Small and Medium - Sized Enterprises, Migration and Brain Drain
1996 Highlights
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.
A. 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 ? 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.
B. 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.
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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
? 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 ? 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
? 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.
5. 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.
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III. 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.
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IV. 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.
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V. 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. | 
