A m e r i c a n C h a m b e r o f C o m m e r c e i n B u l g a r i a

h o m e p a g e : w w w . a m c h a m . b g e - m a i l : a m c h a m @a m c h a m . b gBus in e s s Pa rk So f i a , M lados t 4 A re a , Bu i l d ing 2 , F lo o r 6 , 1 7 1 5 So f i a

Te l . : ( 3 5 9 2 ) 97 6 9 5 6 5 Fax : ( 3 5 9 2 ) 97 6 9 5 6 9

AmCham SkiTournament

Hummus andHuntington

11 Billion Euro Squabble

Mediation Center

ToastmastersClubWelcomesAmbassadorBeyrle

i s s u e 6 7m a r c h 2 0 0 6

E-Government in Bulgaria

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e d i t o r i a l

Dear Members and Friends: Dear Readers:

I visited our Deputy Editor-in-Chief

Christopher Karadjov at his home in Long

Beach, Calif., at the end of February. He

teaches at the journalism department of

California State University, Long Beach.

One day, while we were sitting with our lap-

tops sorting out some AmCham Magazine

e-mail, his 16-year-old son George asked,

"How did you guys manage to do anything

before the Internet?"

This typical teenager, who has grown up

with the convenience of the worldwide

electronic information networks, was sincere in his question.

He could hardly imagine a life when the home computer was

nothing more than a decorous typewriter. (He would not even

ask about the life BEFORE computers!)

I am not talking here about browsing for fun, but about all the

business tasks you can accomplish online. My own digital sig-

nature is in the making, and I promise never again to visit the

tax authorities in person for payments or paperwork - instead,

I will do my business with the National Income Agency from

my office PC.

This agency is one of the few sectors of Bulgaria's electron-

ic government that actually work. It is convenient and easy.

The Finance Ministry's web site also offers a lot of useful

information. Yet the rest of the government and local author-

ities have a long way to go before we start doing our busi-

ness with them without waiting in long lines or scaling the

steps of public buildings.

Marina Tsvetkova's article on Page 4 will tell you about the

current state of e-government in Bulgaria. As usual, private

businesses are way ahead in this respect. Almost all

Bulgarian financial institutions offer online banking, which is

extremely convenient, as you well know. This technological

development happened within the span of two-three years,

because private businesses understand how important is to

keep their savvy customers satisfied.

I hope Bulgaria's government at all levels also regards citi-

zens' convenience and satisfaction to be a sufficiently impor-

tant factor in speeding up the entry into the WWW age.

Bulgarian businesses are desperately waiting for a better way

to interact with the authorities on routine matters. To say that

Internet has not penetrated Bulgaria - as some do - and

therefore an electronic government is not a priority, is plainly

ridiculous. Everybody is online now - even if they grew up

surrounded by typewriters.

Yours truly,

Milen Marchev

Editor-in-Chief

I am afraid I have bored you to tears with

my reiteration of the fact that most of

AmCham's recent activities have been

marked by Bulgaria's accession to EU.

This is the most important issue for the

country, however, so we at the Chamber

follow the accession process persistently

through useful business initiatives.

For instance, our AmCham Mediation

Center provides not only another alterna-

tive to settle commercial disputes, but a

mechanism to overcome the inefficiencies

of the present judicial system as well. Isn't that in line with what EU offi-

cials would like to see from Bulgaria - implementing effective measures

to improve the business climate in the country? Yet another story of

this kind has been AmCham's participation in the public hearings on the

commercial registration law. It gave a proof of our commitment to

improving the regulatory framework for a business-friendly registration

regime. Such a reform is not only necessary but also in line with

Bulgaria's EU accession and the implementation of the Lisbon agenda.

Our joint EU Affairs and Real Estate Committee event showed that we

are on the right track in presenting our members with useful informa-

tion on the so-called structural funds and infrastructure programs of

the European Union.

We took part in the regular AmCham EU briefing sessions in Brussels

for ECACC members in exploring current European Union policy issues,

and discussing ways in which the AmCham network in Europe can col-

laborate on policy and lobbying activities. During a meeting with the

Bulgarian ambassador to the EU, H.E. Stanislav Daskalov, the Chamber

discussed ways to co-operate with the Embassy in facilitation of the

dialogue between the business community and EU institutions.

Even though our February agenda was once again dominated by EU

issues, we managed to squeeze in a number of other interesting

events.

The Toastmasters Club was honored to host U.S. Ambassador Beyrle

with his outstanding speech on leadership. The mere fact that the

ambassador took so much time to be with our members and discuss

different issues with the business community shows once again the

strong relationship between the Chamber and the Embassy.

We held our big winter sport event at the end of the month - AmCham

Ski Tournament, which also coincided with the close of the Olympic

Games in Turin. Our competition was as stiff as that at the games. I

am especially happy that the children's ski run became such a huge

fun - who knows, we might have witnessed a future Olympic champi-

on there?

Best regards,

Valentin Georgiev

Executive Director

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Publisher

American Chamber of Commerce in Bulgaria

Business Park Sofia, Mladost 4 Area

Building 2, Floor 6, Sofia 1715, Bulgaria

e-mail: amcham@amcham.bg

www.amcham.bg

Editor-in-Chief

Milen Marchev

Deputy Editor-in-Chief:

Christopher Karadjov

Senior Editor:

Irina Bacheva

Layout, Design & Printing:

Milen Marchev

Writers:

Boyko Vassilev, Marina Tzvetkova,

Mina Georgieva, Panayot Angarev,

Yuliana Boncheva

Advertising

AmCham Bulgaria:

Nadejda Vakareeva, nadia@amcham.bg

AmCham Bulgaria Magazine:

Milen Marchev, milen@milenmarchev.com

The AmCham Bulgaria Magazine reaches a broad audience

of AmCham members, leading US, Bulgarian and internation-

al companies, US and Bulgarian decision-makers, all

AmChams around the world.

Subscription is free of charge. If you would like to subscribe

to AmCham Bulgaria publications, please contact the

AmCham Bulgaria office.

i s s u e 6 7m a r c h 2 0 0 6

AmCham Bulgaria Magazine is a primary forum for political and economic analyses, news, viewpoints as well as for the presentation of new business oppor-

tunities. The articles in the AmCham Bulgaria Magazine express the opinions of the authors and do not necessarily reflect the position of the American

Chamber of Commerce in Bulgaria.

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a m c h a m b u l g a r i a

3M (East) AG . AA KRES EOOD . ABB Bulgaria Ltd. . AbCRO - Bulgaria . AccorServices Bulgaria . ACSIOR . ADIS Ltd. . Advance International Transport (Balkan)EAD . AES Corporation . AFA OOD . AGS Bulgaria Ltd. . AIG Bulgaria Insurance& Reinsurance Company EAD . AIG Life Bulgaria . AIMS Human Capital . ALEXAN-DROV GROUP CORPORATION . Allan Collautt Associates, Inc. . Allied Pickfords Bulgaria. Alter Ego Company OOD . American College of Sofia . American ConstructionProducts JSC . American English Academy . American University in Bulgaria (AUBG) .Anglo-American School of Sofia . Anton Preslavski, Liebert Hiross . APIS - BULGARIALtd. . APOLO Ltd. . Argento Human Resource Solutions . Aries Commerce . AshtromInternational AD . Association of Bulgarian Broadcasters - ABBRO . AT Engineering 2000Ltd. . Auditing Company Versi and Partners Ltd. . Avendi Ltd. . AVON CosmeticsBulgaria Ltd. . Balkan News Corporation Plc. . Balkan Star . Baxter AG . BayerBulgaria EOOD . BearingPoint, Inc. . BG Radio . BMG Ltd. . Bodyguard-Fire-K Ltd.. Borislav Boyanov & Co. . Braykov's Legal Office . Bristol-Myers Squibb . BrownForman Beverages Worldwide Sofia Branch LLC . BULBANK . Bulgarian AmericanEnterprise Fund . Bulgarian Charities Aid Foundation (BCAF) . Bulgarian Post Bank .Bulgarian Telecommunications Company EAD . Business Media Group . Business ParkSofia EOOD . CA IB Bulinvest . CableTel . Car Rental Bulgaria Ltd. . Cefin BulgariaEOOD (IVECO dealer) . Center for the Study of Democracy . Chelopech Mining EAD .Cisco Systems Bulgaria . Citibank N.A.- Sofia Branch . City University . ClockworkLtd. . CMS Cameron McKenna EOOD . Coca-Cola Bulgaria EOOD . Coca-Cola HBCBulgaria SA . COLLIERS International . ConsulTeam Recruitment and Selection Ltd. .Cook Communications . Corstjens Worlwide Movers Group . CPM International Ltd. .Curtis / Balkan Ltd. . DeConi M&A . Deloitte Bulgaria EOOD . DHL Express BulgariaLtd. . Diageo Bulgaria Ltd . Diamed Ltd. . Dimitrov, Petrov & Kalaidjiev . DIMONBulgaria . Djingov, Gouginski, Kyutchukov, & Velichkov . Dobrev, Kinkin & Lyutskanov LawFirm . Domaine Boyar AD . Dr. Emil Benatov & Partners . Dr. I.S. Greenberg MedicalCenter, Ellen Ruth Greenberg, Ph.D. . DynCorp International LLC . Effekten Und Finanz -Sofia AD . Electron Progress AD . Eli Lilly and Company . Elido (Lamel Ltd.) . ElmekSport Bulgaria EOOD . Elta consult AD associated partner of CB Richard Ellis for Bulgaria. Emerson Process Management AG . Encouragement Bank AD . EngineeringserviceSofia Ltd. . Equest EAD . ERATO HOLDING PLC . Ernst & Young Bulgaria . ExpoTeam Ltd. . Flying Cargo Bulgaria Ltd. - Licensee of FedEx . Force Delta Ltd. . ForemConsulting Bulgaria . Forton International JSCo . General Electric International .Genmark Automation Bulgaria . GiTy Bulgaria ltd. . GlaxoSmithKline . Goodyear DunlopTires Bulgaria . Grand Hotel Sofia . Grenville . Grey Worldwide Bulgaria EOOD .Group 4 Securitas (Bulgaria) OOD . Hewlett-Packard Bulgaria Ltd. . Hilton Sofia .Honeywell EOOD . Horizon . HVB Bank Biochim AD and HEBROS Bank AD . IBMBulgaria . Ideal Standard Bulgaria . In Time Ltd. . Infoguard - Stefan Nedkov . INGBank Sofia Branch . Intel Czech Tradings, Inc. . Interbrands Marketing & Distribution Inc.OOD . Interdean . Investbank Plc. . IP Consulting Ltd. . ISI Emerging Markets(Internet Securities, Inc.) . Johnson & Johnson Doo. . Junior Achievement Bulgaria .Kaliakra AD . Kamenitza AD . Kamor Auto Ltd. . Kempinski Hotel Grand Arena Bansko. Kolbis International Transfer Corporation . KPMG Bulgaria . Kraft Foods Bulgaria .LANDMARK Properties Bulgaria . Lexim Sofia Ltd. . Lindner Bulgaria OOD . Lirex BGLtd. . Lowe Swing Communications . M & M Air Cargo Service BG OOD . M3Communications Group, Inc. A Hil & Knowlton Associate . Maersk Bulgaria Ltd. . MagneticHead Technologies . Maritza East III Power Company AD . Marsh EOOD . MARTERNEOOD . McDonald's Bulgaria Ltd. . Merck Sharp & Dohme IDEA Inc. . Meridian HotelsBulgaria OOD . Microsoft Bulgaria . Miltech Ltd. . Mmd, Corporate, Public Affairs &Public Relations Consultants . Mobiltel EAD . Monbat Plc. . Moten Sport . MotoPfohe Ltd. . Motorola Bulgaria EAD . National DISTRIBUTORS . NATO Defense CollegeAnciens' Association . NDT Equipment Supplies LTD . Net Is Ltd. . NeterraCommunications . Neumann International AG . New Europe Corporate Advisory Ltd. .Nexcom Bulgaria EAD . Opet Aygaz Bulgaria EAD . Oracle East Central Europe Limited- Branch Bulgaria . Orbit Ltd. . Orkikem Ltd. . OSG Records Management . PfizerH.C.P. Corporation, Representation Office Bulgaria . Pioneer Semena Bulgaria EOOD .Popov Legal Office . Pratt & Whitney . PricewaterhouseCoopers . Prima Soft Ltd. .Procter & Gamble Bulgaria . ProSoft . PSG Payroll Services Ltd. . Radisson SAS GrandHotel . Rising Force Co., Ltd. . Rockwell/Intelpack . S&T Bulgaria . SanteInternational OOD . Schering - Plough Central East - Bulgaria . SEAF ManagementBulgaria EOOD . Seplex Law Offices . Sheraton Sofia Hotel Balkan . Sherita M Ltd.. Sienit Ltd. . SigmaBleyzer Investment Group LLC - Representative Office . SoraviaBulgaria Ltd. . Stefan Dimitrov, Norman Management Co. Ltd. . TechnoLogica EOOD .TeleLink AD . Tero Halmari, European Bank for Reconstruction and Development (EBRD) .The Atlantic Club of Bulgaria . The Executive Centre . Tishman Management CompanyLtd. . Tissue Bank Osteocenter Bulgaria EAD . TM Auto Ltd. . TMF . TumbleweedCommunications EOOD . Unimasters Logistics Group AD . Unisys Bulgaria Branch .United Consulting Ltd. . Urban 2000 Ltd. . Vaptsarov Joint Stock Company . VectorManagement Bulgaria EOOD . Videolux Holding / Technopolis . VIP Security Ltd. . VISAInternational Service Association . VSK Kentavar Ltd. . Westinghouse Energy SystemsBulgaria Branch . Wrigley Bulgaria EOOD . Xerox Bulgaria Ltd. . Yavlena Ltd. . ZlatiDinev Studio in partnership with Outerbridge/Morgan .

Board of Directors

of the American Chamber of Commerce in Bulgaria

President Mr. Kenneth M. Lefkowitz NECA/Balkan Data, Inc.

Vice President Mr. Stefan Dimitrov Allied Pickfords Bulgaria

Treasurer Mr. Anthony Hassiotis Bulgarian Postbank

Members Mrs. Olga Borissova AUBG, Director European Programs

Mr. Borislav Boyanov Borislav Boyanov & Co

Mr. David Hampson Grenville Financial

Mrs. Tanya Kosseva Landmark

Mr. George Randelov IBM Bulgaria

Mrs. Elitsa Tsaneva Ideal Standard Bulgaria

Mrs. Maria Vranovska Eli Lilly and Company

Ex-Officio Member Mr. James Rigassio US Senior Commercial Officer

Executive Director: Valentin Georgiev

Contentsc o v e r s t o r y

Electronic Illusions, Bulgarian Style . . . . . . . . . . . .4

By Marina Georgieva

i n t e r v i e w

Bozhidar Danev:

Bulgaria's Economy Lacks Competitiveness . . . . .10

By Marina Georgieva

a n a l y s i s

11 billion Euro squabble . . . . . . . . . . . . . . . . . .14

By Yuliana Boncheva

t o u r i s m

Government Set to Fix Bulgaria's

Tourism Jumble . . . . . . . . . . . . . . . . . . . . . . .18

By Mina Georgieva

a n a l y s i s

Monthly Focus: External (Im)Balance . . . . . . . . . .22

c i v i l i z a t i o n s

Hummus and Huntington . . . . . . . . . . . . . . . . .24

By Boyko Vassilev

a m c h a m e v e n t s

AmCham Bulgaria

Meets AmCham EU . . . . . . . . . . . . . . . . . . . . .28

AmCham, Business Associations

Worried About Mining Project . . . . . . . . . . . . . .29

r e g u l a t i o n

European Standards: Mission Possible? . . . . . . . .30

Dr. Olga Borissova,Director, Centre for European Programs, American University in Bulgaria

Members Learn About EU Structural Funds . . . . .31

a m c h a m e v e n t s

AmCham Opens Commercial Mediation Center . . .32

AmCham Toastmasters Club

Welcomes Ambassador Beyrle . . . . . . . . . . . . .34

By Dobrina Vassileva

50 Race in AmCham Ski Tournament . . . . . . . . .36

m e m b e r n e w s

No Room for Complacency in the PR Business . . .38

EBRD Reps Visit Energy-Saving Factory . . . . . . . .40

Bulbank, HVB Bank Biochim

and Hebros Bank to Merge . . . . . . . . . . . . . . . .40

EuroOmax Advances on Its Trun Project . . . . . . .42

Reader's Digest Lands in Bulgaria

With Bestseller . . . . . . . . . . . . . . . . . . . . . . .42

Postbank Sweeps Three Awards . . . . . . . . . . . .43

n e w m e m b e r s . . . . . . . . . . . . . . . . . . . .43

Diamed Ltd.

