BULGARIA

25 August 1998

OBSERVATIONS AND RECOMMENDATIONS

1. I made the decision that I would not impose my ideas concerning what needed to be done by companies or the community and would work only on issues that were brought to me. I continue to believe that this was the correct approach; if I had dictated what was important it would have been resented and not sustainable after I left. However, my decision resulted in not being asked to provide much consulting.
2. The general attitude of the business community is that they know everything that they need to know about their business and the only thing that they need is more money. This is generally true of local government people also; advice is not needed, they just need more money and they will be able to develop the economy. Such money should be given to them freely, under few restrictions, an on very liberal terms. Maybe the best way to describe it is that the banks and other financing sources are expected to operate like the government did under Communism i.e. providing funding to firms to keep them open even if they can not make a profit.
3. The general business environment in Bulgaria has changed very little since 1989. There is a lot of talk about privatization but little action. Also, most companies that have been privatized would not be considered so by most observers in the United States. The Bulgarian national government retains a significant share of almost all companies that have been sold; less than a majority share but what could be considered a controlling interest.
4. Many of the privatization deals that have been closed so far have been management/employee buy outs. I believe that most of them will eventually fail. I do not think that management has become more adept at management nor have the workers become more productive just because they are now share holders. If the company was having problems as a State owned company I believe that most of those problems will continue. Management/employee buy outs in Bulgaria are generally used as a method to guarantee continued employment and have little to do with making the company more efficient or more profitable.
5. State owned companies, and many privatized ones, provide governmental social services. i.e. subsidized housing, meals, transportation. As the economy changes this practice will change and place more of the cost on local government.
6. The recent efforts to begin economic development planning by the CDIC is a worthwhile effort but is very constrained by the State. The basic governmental structure of Bulgarian government has not changed since 1989. Local government receives aproximatly 90% of its operating funds from the State and has very little opportunity to acquire developmental funds at the local level. The economic development of Bulgaria, and therefore local economic development, continues to be centrally planned. Now by a democratically elected Parliament that may change every four years, or sooner, that may then redirect economic efforts and funds.
7. It seems to me that Zlatograd would be better served by advocating a change in the way local government is funded rather than trying to change which political region it may be in. There may be some current advantage in one Region over another but I believe it is the funding system is in need of reform in the long term. Without such reform local government will always be dependent upon beneficent funding by State and Regional government.
8. I am also of the opinion that economic development in Zlatograd is focused upon maintaining the status quo. I believe that it may be more worthwhile to concentrate on the question, what could we do if all the major employers today were to go out of business? I am also somewhat concerned that most of the 'planners' have a vested interest in maintaining the status quo rather than providing imaginative thinking to the process. I would suggest that outside consultants be utilized to overcome this bias that is only natural to be present.

1. I would recommend that the Assistants be provided with the opportunity for formal computer training in Word and Excel. Both Assistants that I worked with had some knowledge of Word but minimal at best and almost no knowledge of Excel. Furthermore, all staff members should become better trained on file maintance. The Director should also establish file retention policy. Something saved is worthless if it cannot be retrived because there is no established policy for filing like documents. It is also a waste to save documents that will never be used again.
2. The most obvious failing that I saw of both Directors was the lack of information sharing with Assistants. Many times the Assistants did not know what was being worked on by the Director. In almost all cases if the Director were to attend a conference or seminar for professional development or simply to gather information this information was not shared. I would recommend that more effort be made by the Directors to keep Assistants informed and to develop their skills. The best measure of how good a job the boss is doing is how well the office functions when he/she is gone. A well trained and well informed staff is a step in the right direction to making the office function well.
3. I would also suggest that the CDIC establish computer classes for the community. I believe that the demand for such classes is as strong as for English classes and may offer opportunities to 'cross sell' all classes. The CDIC could also make its computers available to the High School Computer class on a more formal basis as a contribution to the community.
4. I would also suggest that more time and effort be made by the CDIC to get college information to graduating students. Not just to have information available at the Center, but perhaps 'market' that information by speaking to students at the school or a Cable TV announcement. Perhaps become more knowledgable about scholarship sources within Bulgarian universities and in Europe. Maybe act as the catalyst to secure money that could be used as a scholarship fund in the name of the CDIC or the Town of Zlatograd, admininstered by the CDIC.
5. Changing attitudes, providing information and educating the community could be of considerable benefit to Zlatograd as well as the CDIC. I recommenr that the Center do more active educational projects; perhaps using TV of the local news paper to reach as large an audience as possible.
6. Which brings up the bigger issue; what should the CDIC be doing? It appears that it is trying to be all things to all people. It seems to undertake any project for which grant money can be obtained. The over all strategy has seemed to be to work on those things that the primary USAID sponsoring grant required, but only enough to keep the grant monies flowing. There has been little commitment to some of the 'business plan' goals originally set out under the LGI funding and I do not suggest that there should have been more commitment. What I do recommend is that the CDIC become more focused in its purposes and work very hard on those things that it decides to be important for the long term.

