:
study visits to the Czech Republic, Poland, Russia
and Moldova to explore the problems of post-privatization
management of enterprises, the role of privatization funds and the
implementation of Western models of corporate governance in
transitional economies;
workshops to formulate the major problems and trends
in the future model of corporate governance in Bulgaria;
town hall meetings to spread information on
practical topics such as shareholders rights, proxy voting and
models of corporate governance; and broad media coverage.
Public Opinion Surveys
A series of sociological surveys on public attitudes
towards privatization are projected within the framework of this
project. They are carried out in cooperation with CSD's
Sociological Program/Vitosha Research.
In the current economic situation in the country,
few organizations have the resources and expertise to perform a
privatization watchdog function in a consistent and reliable way.
CSD has persistently monitored the progress of privatization over
the past six years and considers this to be an important vehicle in
implementing its public service objectives. Its strong reputation
for independence and objectivity have made its survey research
findings a reliable and respected source of information.
The first of the series national sample opinion
surveys was conducted in October to monitor public attitudes
towards different forms of privatization and its results. On the
basis of the collected empirical data, CSD was able to draw
analyses on the progress of privatization and on emerging attitudes
of different social groups. The survey results were summarized in
separate analytic papers which were provided to the relevant
government agencies and published through a variety of media.
IV. Migration - Europe's Integration and the Labor
Force Brain Drain
At the beginning of 1996 CSD finished this two-year
international research project which examined the brain drain from
Bulgaria with a view of identifying the scientific and economic
consequences from the migration of scientists and experts. The
project, supported by the Commission of the European Communities,
involved 14 research teams from ten Central and East European
countries including Poland, Hungary, Lithuania, Latvia, Estonia,
the Czech Republic, Slovakia, Romania, Slovenia and Bulgaria,
coordinated by CSD.
The transition to a market economy and the
democratic changes taking place in Bulgaria since 1989 have had a
particularly adverse effect on science. The fall in production and
the continuing economic crisis have limited dramatically the use
and exploitation of research results. The state budget allocates
very little funding to science and R&D. The stage of development,
nature and size of the SME sector is such that it is still unable
to support R&D. The lack of a clear government strategy or program
for promoting the development of science has resulted in a
large-scale emigration of researchers which aggravates the
intellectual potential of the country.
This project produced the first comprehensive study
of the brain drain process from Bulgaria. The survey findings
became the object of broad public discussions on the problems of
science and researchers, the government strategy and specific
actions which need to be taken to safeguard the intellectual
potential of the country and mobilize this resource in overcoming
the current economic situation.
It was also the first attempt at providing a
comparative analysis of developments in Bulgaria and other CEE
countries, which helped outline some typical migration problems
that are particularly acute in this country.
The final survey report was provided to the
Bulgarian Academy of Science, the Ministry of Education and others.
It generated high interest among Bulgarian print and electronic
media. Radio Free Europe broadcast a three-hour interview with the
authors on the problems of Bulgarian scientists and experts’
migration.
The Commission of the European Communities assessed
highly the Bulgarian report and decided to publish it in full
form.
V. MBA Enterprise Corps
MBA Enterprise Corps is a program designed to
provide long-term assistance to private enterprises in former
socialist countries by directly placing Corps members into
companies or small business development consulting groups. It also
gives graduate MBAs from leading US universities the opportunity
for an early and significant international experience in order to
enhance their chances of long-term global effectiveness. Corps
members spend one to two years with the host companies, helping
them streamline their operations, develop business plans, establish
marketing programs, launch new products, negotiate joint ventures
and train employees.
The four Corps members who started work with their
host companies in October 1995 completed their assignments at the
end of September 1996. All of them provided valuable assistance to
the companies.
Three Corps members are currently working with
Chimimport, the Marketing, Advertising, Research and Communications
Company MARC and the Vitosha Agency.
In 1996, the main highlight of the MBA EC program in
Bulgaria was its participation as a founding member in the Firm
Level Assistance Group (FLAG) Consortium and the structuring of its
operations. FLAG unites seven US non-profit organizations that have
pooled their resources to provide high impact technical assistance
to private business and business associations in Bulgaria. It
comprises the Citizens Democracy Corps, International Executive
Service Corps, Volunteers in Overseas Cooperative
Assistance/Agricultural Cooperative Development International
(VOCA/ACDI), Land O’Lakes, University of Delaware, Partners in
International Education and Training/Entrepreneurial Management and
Executive Development International (PIET/ EMED) and MBA Enterprise
Corps. FLAG was formed in response to the US Agency for
International Development's re-engineering program based on the
premise that a more integrated approach to private sector
intervention could be obtained by focusing the experience and
resource of the group on targeted clients. MBA Enterprise Corps is
represented in all FLAG bodies and successfully adapted its
internal procedures to FLAG mechanisms.
International Business Club
The International Business Club (IBC) is a joint
initiative of CSD and the Ministry of Trade. It was formally
inaugurated on June 17, 1993 by Mr. Valentin Karabashev, Deputy
Prime Minister and Minister of Trade, in the presence of
ambassadors, diplomats and trade envoys to Bulgaria, along with
bankers, and managers of local and international companies.
The principal objective of IBC is to encourage
business contacts, to popularize business opportunities in
Bulgaria, and to promote a favorable development of trade and
foreign investment. Since its conception in 1993, IBC has organized
26 breakfast meetings to which it has invited cabinet ministers,
MPs, managers of financial institutions and private businesses as
guest speakers.
The speakers of the IBC meetings in 1996 were:
Mr. Lyubomir Filipov, Governor of the Bulgarian
National Bank, on February 22;
Mr. Stefan Sofyanski, Mayor of Sofia on April 5;
Dr. Luybomir Dachev, Deputy Minister of Education,
Science and Technology, on April 14;
Professor Zakhari Karamfilov, Chairman of the
National Statistical Institute, on June 6;
Mr. Vesselin Blagoev, Executive Director,
Privatization Agency, on October 18.
Members of 42 diplomatic and trade missions to
Bulgaria, along with 10 international organizations and foreign
companies based in Sofia have attended the International Business
Club to date. Bulgarian businessmen and bankers are regular
visitors too.
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