Mmd

Yavlena Ltd.

l e i s u r e

Bulgaria's Wine Add Color to Europe . . . . . . . . .44

p o r t r a i t

Feels Like... a Grown-up Spirit . . . . . . . . . . . . .47

m u s i c

Signed Fender Stratocaster®

Becomes World's Most Expensive

Guitar, at $2.8 million . . . . . . . . . . . . . . . . . . .48

"An electronic government has to bemore than just a digital government: ithas to be a wise government."

This is how the report of TheEconomist Intelligence Unit on the con-dition of electronic governments inCentral Europe ends. Estonia is namedas the most successful e-government,followed by the Czech Republic andSlovenia. The technological solutionsapplied by these countries are alreadyincluded in all European informaticsbooks as examples of the best practicein the world.

In theory, an electronic government isan attempt by the 'real government' toimprove its work using high technolo-gies, reducing red tape and facilitatingbusinesses and citizens in their com-munication with the state institutions.This is not just a question of adequateinfrastructure and technology, though. Italso requires

a good amount of political

and public will.

This is proven by the leader in thereport, Estonia. Experts say thatalthough the technological provisions ofthe country are not sufficiently high, itranks first because of the efforts itsgovernment pays to securing the legalbasis for an e-government. The firststrategy for information society wasadopted there in 1998 and, by followingand developing it, Estonian politicianshave built an efficient system in corre-spondence with taxpayers' needs.

In 2001, for example, the Estonian gov-ernment launched a webpage whereordinary citizens could share theirideas for improving the quality of theservices offered by the e-government.In January 2003 a total of 372 of thoseideas were included in practical draftlaws and five were carried out as sep-arate technological projects. In a shorttime Estonia became one of the first

countries on the Old Continent to haveintroduced the electronic signature andelectronic identification cards, which,among other things, are used as e-tick-ets for public transport, electronic vot-ing, etc.

Alas, Bulgaria cannot boast such levelof achievement. Minister of StateAdministration Nikolay Vassilev saidrecently: "Currently, we have virtually noelectronic government. During my tripsin the country I always ask business-men, citizens and state officials howmany of them have used the servicesof the e-government, because I havenot. So far I have met two such peo-ple. One was a regional director ofInformation Servicing, the company thatissues e-signatures for access to it.The other was a deputy finance minis-ter. I also have an electronic signaturebut I have used it once only to show itto journalists. That is why I think thatthe

electronic government

in Bulgaria is in its

embryonic stage

of development."

It is a fact that more than 90 percentof the state administration services inBulgaria are provided through individualcontact, and in this respect Bulgaria islagging far behind the 25 EU countries.The reason is the small critical mass ofe-services and citizens to use them.The successful implementation of thee-government requires a common busi-ness process, changing the way theadministration works and using this asa basis to introduce the necessarytechnologies, experts say.

At the end of last year Vassilev saidthat 2006 would be crucial for theimplementation of the e-governmentproject. The minister forecast that sub-stantial investments would be made in

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Electronic Illusions,Bulgarian St yleThe tax administration is the only working branch of the e-government in

Bulgaria By Marina Georgieva

Bulgarian citiziens still have to visit the tax and local authorities in person for payments or paperwork.

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information and communications tech-nologies, there would be more con-sumers of the services provided by thee-government, and more administrativestructures would be included in it.

Later it turned out that the budget allo-cated

a mere 15 million Leva

to the development of the e-govern-ment in Bulgaria in 2006. "We can usethis scant amount that is given for ayear to provide equipment to the under-developed municipalities. It is my desirethat Prime Minister Stanishev shouldhold a non-partisan meeting in thecountry. This could happen before theend of the government's term," said anaide in charge of developing the e-gov-ernment in Bulgaria for the coalitioncabinet.

Budget funds this year are planned forthe purchase of some 2,000 qualitycomputers, 300 of them to be used asservers. The very outlook of the e-gov-ernment is currently being discussedand a detailed plan will be worked out.The more identical the similar struc-tures and the more uniform their soft-ware, the better, Minister Vassilev said.

Electronic correspondence will savehuge quantities of paper and printingmaterials, while the work will be donemore quickly, specialists comment.

A special center will be built to watchfor abuse of information over theInternet and guarantee the security ofinformation after an integrated e-gov-ernment is created. The center against

The development of the information society is a key priority for the Lisbon

process, which defines knowledge economy as the strategic goal of the

European Union until 2010. To coordinate the implementation of this priori-

ty, the EU has developed an action plan, eEurope, and the respective mon-

itoring and evaluation process. The e-government and e-governance are cru-

cial for the information society and play the role of a powerful engine of its

development.

After a long and wide public-private discussion and on the basis of the

existing Strategy for Development of the Information Society, the Council of

Ministers adopted Strategy for Electronic Government in the last days of

2002 but an action plan was not adopted until March 2004, reads the report

of the Applied Research and Communications Fund and the UN

Development Program. The action plan of the strategy until 2007 envisages

a lot of projects on a municipal and regional level, aimed at accelerating

and providing a systematic approach to the introduction of the electronic

government.

E-government: government agencies using information technologies that can

transform their relations with citizens and businesses and with other gov-

ernment institutions. The results are lower corruption, enhanced transparen-

cy, substantially eased communication at all levels, growth in annual revenue

and/or reducing spending.

● In 1998 Coordination Council on Information Society was established in

Bulgaria. Due to poor efficiency it was re-established in 2000. Until 2004

the council held… 2 sessions only - believe it or not.

● It was not before 2003 that the Telecommunications Act was adopted; the

law turned out to be in conflict with the EU legal framework; currently the

authorities are discussing a draft law on electronic communications, which

most European countries adopted between 1996 and 1998.

● According to the annual report on e-Bulgaria 2005, the problems of e-pol-

itics in this country are not due to the electronic specifics but to the lack

of a sustainable political will for their systematic implementation.

E-government and theBulgarian practice

cyber crimes is planned to be estab-lished within three months by the StateAgency for Information Technologiesand the Security Council at the Councilof Ministers.

But how this electronic revolution willbe carried out, provided that even thee-signature is an exotic practice formost state institutions in Bulgaria? Asurvey conducted by Alpha Researchshows that 40 percent of companiesand just 5 percent of citizens use elec-tronic services. For the time being one-stop-shop service has been introducedonly in the regional administrations,while the model is far from working inthe municipal and central administra-tions.

Within a year's time the communicationwithin the tax administration has be topredominantly electronic and all stateinstitutions will have e-signatures, theincumbents have promised. Equipmentwill be bought for the municipalitiesand other institutions, the standards willbe unified and budget-financed trainingwill be organized for the tax adminis-tration officers. The telecenters thathave been already built at the munici-palities will also be used in the training.

At this stage the National RevenueAgency (NRA) - the institution incharge of collecting taxes, pension andhealth insurance contributions sincethe beginning of this year - has

the most developed elec-

tronic service system

in Bulgaria. For instance the NRA canshow its offices countywide on elec-tronic cards. Its structures are markedwith the logo of the organization. NRA'sclients can search the addresses of itsoffices by visiting www.bgmaps.com.The maps have been developed free ofcharge by Datecs GIS Center, one ofthe biggest centers for GeographicInformation Systems and services inSoutheastern Europe, which runs thesite for electronic maps.

Besides, www.bgmaps.com shows thenearest NRA office. This allows citizens

and companies to find the nearestaddress where they can pay their taxesand social security contributions. Thesite also gives the telephones of NRA'sstructures and provides links to theagency's Internet page.

At present experts of the revenueadministration are developing a guidefor payment of taxes and social securi-ty contributions, which will includemaps and contacts of NRA's structuresthroughout the country.

Since the beginning of February 2006,companies and individuals have beenable to submit their tax declarationsonline. Previously only VAT declarationscould be sent electronically.

On NRA's site, www.nap.bg, taxpayershave to complete an application to filean e-declaration and then fill in thedeclaration itself, which has an identi-cal layout with the paper document.The service requires that payers shouldhave an universal electronic signature;those who do not, can authorize an e-signature holder by submitting a paperdeclaration at their regional NRA office.Taxes and social security contributionsare paid through a bank paymentaccount or by debit card registered withthe ePay.bg system. Payment by creditcard will be possible by the end of2006.

Individuals and companies can pay thesocial and health installments duethrough the Internet by means of adebit card. The Internet tax payment

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No Indicator Bulgaria RomaniaAverage for

EU-10

1. Computers per 100 people 6 8 10

2.Computer price to average monthly

household income213% 196% 91%

3. Internet user per 100 people 9 11 14

4.

Price of 20 hours of Internet access via

telephone to average monthly household

income (%)

20.7% 14.4% 9.8%

5. Computers per 100 pupils in primary school 0.4 2.3 5.9

6.Computers per 100 pupils in secondary

school4 10 6.5

7.Public places for Internet access

per 1,000 people0.01 0.23 0.22

Answers to the question "Why don't you use Internet?"

8. I do not know how to work with a computer 49% 45% 23%

9. I do not know what Internet is 23% 21% 11%

Data about the "information society" Bulgaria and Romania, European Commission, February 2004

The web site of National Income Agency is one of the few e-government activities at the moment.

Although the on-line forms and programs at this web site are frequently changed and replaced.

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Estonia is one of the former communist states that joined

the European Union on May 1, 2004. It is a small but tech-

nologically very well developed country. Its parliament pro-

claimed the Internet access as one of the fundamental

human rights. In terms of mobile phones saturation or

Internet, Estonia is ranked higher than some EU member

states like Italy and France, for instance. Wireless Internet

is available almost everywhere - not only in universities,

schools and libraries, but also at gas stations, coffee bars,

restaurants, etc. At most places the access to wireless

Internet is free.

Hence, it is only natural that neighbouring Sweden and

Finland are closely monitoring the developments in Estonia.

The country has a highly educated workforce, high-tech is

everywhere. The liberal economic policy, the low taxes and

low wages (the average wage in Estonia is just one fifth of

the average wage in Finland) are additional bonuses that

boost interest.

Currently, 25 percent of Estonia's citizens have electronic

personal identity cards, which provide access to a broad

spectrum of services. With the access to the Internet, the

card may be used to submit tax refund statements, to com-

municate with banks, to vote online and even buy a cheap-

er bus ticket. The government hopes that soon all Estonians

will have a new identity card - small-size, easy-to-use, and

similar to standard credit cards. The system is quite trans-

parent and convenient for the citizens. If, for instance, a

government official decides to investigate someone, than

the "target" is not only eligible but also capable of finding

online who has launched the query and why.

The electronic identity card is compulsory for all citizens

and foreigners with a permanent residence in Estonia at

the age above 15. It contains a set of various data: full

name, picture, personal signature, personal identity num-

ber, date and place of birth, gender, citizenship, ID card

number, date of issuance and term of validity, permanent

address, etc.

Besides being a genuine document, the card has various

electronic functions used to assure its authenticity. All data,

with the exception of the signature and the picture, are

stored also in electronic form in the card, so that they could

be read by using the relevant equipment. Two more certifi-

cates are implanted in the card, as well as individual PIN

code keys. The certificates contain only the name of the

holder and his/her personal identity number, while the

authenticity certificate contains a unique e-mail address.

The electronic signature grants the relevant juridical power

to the actions of the card holder.

In late 2003, Estonia and Finland even signed an agreement

to harmonize practices related to e-signatures and e-docu-

ments. In line with the provisions of the agreement, the two

states will share experience and information related to e-

signature technologies - whereas all these proceedings are,

naturally, compatible with the requirements and standards of

the European and national legislations. That is how the

"OpenXAdES"* project was born. The objective is to have

electronic documents accepted on the territory of both

states, to convert these documents unto versatile instru-

ments. The e-document initiatives in both Estonia and

Finland are interlinked, so that merging efforts will emerge

as a logical continuation of both projects.

For the time being, Estonia, Finland, Italy and Austria are the

first European states, issuing fully functional digital person-

al identity documents to their citizens. ■

E-stoniaThe Baltic country has declared Internet a fundamental human right and

leads its EU peers in technology implementation

system has an additional module thatallows clients of the revenue adminis-tration to service their dues without vis-iting NRA's offices.

To use the new service, clients have toissue a debit card. As the next step,they have to express desire to use thecard for Internet payments. This can bedone at the issuer bank or through anATM device of the same bank. Thenthe bank card has to be registered withePay.bg and the System for Payment ofTaxes and Social SecurityContributions Via the Internet at NRA'saddress at www.nap.bg.

The revenue administration advises its

* OpenXAdES is a free software development project aiming at profiling XAdES (XML Advanced Electronic Signatures), techni-cal standard published by ETSI (European Telecommunication Standards Institute).

Screen shot from the english version of Bulgarian Ministry of Finance web site. Obviously Small-scale Public

Procurement is one of the few available on-line services there.

c o v e r s t o r y

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clients to use the possibility for pay-ment through the Internet to avoid wait-ing in lines. The payment of all taxesand social security contributions via theInternet takes only a few minutes, thefee for each transfer is 1 lev.

An essential condition is that the trans-fer has to be made at least 24 hours

before expiration of the deadline. Thisis so because technological time isneeded to transfer the amounts onaccount of the respective territorialdirectorate of the NRA.

Tickets issued by the traffic police fordriving offences can also be paid elec-tronically now.

Internet voting is still in

the area of promises,

although many Bulgarians favor elec-tronic vote casting and would use it, apoll conducted by Market Link shows.Within the circle of supporters of eachBulgarian party there are people whoapprove of Internet voting. About 20 per-cent of the Bulgarian people say theyuse computers and Internet in theireveryday work. This share has beenincreasing extremely quickly for the pasttwo years, Market Link says. About 10percent of households say they havePCs at home, which is considered a rel-atively broad access to the web.

Internet would allow large groups ofBulgarians who live abroad to join thevoters' group. Therefore voting via theInternet would attract more young peo-ple. According to sociologists, e-votingwould additionally motivate the peoplewho have an opinion on who shouldgovern the country but do not care togo to the polls and cast their vote.

Given that a series of bank operationsare conducted virtually, and given thate-signatures are valid and the stateadministration is promoting a global e-government project, why then not allowpeople to cast their political vote fromcomputers? ■

The access to information about government services is getting increasingly pop-

ular among the business in the European Union, a survey conducted by the EU

statistical service, Eurostat, shows. The survey covers 25 countries, including

Bulgaria, Romania, Turkey, Norway and Iceland.

In the EU, 45 percent of the people aged 16 to 47 and using Internet have drawn

information from the official websites of the public institutions. Some 51 percent

of the enterprises with access to the Internet have used information from the

official pages of the institutions.

The survey concerned the use of information and communications technologies

in the communication between the government bodies (electronic government)

and the public. According to the results, nearly 50 percent of the European users

of Internet services have viewed information about government services and the

public sector. The most blank forms have been downloaded by companies and

private consumers in Luxembourg (44 percent of all consumers) and Spain (29

percent), given an average level in Europe of 20 percent.

Luxembourg also boasts the most government blank forms downloaded elec-

tronically: 32 percent of consumers, followed by Estonia and Portugal with 26

percent, and an average of 12 percent for the EU.

The European government is one of the key targets of the e-Europe 2005 Action

Plan: An Information Society for All, which has been developed on the initiative

of government leaders. The action plan is in line with the Lisbon Strategy,

according to which the EU has to become the most competitive and dynamic

knowledge-based society.

Minister of Public Administration and Administrative Reform Nikolay Vasilev says, that Bulgarian government offers so little e-services, as it didn't offers them at

all.

European facts

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- Mr Danev, what are the biggest chal-

lenges facing the Bulgarian economy on

the threshold of EU membership?

- The challenges before the Bulgarianeconomy within the context of the pendingEuropean integration are many, but themajor of them is probably its low competi-tiveness. Of course, our entry into thecommon European market gives us newopportunities for sale of products, but it willalso place us in the conditions of extreme-ly strong competition. Bulgaria boasts ahighly energy-intensive economy.Technological renovation is not proceedingfast enough. The highly qualified workforceis now a myth. There are also problemswith the certification of goods and produc-tion facilities. A serious issue is that theBulgarian economy continues to producelow added-value goods.

As a future member of the European com-munity from 2007 Bulgaria will have toobserve the competitiveness criteria of theLisbon Strategy. It has to catch up with theEU countries in labor efficiency and com-petitiveness, incomes and consumption,technological upgrades, infrastructure, edu-cation and science, regional development.

A key element of competitiveness is thetechnological modernization of theBulgarian economy and enhancing innova-tion. The expenses for research and devel-opment in Bulgaria as a share of GDP (0.5percent in 2004) are four times smallerthan the average level in the EuropeanUnion (1.99 percent in 2004), and six timessmaller than the level set in the LisbonStrategy. Only one in 10 enterprisesemploying more than nine people inBulgaria has marketed a new product,implemented an innovative process orstarted an innovative activity. As concernsthe state policy of financing innovations, itcan be illustrated with the fact that theNational Innovation Fund is much smallerthan the Tobacco Fund for instance.