1. The original USAID-LGI Business Plan included a goal of the CDIC becoming a Municipal Information Center; that is to say, the Center would disburse information about what the Municipality is doing. I understand the objective of this goal but personally I am happy that the Center has done very little to effect this goal. It is my belief that the Center should work WITH the Municipality to accomplish common goals but not work FOR the Municipality. It is too easy for the citizens of Zlatograd to believe that the Center is a part of the Municipality without reinforcing that idea. I think that the Center should be very careful and not tie itself to closely to the Municipality. One of the reasons for establishing a NGO is to provide some continuity of purpose that the political offices of the Municipality can not provide because of the election process. There is also the danger that any scandals that the Municipality may become involved in will also damage the NGO if they are closely connected in the minds of the citizens.
2. There is considerable talk about tourism in Bulgaria, and in Zlatograd, but unfortunately most Bulgarians have traveled so little that they have a poor concept of what tourism is throughout the rest of the world. The most important concept regarding tourism is that people travel to a place because of its natural attractions or man made attractions; that is they go to the place because there is something to SEE or Do when they get there. I suggest that Zlatograd is not a place for tourist but rather a place of retirement. By this I mean that it is a place that people can come to for a short or long period of time and retire. To retire meaning to withdraw to a place of privacy, shelter, or seclusion which suggests serenity and peace. The people of Zlatograd speak of it being such a place of serenity, peace, quiet and beauty but all those qualities are being destroyed by the very people that speak of them so highly. The beauty is being destroyed by the overcutting of the forests for export or for heating local homes; and by the overgrazing of the land by too many animals for it to support. The peace and quiet of the area is being violated by noise pollution from the same sources that people seeking solace here are trying to escape i.e. noisy neighbors, barking dogs, noisy restraints/clubs and increased traffic. The pure air is polluted by the burned wood of the forest and the dirt thrown into the air by increased traffic. The beauty of the area is also violated by a citizenry that has little pride in its appearance; dumping trash along its roads and littering with no thought of the visual pollution they are causing. If Zlatograd emulates the "developed" towns of Bulgaria, and the world, it will destroy the reasons for people wanting to retire there. Perhaps all of these issues are worthy of efforts by the CDIC for future projects?
3. Finally, I am not sure that anything will be accomplished in Bulgaria, or Zlatograd, unless the citizenry develop virtue. The definition of virtue that I use was written by Tocqueville in "Democracy in America"; 'virtue is the moral power which each individual exercises upon himself and which prevents him from violating another's right'. I believe that such virtue is lacking in Bulgaria and unfortunately we are losing it in the United States. I further believe that historically such virtue has been imposed or taught and is not something that is in the basic character of man. Such impositions or teachings diminish freedom but without it I believe there is only chaos and a democratic, market driven economy will not survive.