Playing uncle to Bulgaria

August 1, 1997

FOLLOWING the success of the Union of Democratic Forces in general elections earlier this year, it looks possible that Bulgaria may start making reforms in earnest.

A United Kingdom Know How Fund (KHF) project is being established to support management development in Bulgaria with a Pounds 700,000 investment to support training awards and institutional links.

When Cranfield University was appointed to manage the Training Awards and Institutional Links (Trail) project in December 1996, Bulgaria was in political and economic turmoil and the banking system was in a state of virtual collapse.

In the November 1996 elections, the socialist president lost to the opposition's Petar Stoyanov. We then made a last-minute visit to Bulgaria to assess the situation and recommend priorities.

These visits took place in January and February and we could not have chosen a better time. In January, daily mass protests were being held in Sofia calling for the resignation of the socialist government and the dollars in our pockets were becoming more valuable by the hour.

When we left Sofia, it was possible to get enough lev to pay our bills only by clearing out three bureaux de change (getting an ever-increasing rate as we proceeded). Inflation had risen to an estimated 47 per cent per month.

Towards the end of January the crisis deepened. Long queues formed outside banks and exchange bureaux as Bulgarians sought to change their savings into, often, just a few dollars. A general strike was called and students and other groups blocked the roads into Sofia.

A senior Cranfield team member was with the deputy mayor when one of these crises erupted, and witnessed the "City Hall" response to the southern bridge having been "taken", the reporting of the event by Radio Darik and the subsequent "recapture" of the bridge by the establishment.

Changing money became an important part of the day's activities. One morning when we needed some local currency we were offered 800 lev to the USdollar at breakfast (8am), and 1,100 when we started work at 9am. We eventually got 1,350 at 11am. It was just a pity we did not wait until tea time when the rate was 1,500.

It was clear that the economy was in a state of crisis and something had to give. It did. In February the government agreed to hold a general election by mid-April and handed over to a UDF-led caretaker government for the intervening period.

The events of January and early February were no doubt good dining-out material for foreigners, but it is sobering to see the practical effects of a currency in meltdown and an economy in profound crisis.

Now that the country is in the hands of a government more committed to implementing the reform process, there is some hope that Bulgaria can get back on track. Already inflation is dropping and the currency's value is recovering.

All the indications are that now is a critical time for Bulgaria and its reform process, and that the decisions taken at central government level, particularly the actions implemented over the next six to 12 months, will determine the conditions for economic recovery. It is in this context that Cranfield is implementing the Trail project.

A more stable political and economic climate also means that our project has a better chance of assisting the reform process by helping to change attitudes and impart a deeper understanding of market economies and democracies to a range of institutions and specialist management areas.

The structure of organisations in command economies has created a mind-set which resists both decision making and change, two key elements necessary for any organisation to succeed in a market economy. Now that the reform process is starting, managers within public and private sector organisations will have an even greater need to acquire new skills and learn how to apply them within a new and perhaps alien system.

A precursor to management development in Bulgaria, as in other transitional economies, is an appreciation of management systems within other economic, political and social contexts. Analysis and comparison is also needed to develop an understanding of what management could be today.

Over the next three years, the Trail project aims to provide this by funding training awards in the UK for individuals and groups of Bulgarian managers, and by funding institutional links for those awards that prove most successful.

The challenge will be to select those training or link proposals which will provide a sustainable output. Support has been limited to a few key sectors, namely, public administration (especially at the local/municipality level); economic reform (selected support to key central government organisations); social sector reform (education, labour, welfare, health and non-government organisations) and of the environment and natural resources development.

In order for the project to be effective, those who receive funding will have to demonstrate a real commitment to the reform process, show that they have (or will potentially have) a significant role to play in it and that they are willing and able to implement change strategies.

The project is intended to be genuinely national in scope and not biased towards Sofia-based organisations and individuals, and Cranfield staff have travelled widely throughout the country promoting the scheme and finding out what are the main management development challenges facing local administrations, development agencies and NGOs.

UK organisations that become involved, either as training providers or link partners will need to demonstrate their enthusiasm and commitment by developing courses and training programmes that are appropriate to the needs of the recipient and which have realistic and sustainable outcomes.

Cranfield will be steering the project, in collaboration with the KHF and its advisers, in order to get the best possible "value for money".

We will be keeping a watchful eye on developments in Bulgaria and aligning the projects' priorities to achieve this. As always, funds are limited, but maximum impact is expected.

Carol Cairns is coordinator of the Trail project at Cranfield University.

For further details call 01525 863347 (fax 01525 863344, email TRAIL@cranfield.ac.uk), orin Bulgaria, contact Monika Koubratova, tel/fax +359 2 9559749. email: trail-bg@mail.techno-link.com

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