- Which are the most problematic and

the most successful sectors of the econ-

omy that may win or lose from Bulgaria's

future membership?

- The answer to this question is partly con-nected with the previous one: the sectorswhere the process of harmonization withthe European requirements has not beencompleted are the most vulnerable. Such,for instance, are the companies in the foodand beverage industry, where the imple-mentation of quality control systems andthe sanitary and hygienic requirements ishanging like a sword of Damocles overproducers. But here we witness an inter-esting phenomenon. The enterprises thathave not made investments in meeting theEuropean requirements offer unfair compe-tition to those that have allocated substan-tial financial resources to bringing their pro-duction in compliance with the EU criteriaand the new Bulgarian legislation.

The non-allocation of turnover money tomodernization of production allows somecompanies to maintain nearly dumpingprices and actually undercut the market ofrival companies. Therefore a possible delayof Bulgaria's entry date until after Jan. 1,2007 would aggravate the problem andhave an extremely negative effect on theoperation of law-abiding companies.

Together with the problematic sectors Imust mention the potential of sectors liketourism, communications technologies,transport, machine building, electrical engi-neering etc., which attract serious investorinterest.

-What is the role of the government's

economic policy, given the fact that

more than 75 percent of the gross value

added is created by the private sector?

- Regretfully, I have to say that the govern-ment is still trying to interfere in the econ-omy, despite the fact that property is pre-dominantly private. This is also evidentfrom the framework of the state budget,which in practice redistributes nearly 40percent of GDP. I believe that the sharesshould be reduced to 30 or 35 percent bylimiting subsidies and administrative costs.

State interference is particularly strong insetting the parameters of working wages,which affects the price of labor and,respectively, the competitiveness of theeconomy. It is wrong in a functioning mar-ket economy to have wages determined bymeans of government decrees. The levelof the minimum wage is increased everyyear, in most cases without a good eco-nomic reason; there are attempts to pre-serve the payments for hazardous labor orseniority, although international institutions

Bozhidar Danev:

Bulgaria's Economy Lacks Competitiveness The country must speed up technological renovation or face dire problems

upon EU entry, says the chairman of the Bulgarian Industrial Association (BIA)

By Marina Georgieva

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insist on the revocation of this type ofbonuses.

The social partners are currently in seriousdebates over the so-called seniority bonus-es. The trade unions - to a large degreesupported by the Ministry of Labor andSocial Policy - are trying to persuade thepublic that the cancellation of these pay-ments will rapidly reduce working wages inthis country, which is absolutely wrong anduntrue! We think that seniority bonuses cre-ate age discrimination; on the one handthey underplay the labor of young andhighly qualified workers and on the otherthey discourage employers from hiringelderly experienced workers because ofthe burden of these additional payments.

The transferability of seniority bonusesfrom one employer to another has to berevoked and the system has to be replacedby other incentives that take into accountthe actual contribution of a worker to theoperation of an enterprise. This has to bedone through collective bargaining betweenemployers and employees rather thanthrough direct state interference. The statehas to limit its role to improving the indus-trial relations and encouraging the employ-

er-employee dialogue.

-The idea for an "electronic government"

has not been fully carried out in Bulgaria

yet. Do you think there should be any

additional stimuli for fast development of

information communications?

- It is hardly a secret that Bulgaria is lag-ging behind in the development of informa-tion and communications technologies,despite the progress made in recent years(mainly in the field of telecommunications).The possibilities provided by the electronicgovernment and universal e-signatures arenot fully used for reducing the time forbureaucratic service of the business. Theinformation announced at the ministerialconference that was organized by theEuropean Commission in February 2004 isindicative of the condition of the informa-tion society in Bulgaria as concerns infra-structure and Internet access, e-com-merce, e-education, e-healthcare, and e-government. Bulgaria and Romania havethe worst indicators of information societyprogress and in some indicators Romaniaoutperforms Bulgaria.

We are also lagging behind in quality of

education and in systems for maintainingand enhancing qualification; computers inschools are used mainly in informaticsclasses and are practically kept shut downduring the other classes. This is due to thelow level of computer literacy of school-teachers and the poor equipment ofschools with computer configurations. Therole of the state in the field of ICT for edu-cation is to provide broadband Internetaccess to schools. It is a disturbing factthat only 36 percent of Bulgarian schoolswere connected to the Internet during the2004/2005 school year. The situation issimilar in universities. There are 42 univer-sities and specialized higher schools andnine colleges functioning in Bulgaria, whiledirect access for education purposes isprovided by an average of eight PCs per100 students.

We need to adopt an aggressive policytowards encouraging information and com-munications technologies, including by pri-oritizing them in the National Plan forDevelopment until 2013.

- You recently said that "without trans-

port communications Bulgaria would be

a laggard province of the EU." What is

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the role of the state and the private sec-

tor in overcoming these problems?

- In January 2006 BIA organized a big dis-cussion forum on the future of Bulgaria'stransport infrastructure, which was attend-ed by Prime Minister Sergey Stanishev, theministers of economy, finance, regionaldevelopment and public works, the chair-men of the parliamentary committees,non-government organizations and com-panies. Their common stand was thatimproving the transport infrastructure wasa key factor for the economic develop-ment of Bulgaria and that the problems inthis area could only be solved by meansof public-private partnership.

Representatives of the Bulgarian businessare ready to invest in infrastructure but thisrequires amendments to some laws andstatutory acts that concern the develop-ment of transport infrastructure (the StateProperty Act, the Municipal Property Act,the Regional Planning Act etc.). A big partof the intergovernmental agreements withGreece and Romania have to be revised,as well as agreements with other coun-tries, in line with the new political and eco-nomic situation in the Balkans. Bulgariaalso has to implement a system for trans-port statistics and new systems for main-tenance of the road and railroad networksthat use modern computerized manage-ment and control systems.

The government has to develop a clearconcept and program for introduction ofelectronic toll stickers that has to beagreed with the competent bodies of theEuropean Commission. It is essential forBulgaria to normalize its relations with theEuropean Investment Bank - EU's majorfinancial institution - with a view of improv-ing the possibilities for financing infra-structure projects.

-How do you estimate the measures

taken by the government to cope with

the so-called gray sector of the econo-

my?

- We cannot deny the efforts of the cur-rent and the previous governments tomake the gray economy official but thereis still more to be desired in this respect.One of the measures I find appropriate isa drastic reduction in social security con-tributions. It is true that the installmentswere reduced by 6 points from the begin-ning of this year but this is quite insuffi-cient, the more so that Bulgaria is among

the leaders in Europe in terms of highsocial security level. Besides, the 6-pointabatement was actually eaten up by otherpayments that were imposed on Bulgarianemployers (higher energy prices, introduc-tion of mandatory insurance of somegroups of workers etc.).

As far back as two years ago BIA calledfor a substantial reduction in the socialsecurity burden and suggested directingthe huge budget surplus to additionalfinancing of the social security system. Noone can say what the precise share of thegray economy is but it is a public secretthat many enterprises do not declare theactual size of wages to hide social secu-rity payments. According to expert estima-tions some 40 percent of real wages areconcealed. The reduction in the socialsecurity burden will make a large part ofthe shadow economy official. Anotherproblem that needs to be solved promptlyis the introduction of mandatory VAT reg-istration for all companies, regardless ofthe annual financial result. For severalyears we have also been proposing priva-tization of tax audit services and awardingthem to chartered accountants. The estab-lishment of the National Revenue Agencywas a good move but like every new insti-tution it still needs time to start operatingefficiently.

-Does the financial system hide any

risks of increasing intercompany indebt-

edness?

- The Bulgarian Industrial Association isthe only institution in Bulgaria that com-piles annual analyses of intercompanyindebtedness. The latest material on thesubject will be released by the end ofFebruary 2006 but I cannot elaborate atthe moment, as the document still hasnot been completed. As a whole, we thinkthat the problem with intercompanyindebtedness has a highly negative effecton Bulgaria's economy. Our surveys showthat companies' liabilities stood at 46 bil-lion Leva at December 31, 2003.Intercompany indebtedness accountedfor 33 billion Leva of the amount and 25percent of it was overdue. This meansthat goods and services worth 8.25 billionLeva were produced but the paymentswere not settled on time. This trend con-tinues in the following years, which is dis-turbing. The critically high level of over-due intercompany debts deprives diligenttraders of cash, worsens their chances toremain on the market and forces them to

delay payments to their contractors, aswell as to the tax authorities, social secu-rity funds and employees.

The problem can be solved through acomplex of mechanisms, one of which isthe setting up of the so-called debtinstrument market, launched in the fall of2005. The system is still at a develop-ment stage and is being supplied with pri-mary information by interested compa-nies. The debt instrument market, whichfunctions through our webpage (www.bia-bg.com), will offer reliable and operativeinformation on the supply and demand ofdebt instruments and, most of all, ofunsecuritized debts. The market will alsoprovide services to creditor companiesthat have overdue receivables outstandingand to buyers (investors) willing toacquire the rights over these debts.

-Bulgaria's current account deficit

poses serious macroeconomic risks to

this country. How can this problem be

tackled?

- Before any measures are taken, thereasons for the foreign trade deficit mustbe identified clearly. On the one handthere are objective reasons for the cur-rent account gap, such as the high fuelprices and the growing investment activi-ty. On the other hand, however, the seri-ous decline in the volume of foreigninvestments and the intensive bank land-ing, which spurs an increase in con-sumption (mainly of import goods), arealso disturbing. In regards to consump-tion, I have to mention the considerableinflow of cash coming from Bulgarianemigrants. The volume is estimated at 1billion Leva, but it actually might be closeto 3 billion Leva.

A disturbing trend related to Bulgaria'spending EU accession can also be seen.All available resources are directed towardthe purchase of land and real estate,which affects entrepreneurship and theinflow of financing for production. Manycompanies sell their enterprises and wedo not know where the money goes - forother investments, consumption (mostly ofluxury goods) or outside the country.

So, before any measures are taken, theright thing for us to do is review the fac-tors that influence the deficit and to lookfor mechanisms to limit them. In otherwords, we have to cure the reasons, notthe consequences. ■

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Amazing events have transpired inBulgaria over the last several months.Instead of uniting and harnessing allavailable forces, Bulgaria's political andbusiness elite is already drowning insquabbles over the distribution of themulti-billion European funds. The rulingcoalition partners - the BulgarianSocialist Party (BSP), the NationalMovement Simeon II (NMS) and theMovement for Rights and freedoms(MRF) are hardly capable of concealingtheir appetites for more power over thedistribution of the Euro-subsidies.

The discord peaked last month, after for-mer Prime Minister Simeon Saxe Coburg-Gotha decided, somewhat negligently, totest the idea of having a special ministerat the helm of the billion Euro pool thatBulgaria is eligible to receive as a mem-ber of the EU. The NMS leader immedi-ately became the target of suspicionsthat he wants personally to assume thiskey post.

Bulgaria will receive close to 11 billionEuro between 2007 and 2013, according

to EU budget schedules. The Europeanfinancial assistance for the developmentof the agricultural sector and of the ruralregions has the largest weight - about 5billion Euro.

A notch above 6 billion Euro will be allo-cated from the European Social Fund,from the Regional Development Fund andfrom the Cohesion Fund. The money forBulgaria from the EU structural funds andfrom the Cohesion Fund will be distrib-uted to six operative programs - Humanresources, Competitiveness, Environment,Transport, Regional Development andAdministrative Capacity.

The Competitiveness and Humanresources programs will each be allocat-ed 939 million Euro. The Transport andEnvironment programs rely on 1.765 bil-lion Euro each. The largest amount ofsubsidies is allocated to Regional devel-opment - 1.435 billion Euro. Another 196million Euro is allocated to improvingadministrative capacities.

This 11 billion Euro have caused a sub-

stantial seismic activity in the ruling coali-tion. Even at the time when the cabinetwas painfully structured, the three partieswere heavily arguing about the quotasapplicable to the assignment of cabinetposts. During the next several months,the socialists and the tsarists had prob-lems with concealing their irritationcaused by the strong position of theMRF. Now, the Euro-financing of Bulgariaas a pending member of the EU isemerging as the top priority issue and,logically, the disputes are becoming moreand more animated. The ministries, whichwill be the major recipients and main dis-patchers of the Euro-assistance, haveturned into arenas of infighting.

11 billion Euro squabbleBulgaria's business and politicians started quarreling for the Euro funds before

any disbursements have been made to the countryBy Yuliana Boncheva

The EU will have at its disposal a

total of 862.4 billion Euro for the

period 2007-2013, according to the

budget framework approved by the

European ministers shortly before

last Christmas. The whole amount is

equivalent to 1.045 percent of the

GDP the current EU member states

plus Bulgaria and Romania.

The budget introduces simplified

procedures for using subsidies by

newly accepted member states. The

amount tagged for agriculture for

Both Romania and Bulgaria is set at

8 billion Euro.

According to European Commission

President Jose Manuel Barroso, the

new EU budget allows the

Community to persist in its expan-

sion and boosts economic develop-

ment of the new members.

The agreement on the Community

budget was made possible also by

the decision of Great Britain to trim

by 10.5 billion Euro the reduction it

is eligible to when paying its due to

the common EU budget.

The New EU BudgetFramework

Assen Gagauzov (left), Minister of Regional Development and Public Works will have to deal with EUR

1.435 billion from the "Regional development" EU fund.

Counting the ministers

The problem is that the key ministries areheaded by ministers of different partisancolors. At the same time the multi-col-ored economic claims serve as catalystto serious political clashes within theauthorities. The Ministry of Environmentand Waters, which is about to become amajor recipient of subsidies from the EU,is headed by Djevdet Chakarov from theMRF. His co-partisan Nihat Kabil headsthe Ministry of Agriculture and Forestry,which is in charge of the sector most lav-ishly subsidized by Brussels - agriculture.The BSP also has two major "players" inthe Euro-billion field - Assen Gagauzovand Petar Mutafchiev, who head theMinistry of Regional Development andthe Ministry of Transport, respectively. Inpractical terms, the third coalition partner- the party headed by Simeon SaxeCoburg-Gotha, seems to be somewhatisolated from the abundant Europeanfunding.

The three parties forming the cabinethave come to an understanding that theimportant posts in the state shall followthe 8:5:3 or 5:3:1 scheme - for BSP, NMSand MRF, respectively. Calculations indi-cate that the distribution of the controlover the Euro-funds the formula for thestructure of the government of the rulingcoalition may have been distorted.

The influence, measured in terms offuture subsidies from the EU, of thesmallest coalition partner - the partyheaded by Ahmed Dogan, makes it the

big winner. The NMS is especially dissat-isfied with this situation, as the ‘tzar’party was left without access to the fullEuro-coffers. The ministries of Education,headed by Daniel Valchev, and of thestate administration, headed by NikolayVassilev, have been allocated more mod-est lumps of the substantial Euro-assis-tance that will be allocated till 2013.

That is how the NMS leader SimeonSaxe Coburg-Gotha came up with theidea to appoint a special minister incharge of the Euro-funds coordination.According to persistent rumors, the for-mer prime minister aims at becoming aEuropean Commissioner. However, sinceBulgaria is not in a position to nominatea commissioner any time soon, the postof the major dispatcher of the billionsallocated by the EU to Bulgaria obvious-ly seems good enough, with the extrabonus of being the perfect springboard toBrussels - whenever comes the time forBulgaria to send its representatives to toppositions in the EU institutions.

The three parties in the ruling coalitionsgathered last month at a special sessionto discuss the hot topic of the EU fundsand their allocation. It was then that theNMS tabled their assessment that twothirds of the European money will bespent for environment and agriculture,which means they will be spent by min-isters controlled by the MRF of AhmedDogan.

The money tagged for education isgrossly insufficient, NMS representatives

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The 2006 budget is the last under the cur-

rent Financial Perspective (expiring at the

end of next year). The present financial

perspective (2000-2006) comprises eight

headings:

Agriculture, with two separate subhead-

ings:

● Common Agricultural Policy (CAP)

expenditure (essentially market mea-

sures and direct aid to farmers)

● Rural development and accompanying

measures, introduced during the 1992

CAP reform

Structural operations;

with two subheadings:

● Structural Funds

● Cohesion Fund

Internal policies

External action

Administration

Reserves

Pre-accession strategy

Compensations.

The 2006 budget will amount to EUR 121.2

billion in payment appropriations, or 1.09%

of Gross National Income (GNI):

Competitivenes: EUR 7.9 billion

Тhe budget contains several provisions

aimed at making the EU more competitive,

among them greater emphasis on

research, energy and transport and infor-

mation society.

Cohesion: EUR 39.8 billion

The amount of money available for the

EU's least developed regions will increase,

in part as a consequence of enlargement

to 25 Member States. The 10 new Member

States which joined the EU in 2004 are still

seeing their regional payments phased-in,

as agreed in the accession treaties.

