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Economic Program - 1996
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


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


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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II. 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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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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