Managing Natural Resources:

EUR 56.3 billion

Money for direct aids and market mea-

sures in agriculture will increase only slight-

ly, to EUR 42.9 billion (+2.5%). Rural

Development spending, however, will see a

boost of 11.6% on the 2005 budget to

reach EUR 11.8 billion in commitments

(EUR 10.9 billion in payments, up 13.0%).

Funds for the protection of the environment

a c c o u n t i n g

Where the EUMoney Will BeSpent This Year

European Monetary Affairs Commissioner Joaquin Almunia says that the EU will have at its disposal a total

of EUR 862.4 billion for the period from 2007 until 2013

complained. The dilemma, as presentedby Valchev - "We could join Europe eitheras a highly educated nation or as anation of farmers" - indicates that per-haps he has his own personal sense ofhumor but a vague knowledge of Euro-math. The logic, implying to put on thescales and compare the amounts forfarming and for education is absolutelywrong. Bulgaria may not choose betweenthe university student and the farmer.And it may not redirect Euro-budgetamounts slated for vineyards and cowfarms towards universities or colleges.These are entirely different spheres,which are subsidized from different EUcash registers. The money available fromthe various funds has already been set inthe EU budget framework for 2007- 2013,and Bulgaria may not develop its own"free program" about how to spend thismoney.

Bulgaria has actually an entirely differentproblem - it still has not learned its finan-cial lessons and, besides, it has alreadydemonstrated that it can not utilize fullyeven the smaller pre-accession funds.For example, the EU has released toBulgaria since 2000, within the frame-work of the ISPA program, more than 867Euro million. Supplemented by 289 mil-lion Euro from Bulgaria's own budget, thetotal amount allocated to improving theinfrastructure has increased to more than1.5 billion Euro. Until now, Bulgaria hasused up a token 171.6 million Euro, orless than 12 percent of the impressivetotal.

The business misses the

point, too

Meanwhile, businesses have activelyintervened in the battles for the Euro-funds. Representatives of the most influ-ential employers' organizations more andmore openly criticize both the currentprogram for spending the EU funds, andthe future financial projects. TheBulgarian companies are very dissatis-fied by the fact that they have been iso-lated from large infrastructure projects.They complain - and they do have theright to complain - that the preparation ofdocuments, the participation in tenderprocedures, the granting of concessionsetc. are all obscured behind an opaquewall. This creates obstacles, and some-times directly eliminates the participationof Bulgarian companies in large-scaleand profitable projects, the business

community announced in its commentaryon the National strategy for the develop-ment of transport.

Bulgarian entrepreneurs, however,demonstrate a similar ignorance at thepolitical elite, regarding the Europeanbudgeting rules. Respectable representa-tives of employers' organizations havepersistently stressed at a series of work-ing tables for a restructuring of the EUsubsidies schedule for the period from2007 to 2013 - for instance by shiftingamounts form "rural" funds to programsfor increasing the competitiveness ofBulgarian enterprises. The EuropeanUnion, however, is traditionally allocatingthe lion's share of the subsidies to theagricultural sector and the rural regions.This is perfectly well demonstrated by theCommunity budget for 2006 (see theillustration below). The objective is quitepragmatic - all Europeans should beoffered high-quality and diverse foods,while the rural regions are flourishing.

No time left

It is paradoxical, but politicians and busi-nesses in Bulgaria seem to be whollyimmersed in disputes about the realloca-tion of European funds while no one isengaged in drafting new projects forfinancing by the EU - so that immediate-ly after Jan. 1, 2007 Bulgaria could applyfor the utilization of its due portions with-in the various European funds.

The assessments made by both foreignand local experts contain quite a lot ofconclusions that should sound a lot ofalarms. Experts are unanimous in theirconclusions that Bulgaria lags dramatical-ly behind in creating an army of experi-enced, conscientious and motivated offi-cials, who could be placed in charge ofEuro-projects. The evidence in this aspectis indisputable. Bulgaria is allowing itselfthe luxury to miss moneys that have beenset aside by Brussels because - eitherdue to official negligence or corruptionsuspicions and blocks - the approval of alarge number of projects is delayed for solong that all deadlines are missed. Andthe EU rules are absolutely strict - thefunds, which have not been used accord-ing to the schedule, will simply have to bereturned to the source.

Bulgaria is performing poorly in two ofthe European pre-accession assistanceprograms, which are extremely useful for

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will increase by 4.2% in commitment terms,

to reach some 0.2 billion.

Citizenship, Freedom, Security and

Justice: EUR 1 billion

The EU's involvement in fostering coopera-

tion among Member States on crucial

themes such as disease control, protection

of borders and the fight against terrorism is

growing.

The EU as a Global Partner:

EUR 8.3 billion

Aid for EU candidate countries will

increase substantially, in preparation for the

accession of Bulgaria and Romania, and to

help Croatia meet the necessary standards

to join the EU. Additionally to the aids relat-

ing to agriculture (EUR 0,3 billion) and

regional development (EUR 0,6 billion) the

enlargement pre-accession assistance

reaches a level of EUR 1 billion for these

3 countries and EUR 0,5 billion for Turkey.

The EU must respect longstanding com-

mitments, as helping reconstruct the

Western Balkans (aid for the western

Balkans excluding Croatia is stabilised at a

level of some EUR 0,5 billion) or support-

ing peace efforts in the Middle East. We

must also cater for needs unforeseen in

Berlin in 1999, such as reconstruction and

help for the victims of the Asian tsunami or

support for the reconstruction efforts in

Iraq. New needs come from the very recent

reform of EU sugar sector and related

compensations for ACP countries. In order

to meet all these challenges we need addi-

tional money and require recourse to the

so called flexibility instrument, which allows

the EU to exceed the provisions foreseen

in the financial perspective. In this budget

proposal, there will be an extra EUR 275

million above the financial perspective ceil-

ing for external relations.

Administration: EUR 6.7 billion

The administrative costs will amount

to EUR 6.7 billion, less than 6% of the

budget - EUR 3.1 billion for the European

Commission and EUR 2.5 billion for the

other institutions.

Compensations for new EU countries:

EUR 1.1 billion

The compensations foreseen in the acces-

sion treaties to ensure that new Member

States retain a positive budgetary balance

during the first years of accession, are

fixed at EUR 1.1 billion.

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its infrastructure - PHARE and ISPA.Almost all large infrastructure projects, forwhich the relevant grants from the EUhave been agreed, are setting one recorddelay after another: for instance the con-struction of the new Sofia Airport, andthe Lyulin, Trakia and Struma freeways.

Belated moves

The countdown to Bulgaria's EU acces-sion date is quickly closing on to zero.

There are already less than 300 days leftuntil Jan. 1, 2007. If Bulgaria becomesthe 26th EU member on this date, it willencounter new challenges. A change willoccur in the sources of financing - untilnow the country relayed on pre-acces-sion funds. At the same time, with a fewmonths Bulgaria will be able to accessthe rich structural funds. But will it bereally able to access those funds? Untilnow, the utilization of the preparatoryfunds was painfully difficult and slow.

How, then, will Bulgaria manage with themore pedantic and stringent rules fordrafting projects, and with the organiza-tion and the monitoring of the investmentprocess when using the new Europeancoffers?

On this background, it was quite surpris-ing that Sofia is searching for a lobbyist,who would be able to convince the mostskeptical EU member states not to delayBulgaria's accession. The Ministry ofForeign Affairs launched a tender forsuch a lobby contract several weeks ago.Besides coming too late, such a kind ofassistance could hardly have any effect.Bulgaria has a single option in its currentsituation - to work very hard, and toimprove its grades on the subjects, forwhich it was criticized in the latest annu-al report of the European Commission. IfBulgaria fails to demonstrate an excep-tional diligence and excellent perfor-mance, it will simply give the trumps intothe hands of the opponents to Europe'sexpansion. Then, event 100 lobbyist com-panies and influential personalities will bepowerless to have the country acceptedinto the EU. ■

The money tagged for education is grossly insufficient, according to Minister Daniel Valchev.

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Bulgaria's tourism industry seems to bein panic. Summer resorts may sufferwater shortages during peak hours, saypessimists. Even Regional DevelopmentMinister Assen Gagauzov was quotedrecently as saying that visitors' healthmay be threatened during high season.

Representatives of the tourism branchare worried mostly because the numberof beds is rising while the quality of ser-vices declines, pushing the ever-savvytourists away. For instance, Bansko, oneof Bulgaria's gems, has already becomeso over-populated that room prices havegone down sharply this winter.

Bulgarian resorts need more air andgreenery rather than new hotels, repre-sentatives of the tourism businessesand of municipalities say. The numberof visitors to Slanchev Bryag (SunnyBeach) has barely moved up, while thenumber of available beds has increased10 to 20 times, said hotel owners.

Tourism in Bulgaria has always beentreated as a "reserve niche" for thecountry's economy. There are only afew places in the world, where onecould ski on May 20, then board a heli-copter and fly to the seashore. That iswhy Bulgaria has been experiencing atourist boom over the last several years,with a 10-12 percent growth in the num-ber of foreign tourists per year.

The results for 2005, however, weremuch more modest, with a growth ofonly 4.5 percent. It is quite a differentissue that these figures account also fortransits, for one-day visitors, for missiontrips and suitcase merchants. The num-ber of tourist coming for a vacation ismuch lower, hotel owners have said.

The low 2005 tourist growth rate mayemerge as

the beginning of

an alarming tendency,

if the state continues to neglect thisstrategic branch, said Chairman of the

Bulgarian Tourist Chamber TsvetanTonchev.

According to data released by theNational Statistics Institute (NSI), thenumber of hotels is Bulgaria is 1,400.Branch sources say that the actualnumber of hotels has increased to1,700. The NSI figure does not accountfor most of the family hotels with lessthan 30 beds or with less than 15 roomsfor rent. The data does not account alsofor chalets, motels, and for retreatscatering for employees of state-ownedentities. It is difficult to assess howmany of these facilities have no sewer-age, but judging by the overall situation,the number of facilities without properplumbing is not trivial.

The effective Waters Act stipulates thatin such cases water treatment plantsmust be built to prevent spill-offs of rawsewage into local rivers. Many existinghotels thus will be forced to build prop-er installations in order to match theeffective Euro-standards and avoid clo-sure by the authorities.

In line with this country's commitmentsto EU, all hotels and restaurants willhave to introduce a system for risk

analysis and monitoring in 2007. Hotelowners have admitted that most of themhave not even started thinking about thisrequirement, although the process wouldtake about 12 months or even more. Itrequires investments, repairs of premis-es and new equipment.

"There is no branch development strate-gy, hence no one knows what mighthappen tomorrow, or after 10 or 20years," said Donka Sokolova, chair ofthe Bulgarian Association of TourAgents (BATA).

It has become clear that the govern-ment is in no position to do anythingmore for urbanized territories alongBulgaria's Black Sea shore. The Councilof Ministers has adopted a draft bill thatstipulates rules for the

Black Sea shore

management

The bill implies that the state, in practi-cal terms, has decided not to reclaim thepublic property, seized by private hotelowners. The Slanchev Bryag and ZlatniPyasatsi (Golden Sands) resorts willcontinue to exist in the way they havebeen built so far. The reason for this is

Government Set to FixBulgaria's Tourism Jumble

By Mina Georgieva

A group of foreign tourist is walking half naked in downtown Sofia, trying to avoid the heat last summer.

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the provision that the bill, if approved, willhave no retroactive force, hence no ille-gal hotels will be demolished. Most ofthe facilities, built on the beaches, haveall the proper documents in the papertrail that approved their existence.

The new Black Sea shore planning billintroduced for the first time ever theterms "seashore" and "sea beach." Itmay be surprising, but the state hasnever before specified in legal terms thedefinitions these territories, which are itsexclusive property. This legislative loop-hole allowed for the construction ofhuge hotels on the sand dunes, whileowners were capable of providing therelevant legal instruments, stating theyhave used agricultural land.

It is still not clear, however, how thedemarcation line between the beach andthe shore will be drawn, in order to delim-

it the exclusive state property areas. Twospecial-regime construction zones havebeen specified, measured from the inlandborder of the sea beach and theseashore. The most stringent construc-tion rules apply to a Zone A, covering a100-meter strip along the beach, or a 50-meter strip along the seashore. The landlots in this zone may have a building den-sity of up to 20 percent, the height ofbuilding must not exceed 7.6 m, and alleast 70 percent must be used for land-scaping and greenery. Permits for con-struction along the Black Sea shore willbe issued by specialized municipal coun-cils, formed by representatives of thebranch chambers of architects and engi-neers, and of the ministries of environ-ment and defense.

The new bill allows investors to build thetechnical infrastructure to their projects- water and sewerage, electricity net-

work and roads. Minister of RegionalDevelopment Assen Gagauzov empha-sized that investors will not be allowed inthe future to start actual constructionbefore the relevant infrastructure is inplace.

At the same time a political decisionwas made for the appointment of theState Agency on Tourism. Mario alJeburi was nominated by Simeon SaxeCoburg-Gotha, the former PrimeMinister and current leader of NationalMovement Simeon II. Al Jeburi wasamong the yuppies that came to powertogether with the ex-king. He served asforeign investments adviser to NikolayVassilev during Vassilev's first mandateat the head of the Ministry of Economy.

The office of the chairman of the StateAgency on Tourism is important becausefor the first time ever the state policy inthe sector is charged to an independentstructure, directly subordinate to theCouncil of Ministers. The establishmentof the agency was seen as a sign thatthe government had assigned a prioritystatus to tourism. Until now, tourism hasalways had the status of a sub-branch,attached to some of the ministries -either the ministry of economy or theministry of culture. Tourism has emergedas one of the leading sectors ofBulgaria's economy and every year con-tributes by substantially decreasing theforeign trade gap. The sector generates13 percent of Bulgaria's GDP. Almost 1billion Leva of investments are generat-

British tourists do their jogging on the alleys of Black sea resort "Elenite" - one of the few that still has trees,

grass and free space instead of new hotel buildings standing too close one to another.

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ed in tourism. Tourist companies paysome 70 million Leva in value-added tax,and the branch as a whole brings insome 240 million Leva in taxes.

At the same time, the Agency will haveat its disposal 12 million Leva, allocatedfrom the budget for 2006, for advertisingdomestically and abroad. The funds thatmay become available to the Agencythrough various EU programs and pro-jects as of next year, as stipulated bythe latest amendments to the TourismAct, are much more substantial. Some1.5 million Euro will be released withinthe PHARE program alone for institution-al building.

In compliance with the latest legislativeamendments, the chairman of theState Agency on Tourism will workclosely with municipalities and regionalgovernors, as regions will be eligible toparticipate in EU programs. The chair-man will negotiate the participation alsoof non-profit entities in activities, relat-ed to the sector. The institution will pro-vide registration of tour operators andtour agents. It will be charge of rankingthe facilities - hotels, vacation villages,beaches, ski tracks, etc. The agencywill be in charge also of the tourism-related infrastructure, as the EuropeanUnion will allocate substantial funds toinfrastructure. The agency will alsodeal with the professional training oftourism personnel, whereas additionalfunds are expected from the EU forthis purpose as well. EU financing is

scheduled also for programs for thecommissioning of already agreed stan-dards, including standards applicable tofood safety, modern water treatmentsystems etc.

The State Agency on Tourism will play amajor role in presenting Bulgaria's can-didature to host the 2014 WinterOlympic Games, and the budget hasallocated substantial funds for this pur-pose as well.

The agency will be in charge also ofdrafting the regulatory and tax frame-work for the tourist business. The touristbranch has for quite a long time insist-ed that the cost of construction andmodernization must be accepted as tax-deductible. Private operators expect alsothat the state will finally adopt a nation-al tourism development strategy,designed to outline a new legislation aswell as the future plans for constructionalong the Black Sea. ■

● A 30-percent decline in international hunting tourism is expected due to theavian flu and ban on bird hunting announced Bulgarian Union of Hunters andAnglers. The annual revenue from hunting is estimated at 2-3 million Euro.

● The number of tourists, who visited Bulgarian in 2004, rose by 13.6 percentcompared to 2003, which was seven times higher than the rate registered in2005. The number of tourist in 2003 rose by 18 percent. The lowest growthrate was registered in 1999 - 5.6 percent.

● Bulgaria expects about 350,000 business visits in 2006. Congress tourism isexpected to bring in about 500,000 Leva. In line with its pending accession tothe EU, Bulgaria is emerging as an attractive destination for investments andfor business contacts. European integration motivates trans-European touroperators to bring in more business tourist to Bulgaria.

● Bulgaria may soon emerge as a leading golf destination on the Balkans,tourism expects claim. Golf can be played in this country for seven to eightmonths of the year; besides, the country has the suitable climate, magnificentnature and many mineral spas. There must be several golf fields at a distanceof 30 to 40 kilometers, in order to convert a region or a country into a golfdestination. There are two active golf fields in Bulgaria - in the t owns of Slivenand Ihtiman, with a third in the process of construction close to the town ofRazgrad.

● 12 million Leva has been allocated for 2006 for funding Bulgaria's participationin international tourist exhibition and for commercials on CNN, Euronews andother TV channels.

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The current account (CA) deficit haswidened 92 percent y/y to 3.2 billionEuro in 2005 to an all-time high of 14.9percent of GDP relative to 8.5 percentin 2004, according to preliminary data ofthe central bank. We even expect thefull-year financial reports of foreignowned companies to show much higherreinvested profits that would bring

upward revisions in the CA gap to some16 percent of GDP. However, reinvestedprofits will symmetrically push up FDIinflows and would have no effect on thedebt-related financing of the externalimbalance. In addition to the rapid CAdeterioration last year, the net FDI inflowhas plunged 11 percent to 1.6 billionEuro covering only 51 percent of the CAgap against 109 percent in 2004. Butthe orthodox approach of looking at FDIand CA flows tells only part of the story,as the central bank has booked a hugeunidentified inflow of 1 billion Euro inerrors and omissions last year relative to562 million Euro in 2004. We think thatthe bulk of unidentified inflows comesfrom purchase of real estates by for-eigners. Registrations at local notariesshow some 55,000 real estate deals

with foreigners last year. Taking an aver-age price of 20,000 Euro per deal, thecalculations perfectly add up to thehuge surplus in errors and omissions.Indeed, some of these deals have beenalready caught up in the FDI stats butthese are mainly the big ones reportedin the retail sector. It is quite possible tosee late data revisions moving most of

the omissions to the FDI accounts. Yet,the total sum of omissions and net FDIinflows is still insufficient to cover thewhole CA gap. The ratio is 83 percentfor last year relative to 143 percent in2004. The foreign inflows directed tolocal real estates also play a big role inexplaining the gaps between the aggre-gate demand hikes seen by the double-digit retail and import growth rates asrelated to the modest wage and house-hold readings. Debt-related financinghave also pumped local demand andimports as some 17 percent of the CAgap for last year is matched by a netincrease in the overall external liabilities.

Despite the huge CA gap last year, theoverall balance of payments has netteda surplus of 550 million Euro helped by

financial and unidentified inflows. Thefinancial account has ended up on asurplus of 2.7 billion Euro as the FDIdrop has been offset by higher debtfinancing in the private sector. There arerisks however that the large CA gapcould force portfolio investors out of thecountry. Such movements are not seenyet as most of the debt is mediated byforeign owners of banks and enterpris-es, which are operating on a long-termbasis, while the scope of speculativeshort-term positions is relatively weak.Nevertheless, the foreign reserve accu-mulation has been slowed significantlyin the past 2 years and any suddenfinancial withdrawals or mass switchesfrom local to foreign currency couldpose risks on the country's externalposition. Moreover, the foreign reserveshave dropped by 483 million Euro (6.6percent) in January and 156 million Euro(2.3 percent) in the first ten days ofFebruary this year to 6.7 billion Euro asof Feb 10 or 4.9 months of last year'simports of goods and services. Thereserve coverage of imports has beennearly 6 months about two years ago.The downward reserve shift in Januaryand February is caused by seasonalfactors, regular debt payment and pre-payment of debt to IMF but the pictureis not so rosy even if one-offs areexcluded. Compared to a year ago, theforeign reserves have surged by 9 per-cent y/y at end-January with a cleartrend of growth slowdown amid rapidlyexpanding consumer credits andimports.

One of the side negative effects of theCA gap widening is that the fixed-exchange rate regime in the countrycould be wrongly blamed of creatingexternal balance risks. The standardcalculations on real effective exchangerate appreciation and labour productivi-ty indicate that the currency peg to the

This article is based on extracts from ISI Emerging MarketsIntelliNews publications: Bulgaria This Week and BulgariaCountry Report. For more detailed information please contactISI Emerging Markets office in Sofia at +359 2 8160404 orinfo_bg@securities.com

Monthly Focus: External (Im)Balance

12-month flows, EUR billion

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euro is not a major reason behind theforeign trade deterioration. Nevertheless,the state authorities have not done toomuch in promoting productivity gainsthrough looser labour regulations andthis may have very negative effects onthe country's competitiveness in future.The currency appreciation as calculat-ed by the central bank is 26 percent in2005 against 1998 in annual averageterms while our estimates for the labourproductivity (based on GDP, grosswages and employment figures) point toa 10 percent improvement. The fixedexchange rate regime has been intro-duced in mid-1997 and we assume thatthe economic adjustments have broughtsome kind of equilibrium in the baseyear of 1998. If we take 1997 as a baseyear, the figures would be significantlydistorted by the hyperinflation in the

first half of 1997 and lagged wage cor-rections continuing a year after. The fig-ures show that labour productivity hasbeen improving at a much weaker rate

than real exchange rate appreciationbut we do not think that the gap repre-sents a key factor behind the CA dete-rioration. These calculations do nottake into consideration technologicaland restructuring gains in productivityover the same period and we believethese gains are significant in the privatesector, which already stands for nearly100 percent of the total value added inthe manufacturing. Alternatively, weattribute the rapid deficit increase to thehigh FDI inflows over the past severalyears, active bank lending and foreigninvestments in real estates that haveraised both investment and consumerdemand. High oil prices and country'sdependence on external energysources are the other major determi-nants of the external imbalance but itseems that the economy should adjustto expensive energy inputs on a long-term basis. ■

Reserve position

Real effective exchange rate (REER), productivity, 1998=100

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"Please, Sir, not with this!"

The owner of the restaurant looked quite uneasy when he sawus entering with three beers in a plastic bag. The pubs inChaussee de Mons in Brussels are mainly owned by Arabs.

"Don't worry, we won't drink here… Where are you from?"

The man calmed down: "From Syria".

It was our turn to raise an eyebrow. The man had come fromSyria, a secular state, brought up under Hafez al-Assad, whodid not ban alcohol and did not like Islamists.

While we were dipping hummus and waiting for the grilledmeats, a man from a nearby table told us quietly: "It wasn'tlike that before." I could understand that: group pressure is nota thing to take easily. It is equal at least to the smallest com-mon denominator - if others do not allow alcohol in, then youshould not allow it as well; if they feel threatened, then you arethreatened as well. A storm is raging outside but you try tohold hands with your relatives. Maybe there is no secret AlQaeda police in Brussels, where Chaussee de Mons is locat-ed. Nor is it necessary. Concern and self-censorship are suf-ficient to do the job.

Samuel Huntington, a Harvard professor. I could have startedwith this name and I am sure that would have made you readthe article at once. Huntington emerged as a superstar in1994, whose name in a media text unfailingly arouses readers'emotions. His thesis was also arousing, even embarrassinglyso:

Clash of Civilizations?

Right, with the question mark at the end.

When I came to Brussels in late February, Huntington's namewas successfully competing on newspaper pages with theAustrian biathlonists who were caught with doping, and evenwith the avian flu. The story about the cartoons was still rag-ing, the Iranian atom exploits were about to throw the veil ofwar over the Middle East, while Shia sacred places were blownin Iraq. Was it time to remove the question mark?

If you believe in mysticism and feel embarrassed to admit it,than you can don the post-modernistic mask and employ thefashionable words "a self-fulfilling prophesy." Prophesies cometrue only because they have been uttered aloud before that. Ifyou call the devil, then the devil always comes even if there isno devil at all. Is Huntington a real genius prophet, or he hassimply stumbled into a "self fulfilling prophesy" situation? Orperhaps, tomorrow will denounce his prophesy? There is aPersian poem (I wonder whether Ahmadinedjad has read it)which says: "I voice in the dark told me, 'There are no voices

in the dark.'"

Enough mysticism. The question whether the prophesy eggcame before the conspiratorial hen is meaningless. There issense, however, in asking what is happening and how long itwill continue to happen.

It is obvious that the publication of the Danish cartoons cameas a result of a series of misunderstandings, mistakes andsheer stupidity. The editor-in-chief of "Jyllands-Posten,"Carsten Juste, and the author of the idea, art directorFlemming Rose, left in mid-February on sick leave due toexhaustion. They cannot be found any more for interviews andasked to explain why they did what they did. A person fromthe editorial staff responds to the torrent of emails with thecopy/paste response "No more statements."

It is obvious also that the unpublished (and most probably con-cocted) cartoons that Danish imams carried around the world,

Hummus and Huntington When political correctness of the West meets conspiracy theories of the East

By Boyko Vassilev

Muslim demonstrators shout slogans during a march in Hong Kong February 17,

2006. About 2,000 members of Hong Kong's Muslim community shouted slogans

and waved posters on Friday in protest against cartoons of Prophet Mohammad.

The march was the first of its kind by Muslims in Hong Kong in years, and

organisers said the community felt offended by the cartoons, which were first pub-

lished in Denmark in September but since reprinted in many countries.

and not the genuine, the published ones, came to centerstage. These (concocted) cartoons depict the Prophet as deal-ing with pigs, or engaged in sinful intercourse, etc. And final-ly, it is clear that the issue does not boil down to images ofthe Prophet - one could see a lot of these images in Arabicmuseums, as up until the XVII century it was considered asnormal. The issue is most probably that regimes, persons andpartisan formations in the Islamic world had been zealouslysearching for a cause to chastise the West - and found it inthe pathetic endeavors of "Jyllands-Posten".

Yes, it is clear - no one is absolutely blameless. But the "vio-lence of the cartoons" revealed simultaneously the

weak points of the West and the East.

These weak points, for me at least, are the excess of politicalcorrectness in the West, and the conspiracy theories in theEast.

It must be more than obvious already that the political cor-rectness in Western Europe and the United States (known bythe acronym PC) has already reached the outer boundaries of

its own absurdity. In the West, you would not dare look into theeyes of your female subordinate without risking a lawsuit - anovercorrection to the long-standing gender discrimination in theworkplace. But the fear to avoid insulting somebody's sharp-ened sensitivity is emerging already as a fear to tell the truth,protect your own values, or just crack a joke. The last idioticdevelopment in this aspect was the firing of former HarvardRector Larry Summers. The PC crowd came after him for hint-ing that men and women are different (oh, really!), and hencemen and women succeed or fail to succeed in various fieldsnot at all randomly.

The excessiveness of political correctness strip the Westernvalues of their contents; it makes doubts look like weakness,drains the vigor of political debate and turns it into a boring,tired jabber by equally mumbling people addicted to usingwords ending with '-ation.' The Western world missed theopportunity in the cartoon case to stand for a simple concept- freedom of speech, which is not a Western value. Freedomof speech is a universal human right, which has existed sincethe emergence of speech. Every dictator uses a rebuttal alongthe lines that democracy, freedom of speech are foreign con-cepts, belonging to 'them,' while 'we here have our own values.'

Palestinian boys burn a portrait of Danish Prime Minister Anders Fogh Rasmussen as they hold up copies of the Koran during a protest, against cartoons depicting

the Prophet Mohammad that were published in European papers, in Rafah, southern Gaza Strip February 13, 2006.

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What do 'they' have, actually? What is the reverse of democ-racy and what is the reverse of the freedom of speech? Thereis, however, no understanding in the West that the extremes ofpolitical correctness obscure the truth and, on the bottom line,kill the very concept of political correctness. If you are afraidto speak, then others will speak for you - no, they will screamand will even forbid you to speak at all. Just like it happenedin the cartoon case.

Another 'demon' marches in the East - the theory of conspiracy.There is a conspiracy against 'us,' 'a secret government' is man-aging everything in spite of what we want; what shall we do -

they want to have us cheated out!

And that is how it begins: mobs swear at cartoons, which theyhave never seen. Serious people see a U.S.-Israeli plot (thecartoons were not published in the United States, but you see,this is a clever and perfidious move). An Iranian writer evenannounced that Tom and Jerry were an Israeli plot to brain-wash children, as it rehabilitates (we have been stupid enoughnot to see it!) a treacherous pest, the mouse. We are not dis-cussing here human stupidity, whose boundaries are far awayin the infinity. We are discussing a mindset that seeks expla-nation to your problems everywhere in history, geography andmythology but not in what you do.

Armed with these "weapons" of stereotype and prejudice,namely the conspiracy theory and the extremes of politicalcorrectness, the West and the East are not capable or reach-ing far ahead of Huntington. In Brussels, Chaussee de Monsis at a ten minutes walk from the refined baroque and unbri-dled bourgeoisie of Grandе Place. One could not even start toimagine a longer distance nowadays.

The distancing of the West from the East is blocking also theinternal processes of change in the Muslim world. Arabregimes are not in hurry to revert to democracy. Hamas is inno hurry to denounce terrorism. The worst possible nightmarehit the European newspapers in late February: the first signsof a civil war in Iraq.

The tensions between Sunni and Shia are not only a day old;the complex debate about who is the direct successor ofMohammed - Ali (as the Shia claim) or Abu Baqr (as theSunni claim), has sparked many conflicts, with the warbetween Iran and Iraq bringing the biggest bloodshed in thelate 20th century. This time however the signs are sinister:when mosques are blown up, you blow up minds and fire uppassions. Iraq continues to be unstable, besides, the Shia fac-tor is especially sensitive due to the nuclear ambitions of Iran.

Huntington claims that the borders between civilizations arepregnant with conflicts. Maybe the internal civilizational bor-ders are even more pregnant? The clash between Catholicsand Protestants in the 16th century rocked the West, todayShia and Sunni in Iraq are stubbornly brewing the same bittersoup of hatred.

Bulgaria is surely among those who are trying to disproofSamuel Huntington. The Harvard professor allocated Bulgaria inthe realm of Orthodoxy - somewhere between Russia, Serbia

and Ukraine, while in the real world Bulgaria is actually primingto join the European Union. "Your place is among us, my grand-pa would welcome you," Patrick, the grandson of Europe'sfather Konrad Adenauer told me. "We have profited from glob-alization, and now we have to help you." He repeated,

Bulgaria is a part of Europe.

Even if we do not pay attention to the fact that Bulgaria hasshattered prophecies and is outwitting fate, this country hasfocused on the dilemma - 2007 or 2008. "I wish we had yourproblems," many in the rest of the world would say.

Maybe Bulgaria is on the right track. One of the possible waysout of Huntington prophesies is the strengthening of Europe.Rolf Falter, Belgian historian and journalist, agreed with this."Europe is much smaller than India, China, the United States.There could be no vindication if we fail to act together," he said.

It is still too early to talk about actions, but Bulgaria has beengiving two curious signals to the public debate. First, twoBulgarian newspapers published the cartoons, but the debatefailed to leave the punditocracy in the media. The danger of acivil war in Iraq is not a topic here. Bulgaria is susceptible to"Eastern" conspiracy theories - and that could be seen in thedebates, the insinuations and the passions around nationalism,minorities and the National Liberation Day on March 3.

I was on the verge of saying that, basically, Huntington is right:the evidence that Bulgaria is not a Western state, came fromthe fact that the extremes of political correctness have barelypenetrated the lands between the Danube and the Rhodopes.I was about to say that, when I remembered what happenedto me when I told in public

a joke about globalization:

"A dark night in Belfast. A man, walking in the street, sudden-ly feels the barrel of a gun pressed against his head: "Are youa Catholic or a Protestant?" The man replies: "No luck, Sir, Iam a Jew." "On the contrary," said the mugger. "I am the hap-piest Palestinian in Belfast."

On the very next day I received several angry letters and accu-sations in violating the political correctness, although it was notquite clear in whose favor - of favor of the Jews, Palestinians,Catholics or Protestants. If we go on like this, Bulgaria willundoubtedly become Western. But then we would not be ableto joke about anything. I wonder whether the riot against thecartoons was borne out of a similar attitude. Fanatics lookalike just as people without a sense of humor look alike.

I left the Syrian restaurant in Chaussee de Mons with the feel-ing that I was missing something. Then I suddenly remem-bered: the grill was perfect, and the restaurant owner was real-ly pleasant. This did not tie up neither with the fear of thethree beers nor with the shadow of unrest in the Arab quarter,or with the prophesies of Huntington.

I have been taught to never make far-reaching conclusions outof a good dinner. Still… Aren't we - and they - fearing morethan necessary? ■

AmCham EU held a briefing session forECACC members Feb. 19-21, 2006, toexplore current European Union policyissues, and discuss ways in which theAmCham network in Europe can collab-orate on policy and lobbying activities.AmCham Bulgaria was represented byOlga Borissova, board member andchair of EU Affairs Committee andExecutive Director Valentin Georgiev.

The EU briefing included meetings withEU Commission representatives andmembers of the European Parliament aswell as briefings with US governmentofficials. A visit to the EuropeanParliament and the Committee of theRegions was organized as well to seehow the Parliament works and what isthe role of the Committee of theRegions. One of the most interestingparts was the updates on policy issuesfrom industry representatives which hap-pen to be members of differentAmCham EU Committees.

AmCham EU Executive Director SusanDanger gave a very profound presenta-tion on the priorities of the chamber for2006. In 2006 AmCham EU focuses on

12 big policy areas, among which: betterregulation, services directive, CommunityCustom Code, REACH directive, StateAid, Energy Efficiency, IPR, TVWF direc-tive, Working Time Directive, Doha

Round of WTO negotiations, FinancialServices and Company Law issues,Nutrition.

The work of AmCham EU is based on a

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AmCham Bulgaria Meets AmCham EU

The briefing sessions took place at the new premises of AmCham EU

ECACC members in the European Parliament

members-driven approach. Rapporteurson different topics present reports onwhich the committees of the Chamberbase the position papers of the organiza-tion before the EU institutions. On variouspolicy areas the committee chairs presentbriefings to the members and the advo-cacy plans are created as follow-ups.

Belgium, Finland and Bulgaria presentedto ECACC members the lobbying prac-tices in the respective countries. OlgaBorissova talked about the internal lob-bying mechanisms in Bulgaria, whileValentin Georgiev presented AmChamexperience in assisting the process ofthe bilateral negotiations between USand Bulgaria on the Treaty onAvoidance of Double taxation.

AmCham Bulgaria representatives metwith Gwen Lyle, standards attache at theU.S. Mission to the European Union, anddiscussed the organization of severalU.S. commercial mission visits toBulgaria on a number of seminars for EUstandards and public procurement policy.During the meeting with the Bulgaria’sAmbassador to EU, H.E. StanislavDaskalov, the chamber presented theactivities of its EU Affairs Committee. Itwas further discussed ways to co-oper-ate with the Embassy in facilitation of thedialogue between business communityand the EU institutions. ■

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A $250 million project has been ham-

pered by Bulgarian government institu-

tions, which is a bad sign for foreign

investors, warn in an open letter to

prime minister Sergey Stanishev

American Chamber of Commerce in

Bulgaria, the Bulgarian International

Business Association (BIBA) and the

Employers Association of Bulgaria.

The business organizations expressed

their concern about the obstacles

posed to the two projects of Canada's

Dundee Precious Metals, which is the

concessionaire of the Chelopech mine

and is currently examining a gold

deposit near Krumovgrad.

In January 2006 an expert council at

the Ministry of Environment and

Waters put off the granting of a permit

to the Canadian company, which was

meant to implement technology for

processing of copper and gold con-

centrate and production of gold on the

territory of the Chelopech mine. Prior

to that, Dundee Precious Metals

received a silent refusal from the envi-

ronment ministry for its project for gold

ore mining at Ada Tepe near

Krumovgrad.

The company has been examining the

deposit since 2003. Both projects were

met with opposition by environmental

organizations. The three business

organizations, whose members are

mainly foreign investors, are seriously

concerned by the passive attitude of

the government institutions. This puts

at risk not only the implementation of

the projects, but also the economic

development and employment situation

in the respective municipalities, the let-

ter reads. More than 500 people may

lose their jobs, AmCham and BIBA

warn.

According to AmCham, this mars

Bulgaria's image ahead of the coun-

try's EU accession. Since September

2003 Dundee Precious Metals Inc. has

invested $46 million in its two projects.

The company plans to invest another

$175 million in increasing production

and installation of production facilities

at Chelopech, as well as $75 million in

mine development at Krumovgrad. ■

AmCham, Business AssociationsWorried About Mining Project

Alessandro Profili,

AmCham EU and

Mark English, European

Commission talk on the

current status of the

Lisbon Agenda

The plenary hall of the

European Parliament

will welcome in very

near future 18 European

MPs from Bulgaria.

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Standardization is a voluntary processwhich comprises several key elements.

Above all, Standardization is based onconsensus among the main economicplayers: industry, small and medium-sizedenterprises, consumers, producers, envi-ronmental NGOs, public institutions.

Second, it is carried out by independentstandards bodies, acting at national,European and international level. TheEuropean Standards Organisations areCEN (European Committee forStandardization), CENELEC (EuropeanCommittee for ElectrotechnicalStandardization) and ETSI (EuropeanTelecommunications Standards Institute).

Third, European standards are a powerfulmeans of enhancing the competitivenessof enterprises in the EU, and developingtrade and the single market, innovations,information and communication technolo-gies, public procurement, and areas suchas transport, energy, etc. Standards offertechnical solutions to problems and facil-itate trade, cooperation and better man-agement across the EuropeanCommunity, removing trade barriers at theinternational level.

Fourth, they safeguard the health, safetyand environment of Europe's citizens byimproving the effectiveness of Europeanpolicies in those areas. Standards help totransfer and disseminate technology,increase access for people with disabili-ties, and recognise population ageing asone of the major problems in Europe.

Fifth, Standardization enhances the cre-ation, implementation and simplification ofthe acquis, especially in the sphere of freemovement of goods, reducing the cost ofdoing business in the European Union.

In this sense, standards are defined as'documented, voluntary agreements whichestablish important criteria for products,services and processes.' Standards,therefore, help to make sure that productsand services are fit for their purpose andare comparable and compatible. For astandard to be European, it has to beadopted by one of the European stan-dards organisations and be publicly avail-

able.

Although customs duties on imports fromone EEC member country into anotherwere eliminated as early as 1968, this didnot automatically lead to free movementof goods across a common market. Theprominent French statesman JacquesDelors, who became president of theEuropean Commission in 1985, was thechief architect of the so-called WhitePaper on the Completion of the InternalMarket. The White Paper identified 272legislative measures needed to eliminatemost of the barriers to trade within theCommunity that still remained after thecreation of the customs union. To ensurethe free movement of goods, Delors pro-posed a new revolutionary approach -namely, their classification into four maincategories depending on the actual orpotential risk which they pose to the lifeand health of humans, animals or plants,the environment and public safety.

The first category includes productswhich do not pose any risk when used(e.g. textile products, furniture, footwear).

The second category includes productsthat pose some risk, but it is assumedthat the national legislations of the mem-ber states are sufficiently precise andharmonised to ensure their safety, there-fore there is no need for special legisla-tion at the EU level. The principle applic-able to such products is that of mutualrecognition (these include most foodstuffsand consumer goods).

The third category comprises productsthat pose a significant risk. These includechemicals, herbicides, food additives,building materials, medicines, cosmetics,etc. They are subject to the old approach- setting detailed European standards.These standards are set by the two mainEuropean Standards Organisations: theEuropean Committee for Standardization(CEN) and the European Committee forElectrotechnical Standardization (CEN-ELEC). Detailed standardization is oftencalled vertical harmonization because itharmonizes all technical specifications ofthe relevant product.

The fourth category proposed by Delors

covers all products that do not fall withinthe other three categories. These areactually low-risk or medium-risk products:machines, equipment, toys, electricalproducts, transport vehicles, etc. This cat-egory is subject to the so-called NewApproach or horizontal harmonization ofstandards. Hundreds of standards areharmonized simultaneously, with legisla-tive harmonization being limited only tothe essential requirements concerning thesafety of humans, animals or plants, theenvironment and public interests.

The New Approach has significant advan-tages both for the process of standard-ization and for the legislative process inthe European Union. On the one hand, itsaves time and energy of the regulatorybodies and allows producers to choosewhich national standard to apply whilecomplying, however, with the requirementsof the relevant directive. On the otherhand, the New Approach is an additionallegislative technique which promotes part-nership between the European legislatorsand the European standardized communi-ty, i.e. the private sector. European stan-dards can help simplify the acquis,reduce the cost of doing business inEurope, and enhance competitiveness.According to European Commission data,European standards add 1 percent toGDP. At present, the New Approach isimplemented by way of approximately 20directives which are often called NewApproach Directives. The EU standardiza-tion bodies define the relevant Europeanstandards on the basis of those direc-tives.

There is also a fifth category of products,which is subject to the so-called GlobalApproach. This means supplementinghorizontal harmonization with mutualrecognition of certificates of compliance.The Global Approach is based on:

● Bilateral mutual recognition agreementson certification procedures and testingin assessing conformity with nationalmandatory standards. At the basis ofthese agreements is the adoption bythe EU of the quality management andquality assurance system of theInternational Organisation forStandardization at the UN (ISO). More

European Standards: Mission Possible?Dr. Olga Borissova,

Director, Centre for European Programs, American University in Bulgaria

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specifically, these are the ISO 9000and ISO 45000 series, which in EU reg-ulatory practice are called EN ISO9000 and EN ISO 45000.

● Direct application of voluntary globalstandards of ISO and of the InternationalElectrotechnical Commission (IES).

The Global Approach is applied primarilyin regulating international trade in aviationand space equipment, vessels, telecom-munications equipment, electronics andsome other high-tech products.

In principle, the ComprehensiveMonitoring Report concludes that Bulgariais generally meeting the commitmentsand requirements arising from the acces-

sion negotiations in the fields of horizon-tal and procedural measures, and sectorallegislation. At the same time, however,according to the New Approach as wellas according to Old Approach directives,there is uncertainty and fear that smallbusinesses which do not comply with therequirements of European standards willhave to be closed.

In fact, the businesses that fail to adjustto the conditions of the European singlemarket will be compelled to discontinueoperations because of uncompetitivenessor strong competitive pressure. The rea-sons for this may be poor technical stan-dards and poor quality of output andmanagement, low productivity, low energyefficiency, non-compliance with require-

ments concerning the environment andsafe and healthy working conditions, etc.

The European market offers opportunitiesand requirements. They have not beenintroduced with the aim of restrictingsome entrepreneurs to the advantage ofothers, but of creating equal conditionsfor competition that is at the highest pos-sible level, because this will be of benefitnot only to entrepreneurs but primarily toend users and the public at large.

Part of the opportunities on the Europeanmarket are related to the EU programsencouraging Bulgaria to build an eco-nomic environment that will helpBulgarian producers to enter or exit thesingle market. ■

Members Learn About EU Structural Funds Some 50 AmCham members and guests attended on Feb. 27

the joint meeting of the AmCham real estate and EU affairs

committees with a guest speaker Iskra Mihailova, deputy min-

ister of regional development and public works. She spoke on

the EU structural funds and the readiness of Bulgaria to use

those funds between 2007 and 2013. Bulgaria has already

adopted preliminary operational programs subject to funding

and approved the managing executive bodies (the different

ministries). Mihailova presented one of the operational pro-

grams - Regional Development and its purpose to mobilize the

regional recourses for the opportunities provided with the struc-

tural funding.

The main four priorities of the operational program Regional

Development are: City Infrastructure Development, Local and

Regional Connections, Steady Tourism Development,

Encouragement of Regional and Local Development.

"Having in mind the experience of the 10 new EU members, it

appears that the first year of the funding is the most difficult

in terms of utilizing the money," Mihailova said. For Bulgaria,

2006 should be a year of drafting projects in accordance with

the EU strict criteria, she added, because at the moment the

architectural and engineering planning in Bulgaria is poor and

far from the EU quality. Bulgarian managers cannot expect

that foreign experts will help with consultancy when drafting

the projects, said Mihailova.

The issues of EU structural funds were discussed also on Jan.

31 within the EU Affairs Committee during a practical seminar

"ABC of EU Structural Funds Competitiveness - Operational

Program, Financial Opportunities and Challenges" presented by

Stanimir Barzashki, executive director of Small and Medium

Enterprises Promotion Agency.

"It is very important to stimulate a public discussion together

with the NGOs on the EU funds and fulfillment of criteria in

order to raise the competitiveness of the businesses when

doing a project," Barzashki said. At the moment the business-

es are not well prepared to make good projects and it is nec-

essary for the companies to change the planning from budget

one to a program planning, he added. ■

Boris Chernev, Rockwell/Intelpack speaks with Iskra Mihailova, Ministry of

Regional Development and Public Works and Tanya Kosseva-Boshova.

Some 50 AmCham members, guests and media attended the event with Iskra

Mihailova, Ministry of Regional Development and Public Works.

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Some 100 participants, including repre-sentatives of the Justice Ministry, USAID,attorneys, and several managers fromleading Bulgarian companies celebratedthe opening of the AmChamCommercial Mediation Center. TheCenter held its inauguration ceremonyon Feb. 16 at the Grand Hotel Sofia.

USAID Bulgaria Mission DirectorMichael Fritz, and Deputy Minister ofJustice Sabrie Sapundjieva opened theevent by thanking AmCham for the cre-ation of the center and emphasizingtheir continued support for making com-mercial mediation a viable method forsettling business disputes. This is theninth center of this kind to open inBulgaria after the country accepted amediation law in 2004.

AmCham President Kenneth Lefkowitzsaid that the creation of the center pro-vides the chamber's members with anadded tool to improve their business'overall performance. In the opinion ofValentin Georgiev, AmCham ExecutiveDirector, Bulgarian businesses haveabdicated from responsibilities whenrelying too much on the court system inthe country which is slow and not effi-cient enough. The mediation aims to

create new culture in business and helpbuild cooperation instead of confront.

Commercial mediation is a confidentialand voluntary settlement process inwhich an impartial third person - themediator - works with the parties to adispute to help them find an acceptableresolution. The process is particularlyappropriate for business-related dis-

putes because, unlike litigation, itenables the parties to preserve existingbusiness relationships, and often resultsin strengthened business arrangements.

Commercial mediation joins a long listof legal reforms that are currently beingimplemented in preparation for thecountry's accession into the EuropeanUnion. For the past year, CLRP advisorshave been working closely withAmCham to support the establishmentof the mediation center. As part of itstechnical assistance campaign, CLRPstaff assisted the center draft its inter-nal rules and documents, adopt proce-dures for managing their case files, andimplement systems for evaluating andmaintaining the quality of their mediationservices. The opening of the commer-cial mediation center gives disputingparties the option of mediating their dis-pute over a few days instead of waiting

several months or years to litigate theirclaim in the Bulgarian court system.

Until its anticipated completion inSeptember 2006, CLRP's team will con-tinue working with AmCham to assist thecenter mediate cases and popularizemediation among Bulgarian businesses.The opening of the center, as well asthe continued support from the Ministry

AmCham Opens Commercial Mediation Center

Some 100 participants, including members from the Bulgarian Ministry of Justice, USAID representatives,

attorneys, and managers from leading Bulgarian companies celebrated the opening of the AmCham

Commercial Mediation Center.

AmCham President Kenneth Lefkowitz said that the creation of the center provides the Chamber's members

with an added tool to improve their business' overall performance.

of Justice, USAID, and CLRP, will helpinstitutionalize commercial mediationinto the framework of Bulgaria's disputeresolution process.

The Bulgarian TelecommunicationsCompany Group General CounselRichard Clegg announced that BTC isgoing to solve potential disputes withbusiness partners through mediation pro-cedures. He said that BTC will offer to

providers to solve conflicts with a medi-ator in order to keep away from litigation.BTC has a lot of contractors throughoutthe country and the company is aimingat longer partnerships with them. Themediation helps to keep good relation-ships and in addition is a much cheaperand quicker procedure, Clegg said.

Rossen Kolev of Vector Management, acompany dealing with a management of

construction and investment projects, isalso keen on using of the mediation pro-cedures. This is a good Western prac-tice to solve disputes and it has alreadyproved it works, Kolev said.

The American Chamber of Commercein Bulgaria has 220 members and eachcompany could solve conflicts with theirpartners through the AmCham media-tion center. ■

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Kenneth Volandes, CLRP opened the event and featured in general some mediation procedures and rules.

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We often watch the evening news to hearabout people and events far away fromus. Wars, corruption, Academy Awards,elections - they all seem to concern aworld different from ours. Members ofAmCham Toastmasters Club, however,had the opportunity to see that theseseemingly different worlds are actuallyaspects of the same reality. The occasionwas the meeting with U.S. AmbassadorJohn R. Beyrle on Feb. 22, 2006.

Every second and fourth Wednesday ofthe month, the AmCham ToastmastersClub meets to hear prepared andimpromptu speeches. The members ofthe club have fun relaxing from their busyschedules and improving their presenta-tion skills. Guests at these meetings tellthem that their efforts are not isolated andthat others share their passion for meet-ing new people, for speaking in public andconstantly improving oneself. But theirwork has always been private - the goalis to improve yourself, the effort is individ-ual and the reward is often intangible.This world is not the world of mediaevents and publicity.

The media and popular figures from thenews can become a part of theToastmaster's world and the visit of U.S.ambassador was a perfect example of

such a merger. The Ambassador Beyrlevisited AmCham Toastmasters Club todeliver a speech on communication with-in the diplomatic circles. He spoke aboutmeetings with Colin Powell and GeorgeW. Bush, about deciding on how to influ-ence the leaders of states involved inconflicts. Suddenly the voice of this manbrought into the room the issues of inter-national politics that are part of the news.With it came the realization that the worldof international politics shares many of

the questions and concerns of our worldas Toastmasters - to have a clear andconcise message which to transmitthrough appropriate symbolism, to cap-ture the attention of the audience andmotivate the people listening to you topursue their goals, to treat them withrespect being aware of their needs anddesires.

The ambassador reaffirmed the closematch between these two worlds by stay-ing until the end of the meeting when heanswered the questions of his audience.He was able to show how important it isto be able to answer unexpected ques-tions delivering impromptu mini-speecheson a variety of subjects, ranging from thehonesty of presidents to social-economi-cal factors in international relations.

AmCham Toastmasters Club, with itsmission to enhance communication andleadership, brings together ambassadorsand teachers, lawyers and secretaries,news stories and ordinary life. If youwish to participate and see how theworld of celebrities mixes with the worldof ordinary people, join us for our regu-lar meetings. ■

AmCham ToastmastersClub WelcomesAmbassador Beyrle

Every second and fourth Wednesday of the month the AmCham Toastmasters Club meets to hear some pre-

pared and impromptu speeches. This time the occasion was the meeting with U.S. Ambassador, H.E. John R.

Beyrle on February 22nd, 2006.

Kenneth Volandes, CLRP, Ambassador Beyrle and AmCham members listen carefully to the speaker at the

Toastmesters meeting

By Dobrina Vassileva

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50 Race in AmChamSki Tournament AmCham Ski Tournament for non-pro-fessionals attracted some 50 partici-pants on Feb. 25. The ski runs aboveAleko on Vitosha mountain hosted twodisciplines and four categories: men,women, children and team. With greatenthusiasm and high spirits, 45 compa-nies and individual racers ran for theAmCham prizes. The ski show was cov-ered in the news of bTV, BulgarianNational Radio and 24 Chassa daily.

Alexander Savov of Pain d'or placed firstamong men, Orlin Mladenov, BalkanStar came in second place, andAlexander Milanov, Balkan Star, wasthird.

Evgenia Stoichkova of Coca-cola placedfirst among women, Velina Savova, Paind'or, came in second, and DesislavaKulelieva, a journalist from 24 Chassa,placed third.

Balkan Star placed first in the team cat-egory, followed by Pain d'or andTechnoLogica Ltd. In a special categoryfor children, Ivo Benatov ofBenatov&Partners won, followed byElena Dimitrova, American University,and Valentina Mihailova, 3M.

On Febraury 25

at Aleko

Vitosha

Mountain

AmCham Ski

Tournament for

non profession-

als attracted

some 50 partici-

pants in two

disciplines and

four categories:

men, women,

children

and team.

The competition

was followed by

a cocktail party

at the ski hut at

Aleko

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In the snowboard race Eric Anderson ofthe Anglo-American School placed first,followed by Dimitar Borissov, AmericanUniversity, and James Anderson.

The main sponsor of the event Niveaand Moten Sport made the competitionpossible. Coca-cola and Pain d'or pro-vided soft drinks and croissants for theparticipants. The awards were suppliedby Alexandrov Group Corporation, AlliedPickfords, AVON Cosmetics, HiltonSofia, Radisson SAS Grand Hotel andRossignol. ■

Moten dance girls amused the audience at AlekoIn the men

category

Alexander

Savov, Pain

d'or placed

first, Orlin

Mladenov,

Balkan Star

came in sec-

ond place

and

Alexander

Milanov,

Balkan Star

in the third

place.

In the women

category

Evgenia

Stoichkova,

Coca-cola

placed first,

Velina

Savova, Pain

d'or came in

second place

and

Dessislava

Kulelieva, a

journalist

from 24 chasa

placed third.

There was a

special catego-

ry for chil-

dren, where

Ivo Benatov,

Benatov&Par

tners placed

first, followed

by Elena

Dimitrova,

Amercan

University

and

Valentina

Mihailova,

3M on the

third place.

Except for the skiing, there was a snow-

board race where Eric Anderson, Anglo-

American School placed first followed by

Dimitar Borissov, American University

who placed second and James Anderson

on the third place.

Balkan Star placed first in

the team category, followed

by Pain d'or and

TechnoLogica Ltd.

AmCham is thankful to the main sponsor of the event Nivea and the support of

Moten Sport which made the competition possible. The awards for the racers were

kindly supplied by Alexandrov Group Corporation, Allied Pickfords, AVON

Cosmetics, Hilton Sofia, Radisson SAS Grand Hotel and Rossignol.

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To any local or international observer,the direction of the communicationsconsultancy market in Bulgaria is clear- it is moving upwards and that promis-es to continue. Hopefully the macroeco-nomic indicators will keep supportingthat trend. Still, the pace of the marketand volumes will be determined by thequality of the services offered. There iscertainly good demand but it maydecrease or be redirected if the clientssense the slightest hesitation that theyare not receiving the highest value fortheir money. Overall market and practiceimprovements are obvious and this willmake more and more clients takeadvantage of our kind of high-level cor-porate communications and publicaffairs consulting services.

There are some positive developmentsin the local PR market. The recentlypassed ethical code is a good sign, andthe on-going debate about "best prac-tices" of evaluating results - for example,providing analysis of news coverage, notmerely clippings - should also continue.Another strong trend is in the trainingarea, that is upgrading the PR profes-sionals' background knowledge througheducational programs. Yet there is noroom for complacency as the earning oftrust - of society, media and clients -- isa process that takes time.

In this regard, it is great to see that theBulgarian PR community is wasting notime and is determined to remedy someproblems from the past. Solving theseissues is a question of gradual change- and honest desire to change - andthere is not such a big differencebetween Bulgaria and Romania, forexample, concerning this matter.Nowhere is media system perfect but itis easy to see that in Bulgaria it hasbeen changing and is much more openthan ever before.

The foul play won't disappear overnight.

However, strong and free media with thesupport of the PR experts and the gov-ernment will lead to further positivechange. At Mmd, as a consulting net-work operating in 17 countries acrossthe CEE and CIS region, have seen thischange occur different speeds acrossthe region. The more transparent theworking process, the better for all par-ties involved. This is exactly how weoperate as a company, through opendialogue and ethical practices withmedia, clients, suppliers and others

The profile of the PR professional will

keep developing over the next five to 10years. We will see more experts fromvarious backgrounds such as law, eco-nomics, political and social sciences tojoin the profession. That is a processthat took place in numerous further-developed markets along with the spe-cialization and the segmentation of theservices.

The youth of both reporters and PRpractitioners here is also part of themarket's challenge as well as being"part of a new generation" - this too isgood, because they have different per-

No Room for Complacencyin the PR Business Andy Trincia, Country Manager of Mmd PR agency - Bulgaria and Romania

Special to AmCham Magazine

Andy Trincia was born in the United States. He started his career as a news-

paper journalist. After entering the PR arena, he worked for the International

Franchise Association in Washington, D.C., and also Wachovia Corporation, a

Fortune 500 bank, and Fidelity Investments, one of world's largest asset man-

agement firms. After leaving Fidelity, he joined the U.S. governmental and

humanitarian agency Peace Corps as a volunteer in Timisoara, Romania, where

he worked for two years as a consultant at the Chamber of Commerce, as well

as a university lecturer. Before becoming Country Manager for Bulgaria and

Romania,, Andy Trincia was Communication s Manager for The Boeing Company

in, California.

spective on the world and in business.After a two-year stay in Romania andhaving recently returned, I see that theyoung people here are very similar. Theyare very eager for changes and they

want things to get better quickly.

The PR profession must remain con-scious of the local specifics but at thesame time look to build a mixture ofregion-specific knowledge with interna-tional expertise. This is how most of theinternational consultancies are shapingtheir networks, as Mmd did years ago,and the strategy is a proven one. Andthis combination is what most of themultinational clients prefer. At the sametime the next wave of companiesrequiring high-level communicationsservices are Bulgarian companies, notonly the multinationals that make up themajor part of our business. We alreadyhave started to speak with these localcompanies and are helping them identi-fy their needs for professional PR ser-vices. As the EU accession processaccelerates, these firms are willing toreceive international best-practiceexamples and cross-boundary support.And their expectations are becomingquite high, which is promising and wellexpected.

Improvement of quality services and theoverall PR and media environment, as

well as the fight against complacency,should be a healthy routine. That is whyin the Mmd network we challenge whatwe do on a daily basis. Once a year, allof our offices gather to look at the mileswe have walked and assess them withthe help of industry leaders anddemanding clients - some of the biggestnames in business - who will need moreand more specialized services with thefurther development of this market.There is only one way to go - up! ■

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Andras FEHERVARY, Eli Lilly Corporate Affairs

Director, CEE, EMEA, Russia & CIS, at the Mmd

Annual Conference, pointing out the key challenges

ahead in the PR in the pharmaceutical business in

2006 and beyond

Lord Chadlington, Chief Executive of Huntsworth

and founder of Shandwick, to the Mmd audience: "I

am a huge believer in never giving up. My motto on

my crest and shield in the House of Lords is "Never

Give Up."

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arch 2006 UniCredit and Bank Austria Creditanstalt, a member of

UniCredit Group, announced on Feb. 27 they are planning tomerge their Bulgarian subsidiaries Bulbank, HVB Bank Biochimand Hebros Bank. Within the next weeks, a local project struc-ture would be set up to work out and coordinate all necessaryactivities. The planned integration of the banks should takeplace in 2007 and is subject to the approval of all relevantauthorities. During the integration process, the banks will con-tinue to operate in parallel. The already started merger processof HVB Bank Biochim and Hebros Bank will be completed inthe second half of 2006.

As a first step, UniCredit and Bank Austria Creditanstalt nomi-nated the designated top management of the merged bank.

Levon Hampartzoumian, currently chairman and CEO ofBulbank, has been designated as chairman and CEO of themerged bank. Peter Harold, currently chairman and CEO ofHVB Bank Biochim and Hebros Bank, will become generalmanager of the new bank. Andrea Casini, currently COO ofBulbank, has been nominated as deputy general manager ofthe new bank. All nominations are subject to the approval ofthe local authorities.

The planned merger of Bulbank, HVB Bank Biochim andHebros Bank will create the largest Bulgarian bank with totalassets of 3 billion Euro, 326 branches and over a million cus-tomers. The new bank will be a part of the largest banking net-work in Central and Eastern Europe. ■

EBRD Chief Jean Lemierre, together with EBRD Director forSouth-Eastern Europe and the Caucasus Olivie De Camp andEBRD Director for Bulgaria John Chomel-Doe, visited Eliaz-Dobrevi factory in Sofia on Feb. 9. Eliaz-Dobrevi provoked theinterest of EBRD as one of the most successful energy effi-ciency projects in the sector. The factory for paste productsand confectionary is one of the projects that was granted aninvestment loan of 600,000 Euro by Postbank under the EBRDprogram for energy efficiency.

During his visit to Eliaz-Dobrevi EBRD Chief Jean Lemierrecalled the Company "a good example of enterprise" and point-

ed out that its energy efficiency program is an impressiveachievement. EBRD gave special placates to Postbank andEliaz-Dobrevi and congratulated them on the successful imple-mentation of the project.

The loan, granted at the end of 2004 to the company producingflour, bread, pasta and confectionary, was used to substitute thesemi-automatic bread production line with a new fully automaticbread line, powered by natural gas. Thus, the company saveselectric power of up to 2.304 MWh per year, which amounts to89,719 Euro. The total annual savings of the company from theenergy efficiency project amount to 155,983 Euro. ■

Bulbank, HVB Bank Biochim and HebrosBank to Merge

EBRD Reps Visit Energy-Saving Factory

EurOmax Resources Limited and Teck Cominco Limited haveexecuted a farm-in agreement under which Teck Cominco willfund exploration on the Trun property in western Bulgaria.

Subject to regulatory approval of the transaction, Teck Comincowill invest $700,000 as a private placement in EurOmax at$0.25/Unit. Each Unit will be comprised of a share and a two-year warrant exercisable at $0.45 for the first year and $0.65for the second year. In addition Teck Cominco will have anoption, exercisable on the first anniversary of the agreementprovided EurOmax completes an initial program of not less than$280,000 at Trun, to elect to earn a 55-percent interest in theTrun property by spending $3 million over four years.

If Teck Cominco elects to pick up the option with respect to theTrun property, it shall exercise sufficient warrants to provideEurOmax with additional minimum proceeds of $1 million. UponTeck Cominco earning its interest, it shall have an option toincrease its interest to 70 percent by spending an additional$10 million. If Teck Cominco earns a 70-percent interest in theTrun property its total investment will be approximately $14.7million.

The Trun license covers aerially extensive granitoid hosted golddeposits at the Big Hill and K-granitoid prospects. Within the K-granitoid area, mining was conducted at the 700 meter long KDopen pit in the 1960s and at the Zlata mine with both open pit

and underground operations in the first half of the 20th centu-ry. EurOmax trenching encountered results of 40 meters of4.3g/t gold and 257g/t silver; 10 meters of 6.2g/t gold and 32g/tsilver; 24 meters of 3.56g/t gold and 18.5 g/t silver; 9.5 metersof 4.82g/t gold; 22.4 meters of 4.2g/t gold; and 27metres of2.97g/t gold. EurOmax drilling reported results including 108meters at 0.8 g/t gold and 18 meters of 1 g/t gold and 163 g/tsilver.

At Big Hill broad zones of vein stock working and alteration arefound covering much of the exposed Big Hill granitoid. Soilgeochemistry at Big Hill has delineated three parallel zones upto 600 meters wide over a strike length of 5 kilometers withgold values greater than 100 ppb. Peak gold was greater than3 g/t gold.

All geochemical results reported above have previously beenannounced by EurOmax. Mr. John Menzies, chairman & CEOof EurOmax, said: "Teck Cominco's recognition of the potentialof the Trun property in western Bulgaria and its significant com-mitment to further exploration is most encouraging. We wel-come Teck Cominco as a partner and look forward to workingwith them. We have been focused on this region for a consid-erable period of time and have a unique understanding of theregional geology and geopolitics. We look to bringing that valueto the relationship while Teck Cominco brings very significantfinancial and technical resources." ■

Global publisher Reader's Digest officiallystarted its business in Bulgaria on Feb.27. Jeremy Thomson, company's presi-dent for Central and Eastern Europe,Lubos Beniak, managing director for theregion, Cortina Butler, editorial director forgeneral books, and the country managerfor Bulgaria, Nelly Dimitrova, presentedthe publisher's activities and plans for theBulgarian market.

Reader's Digest is a world famous pub-lisher offering rich variety of periodicalpress, pictured encyclopedias, music col-lections, many books and short novels.The company offers its products mainlythrough direct marketing. Bulgaria is the70th country where Reader's Digest hasbecome operating since the company'slaunch back in 1922.

Reader's Digest starts its business toBulgaria by presenting "Discovering theWonders of the World." The book is aworldwide bestseller with more than a mil-lion copies sold so far. The company has

chosen this product because it is alsoexpected to provoke great interest in theBulgarian audience.

To popularize the book, Reader's Digestwill send a few hundred thousand lettersto randomly chosen addresses inBulgaria. In addition readers will find theletters in two Bulgarian newspapers at thebeginning of March 2006. In these lettersReader's Digest will present the book andwill offer a10-day free trial. Those whofind it interesting will keep it and pay bymail or bank order. Those who declinethe offer will be able to send back the

book at the publisher's expense.

Richly colored issue of "Discover theWonders of the World" tells stories aboutthe biggest and most beautiful naturallandmarks - volcanoes, deserts, glaciers,waterfalls - on all continents. The compa-ny expects to sell 60,000 copies inBulgaria during the first campaign. Thisnumber is few times over the ordinary cir-culation at which books are sold inBulgaria (about 2,000-3,000). Theseexpectations are based on the experi-ence from similar campaigns in othercountries around the world. The compa-ny's successful business formula hasproved itself through the years.

Reader's Digest's plans for 2006 includetwo more books, "Curing everyday ail-ments the natural way" in April and "One-dish meals," which will go on the marketin late summer. Later on beside books thepublisher will also present music records(everything from classical to jazz), as wellas documentary award-winning videos. ■

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EuroOmax Advances on Its Trun Project

Reader's Digest Lands in Bulgaria WithBestseller

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Postbank received the award for Bank of the Year at the pres-tigious exposition Banks, Investments, Money in Plovdiv onFeb. 19. The jury awarded the bank two more prizes - BestFinancial Product for American Express credit cards andLargest Corporate Donor in the Financial Sector for High Startwith Postbank social program.

"I am proud to take these prizes as an appraisal of our con-stant efforts to offer quality products and services meeting thelifetime financial needs of our customers," said AnthonyHassiotis, Postbank's CEO. He announced that this year againPostbank's priority is to offer flexible financial products, spe-cially designed for the Bulgarian market like American Expresscredit cards.

The second high-priority objective - socially important cam-paigns, will also find a significant place in the policy of thebank, announced CEO Hassiotis. This year, High Start withPostbank program for support of Bulgarian education will beextended and the Bank will allocate over 100,000 Leva forscholarships to high school and university students. ■

Postbank Sweeps Three Awards

n e w m e m b e r s

Mmd is the leading public affairs, cor-porate communications and public rela-tions consultancy operating in 18 coun-tries across Central and EasternEurope. The company implements pan-regional, single country & global com-munications campaigns for national andmultinational -including many Fortune500-companies. Mmd develops results-focused strategies and supports busi-ness objectives through its team of localexperts and experienced internationalprofessionals.

Contact:

Andy Trincia, Country Manager, Romania

& Bulgaria

Lilyana Zagorcheva,

Deputy Country Manager, Bulgaria

3, Victor Hugo Str.

1000 Sofia

Bulgaria

Tel: +359 (2) 946 1855

Fax: +359 (2) 944 4752

e-mail: lilyana.zagorcheva@mmd-bg.com

Diamed Ltd. was founded in 1996. Itscore business is the sales of variousdiagnostic products, medical suppliesand devices as well as medical equip-ment. Diamed Ltd. is the official repre-sentative and distributor in Bulgaria of

Becton Dickinson International, a med-ical technology company headquarteredin the United States. Our key customersare the main hospitals in Sofia andthroughout the country, private laborato-ries, medical centers and the industrialenterprises laboratories and are over350. Diamed Ltd. is a major partner in:● The program for control and preven-tion of HIV/AIDS carried out byBulgarian Ministry of Health andfinanced by The Global Fund;● National anti-tuberculosis programfinanced by Bulgarian Ministry ofHealth.The company is currently cooperatingwith some European companies in orderto present on the Bulgarian market spe-cial cosmetic and dermatological equip-ment like instruments for laser epilationand skin diagnostics. In 2005 Diamedwas awarded ISO 9001:2000 by Lloyd'sRegister Quality Assurance.

Contacts:

Dr. Mario Tanev, Dr. Dimeter Marintchev -

Managers

4, Hristo Tzenov str.

1407 Sofia

Tel.: +359 (2) 962 17 66

Fax: +359 (2) 962 17 53

e-mail: office@diamed.bg

www.diamed.bg

Yavlena Ltd.

was founded in1992. Originally

based in one office, the agency kept onexpanding and at the moment it has 18offices within the country-which includes:in Sofia - office "Rental", office "Sales ofresidential properties, business realestates and land" /Head office/, office"International, new development and pro-jects" and offices in all major towns andresorts in Bulgaria. The Agency workswith partners in the rest of towns inBulgaria in which we do not have anyoffices of our Agency, and in this way wehave an actively working network cover-ing the market and the related serviceswithin the boundaries of the country. Theagency deals with rentals as well assales and covers all segments of the realestate market, including these which areunder construction, so called-New devel-opment. The Agency also makesappraisal and management of real estate.Yavlena ensures its customers with thewhole gamut of professional services,associated with the real estate activities.

Contacts:

Strahil Ivanov, General Manager

Tel: +359 (2) 91410

Fax: +359 (2) 91410

E-mail: g.ignatiev@yavlena.com

Website: www.yavlena.com

Address: 9, Graf Ignatiev Str., Fl. 1

1000 Sofia

Bulgaria

From left to right: James Roaf, IMF Resident Representative in Bulgaria, Milen

Velchev, Deputy Chair, Parliamentary Budget and Finance Committee, Plamen

Oresharski, Finance Minister and Anthony Hassiotis, CEO Postbank.

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Few doubt that Bulgaria's wine tradition is one of the most col-orful pieces of cultural heritage the country will bring into uni-fied Europe. Bulgarians are known for their hospitality and tra-dition of sharing food and drinks with guests. Vine growing,wine producing and consumption have been important activi-ties for Bulgarians since ancient times probably because theselands have exceptionally favorable conditions for vine growing.Wine has a special role in all important rituals and celebra-tions.

Seven traditional Bulgarian wine varieties are not found any-where else in the world. Five of them are red: Pamid, Gamza,Mavrud, Rubin and Shiroka Melnishka; and two white, Dimiatand Misket. According to its climate and soils each geograph-ical region of the country cultivates different wine varieties. Forexample the Mavrud is cultivated around Plovdiv andAssenovgrad; the Shiroka Melnishka - only around Melnik; theRubin - around Plovdiv and Svishtov; the Gamza - aroundVidin, near Danube River.

A beautiful 9th-century legend illustrates how deeply connect-ed with the Bulgarian culture and folklore are these wine vari-eties.

The Bulgarian Khan (king) Krum forbade vine growing andgave an order all the vines in the country to be uprootedbecause his subjects were drinking too much. Anyone to breakthe law was threatened with a death penalty.

A few years later, one of the Khan's favorite lions escapedform the palace and roamed free in the capital city. The wholetown was frozen of fear. Soon after that someone managed tokill the lion. The Khan had announced a prize for the one who

had such strength and courage.

A poor old woman went to the Khan's palace and told him itwas her son Mavrud who has killed the lion. The Khan want-ed to know more about the hero. The mother didn't dare to sayanything at first, but when the Khan promised to award her sonwhatever the truth she confessed she broke the law andsecretly kept a vine to grow in her yard. She raised Mavrud onbread soaked in wine and that is how he became so strongand brave.

The story impressed the Khan so much that he decided toabolish his own law. The Bulgarians started growing vines andmaking wine again. The grateful subjects named a vine vari-ety after Mavrud. Nowadays the Bulgarians have a passion forthe wine called Mavrud.

A sort of Bulgarian wine often offered proudly to guests andfriends is the Pelin. Bulgaria has exclusive rights for its pro-duction and export in the EU as it has been produced heresince ancient times. It is a special kind of drink that has cura-tive powers. It is made from an old recipe that perfectly com-bines white wine, ten different herbs, apples and quinces.

Making Pelin used to be an important part of life and cultureof the region of Kalofer and Karlovo. People there collectedand dried herbs and fruits all the year round and made theirwine in the Fall. A household that did not have Pelin was con-sidered inhospitable. The wine was made for family and guestconsumption and rarely for sale. The best masters didn't sharetheir secrets. Today Pelin is produced industrially. The best onecomes from the village of Osmar in the Shumen region.

Even today many Bulgarians like to keep the tradition ofpreparing their own homemade food and spirits. Most peoplewho live in the countryside still distil rakia. Every third familyin Bulgaria produces their own alcoholic drink. Preparation forthe long winter includes the drying of herbs and mushrooms,pickling of vegetables, making jams and wine. This own homemade production is usually offered to guests with pride - "You

Bulgaria's Wine AddColor to Europe

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should taste my wine/rakia" is the phrase you will hear at eachtraditional Bulgarian home. You should not refuse or you mayoffend your hosts!

Despite the homemade production and relatively lower pricesof alcoholic beverages compared to Europe, Bulgarians do notdrink to get drunk but for joy, good health and mostly to enjoytheir social interaction over a drink. It's part of the tradition tolaugh at those who abuse alcohol. To drink without stoppingand to get severely drunk is actually shameful. There are manyfolklore songs and proverbs illustrating that: 'Even the mad per-son runs away from the drunk,' 'A drunk is like a ragged sack,'Bless the wine - curse drunkenness,' 'The first glass - forhealth, the second - for happiness, the third - for good time,the fourth - for madness,' 'Have a glass of wine - I hope itturns into blood for you.'

The first company to develop a program on these and otherBulgarian cultural specifics is ELC (EcoLogic Consultancy)Ltd. The goal of its team is to help expatriates succeed inthis country and develop a greater appreciation of Bulgaria, itspeople, and its culture. ELC is a member of SIETAR Europa(Society for Intercultural Education, Training and Research)www.sietar-europa.org ■

ELCs Contact Information:www.crossculturebg.com

email: elc@crossculture.bg Tel/Fax: + 359 2 872 14 83

mob: (+ 359) 899 817 204; 887 214 858; 888 435 890

A legend has it that Baba Marta (Grandmother March)

was the only sister among her 11 brothers - the other

months of the year. All 12 of them were skilled wine-

makers. Each one had their own vineyards and prepared

their own wine but they always drank it together. Baba

Marta often scolded her brothers for drinking too much.

She was warning them that when their wine was gone

she would not share her own wine with them. The broth-

ers only laughed at her.

One day she had had enough and decided to go and

take measures to protect her wine from them. However,

she found her vats already empty. At first Baba Marta

was furious - the sun was covered by heavy clouds. A

snow storm began. But as she thought it over, she real-

ized there was no point in being angry. These were her

own brothers who had drunk her wine, not strangers.

"The wine shouldn't stand for too long anyway," she said.

So Baba Marta smiled, the sun shined again and the

birds began to sing.

From time to time, Baba Marta remembers her rage. This

is when the weather turns bad. "Baba Marta is furious

again," Bulgarians say on such days. But she soon calms

down and the sun returns to the sky. Flowers and trees

start blossoming and the most beautiful season starts on

March 22.

iF YOUR ADWERE pLACED HERE,

• WOULD BE CONVEYED TO THE LEADING US, INTERNATIONAL AND

BULGARIAN COMPANIES OPERATING WITHIN BULGARIA;

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WHO DEMAND HIGH QUALITY PRODUCTS AND SERVICES;

• WOULD TRAVEL ACROSS THE EUROPEAN CONTINENT AS WELL AS THE

UNITED STATES, TAKING FULL ADVANTAGE OF THE INTERNATIONAL NET-WORK OF AMERICAN CHAMBERS OF COMMERCE;

• WOULD SERVE AS AN IDEAL NETWORKING OPPORTUNITY FOR POTENTIAL

FOREIGN INVESTORS AND BUSINESSMEN VISITING BULGARIA.

AMCHAMADVERTISING RATES

BACK COVER . . . . . . . . . . . . . . . . . . . . 1330 BGN

SECOND COVER . . . . . . . . . . . . . . . . 1220 BGN

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For more details please contact:

AmCham Bulgaria Office – Nadia Vakareeva, phone: 976 95 65, e-mail: nadia@amcham.bg AmCham Bulgaria Magazine – Milen Marchev, phone: 846 88 32, e-mail: magazine@amcham.bg

YOUR MESSAGE

THE RIGHT MESSAGE TO THE RIGHT AUDIENCE.

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I think about Camelia and in front of meappears this lovely lady, tender and beau-tiful, with penetrating blue eyes in the film"The queen of Turnovo." In my mind Ihear the song which I cannot forget"Don't look at me like that, boy."

We have been looking at her and listen-ing to her voice for over 30 years and wenever got tired, because she never tiredand she always managed to find newroads. Whatever she does is a result oflong preparation and discussing everysingle detail, but her innate artistry andcharm make us think that everything isvery easy, that everything connected withher is simply Mother Nature's or God'sgift.

We were listening to her singing at onejazz festival after another.

I was very happy when Roger Taylor fromQueen and Phil Collins paid her personalattention, and she turned to rock. One ofthe best surprises for me was whenCamelia told me that she was going backto the soul music.

Some 20 years ago she recorded a sin-gle in Germany with Aretha Franklin's"Chain of Fools." Camelia has been aqueen of Bulgarian jazz, so why not try toemulate the queen of soul?

I helped select the songs for the newalbum using my soul collection, but thechoice of material is exclusivelyCamelia's. The songs are examples ofthe best in this genre. Of course, theywere interpreted through Camelia's heartand unique voice.

Included are Aretha Franklin's "Call me"and "Spirit in the Dark," "I Heard itThrough the Grapevine" by Marvin Gaywhich has many cover versions in allstyles; "Come Rain or Come Shine" byHarold Arlen and Johnny Mercer, whichwe know through unforgettable DinahWashington and Ray Charles, recentlyperformed by the new soul diva Mary J.Blige; there are two songs by wonderfulStevie Wonder - "Maybe your Baby" and

"You and I;" We must not forget the tal-ented daughter of Camelia - Rachel Row- who wrote "You - Me" & co-wrote "Doright" with Zhivko Petrov. The album fin-ishes with "Gee Baby" and we all are leftwith the hope that more people will cometo see and hear Camelia in 2006.

Ray Charles had a vocal trio called "TheRaylettes." Here we have "TheCamelettes" - Rachel, Petia and Christina,who are adding atmosphere and vocalharmony to her performances. ■

Feels Like. . . a Grown-up Spirit

By Toma Sprostranov

A special concert of

Camelia Todorova

featuring the new album

"Feels Like" will take

place on April 8 2006

7 pm at the Mladezhki

Theatre "Nikolai Binev",

8 Dondukov Blvd.

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A Standard Series Stratocaster® guitarin Arctic White was auctioned during acharity event for the victims of the 2004tsunami disaster in November 2005, inDoha, Qatar. The final price of $2.8 mil-lion shattered the previous record set byEric Clapton's Black Fender®Stratocaster®, which fetched $959,500in June 2004.

Guests at the star-studded gala dinnerlaunching the 'Reach Out To Asia' char-ity drive dug deep into their pockets toraise almost $10 million.

The glittering 'red carpet' bash at theRitz-Carlton Hotel Doha, broughttogether more than 500 high-profile roy-als and celebrities from the world ofshow business, politics, sport and com-merce.

Guests included former U.S. PresidentBill Clinton, Virgin Atlantic founder SirRichard Branson and Germany's formerWorld Cup winning captain and manag-er Franz Beckenbauer, who is also thepresident of the World Cup OrganizingCommittee.

Guests at the function included theEmir of Qatar and his wife, HerHighness Sheikha Mozah bint Nasser AlMissned, the Heir Apparent and his wife,Her Excellency Sheikha Jawaher bintHamad bin Sohaim Al Thani.

Joining members of Qatar's ruling fam-ily at the dinner were a host of specialguests including Saudi Prince Al-Waleed bin Talal, Princess Haya, wife ofDubai's Crown Prince General SheikhMohamed bin Rashid al-Maktoum,together with Qatar-based diplomatsrepresenting many nations around theworld.

From the world of show business andsport, the galaxy of celebrities includedformer gymnastic Olympic gold medal-ist Nadia Comaneci, Hollywood actorJet Li, music maestro Jean MichelJarre and CNN news anchor andMaster of Ceremonies at the dinner

Richard Quest.

The auction turned into a nail-bitingaffair as bidding was fierce and com-petitive. Items sold, including their finalfetching price, were: Fender ElectricStratocaster guitar signed by legendsfrom the world of music ($2.8 million),a pair of Formula One Grand Prix pitpasses to any F1 event in the world($1.5 million), a luxury apartment in thenew Pearl development in Qatar ($2.5million), jewelry donated by Cartier ($2million), a Hermes bag for $220,000.

Canadian rock star Bryan Adams, whowas a special guest, auctioned off therecord-breaking Fender. The guitar hadbeen bought before by a member ofQatar's ruling family earlier that year for$270,000. Adams said he was person-ally moved by the tsunami in 2004 thatleft more than 200,000 people dead. As

a result, he worked with Fender®Europe's Jamie Crompton to get a gui-tar signed by numerous music starsspecifically for this charity auction.

The campaign reached 19 of rock'smost treasured artists to sign. Thesewere:

1. Jimmy Page (Led Zeppelin)2. Eric Clapton3. Mick Jagger (Rolling Stones)4. Brian May (Queen)5. Liam Gallagher (Oasis)6. Jeff Beck7. Pete Townshend (The Who)8. Ray Davies (Kinks)9. David Gilmour (Pink Floyd)10. Bryan Adams11. Tony Iommi (Black Sabbath)12. Mark Knopfler (Dire Straits)13. Angus Young (AC/DC)14. Malcolm Young (AC/DC)15. Keith Richards (Rolling Stones)16. Ronnie Wood (Rolling Stones)17. Paul McCartney (Beatles, Wings)18. Sting (Police)19. Noel Gallagher (Oasis)

Adams said afterwards: "I decided tolaunch a fund-raising event to benefitthose who had been affected by thedisaster. I asked my peers to sign onesingle guitar, which could be auctionedin aid of the cause, with the guitar act-ing as a kind of symbol of hope andsolidarity. The result was overwhelming,with everyone donating their signature."

He added: "With the donation of aStratocaster® guitar from Fender® anda very kind donation from Her HighnessSheihka Miyyassah Al Thani we willfinance two very important projects: therebuilding and supply of equipment fora school in Thailand and the construc-tion of a village sports center to providefacilities for seven village schools in SriLanka. My sincere thanks to all of myfellow musicians & friends for their time,generosity and kindness." ■

Based on information

from Fender Europe

Signed Fender Stratocaster ®

Becomes World's Most ExpensiveGuitar, at $2.8 million