World competitiveness book

"The World Competitiveness Scoreboard presents the 2009 overall rankings for the 57 economies covered by the WCY. The economies are ranked from the most to the least competitive,"...

For Bulgaria, this year, the result is astonishly positive. Indeed the country is positioned 38 from 57, before countries like Poland, Hungary, Russia, Romania, Greece and so on. The important question is what the major reason for this success is. The answer is probably that the country is not as much linked to the international economy as other countries are. Moreover, the financial bubble probably exploded internationaly before it could reach its maximum proportion in Bulgaria, thus protecting the country from more severe consequences.

Not to be linked to the international economies may generate some advantages in this recession. It will definitely not help the country rebound at the end of the recession. Bulgaria is in need of a strong international positioning in specific services or production segments and of a basis of large, successful companies that will provide the necessary jobs and careers for the future. This clear positioning is missing and the basis to establish strong international companies is missing too. Very few companies have the necessary management, organisation and processes in place to ensure their success. Very few companies are able to take advantage of their low cost base and closeness to their customers. Very few companies actually look for customers.

It could be that, at the end of this recession, Bulgaria will still get the same score, but that this score will not be sufficient to position it at the 38 rank. The country and its companies are in need of restructuring.

Industrial sector in Bulgaria is contracting

Bulgaria’s industrial sector continued to suffer the most severe impact of the faltering global economy, with both output and sales shrinking by a double-digit figure for a third consecutive month.

Preliminary data of the National Statistical Institute (NSI) showed that in March alone, industrial production shrank by 17.1 per cent year-on-year, although expanding by 7.7% on the month. Analysts give more weight to the annual figure as it gives a clearer overall picture after seasonal fluctuations have settled.

Industrial turnover, which is seen as an indicator of demand, slumped by 20.7 per cent compared to March 2008. The processing industry again topped the total index of the industrial output, which rose 8.6 per cent month-on-month in March but fell by a steeper 24.1 per cent on an annual basis.

Source: Dnevnik

What we would be delighted to see is a concentration of the forces not only on reducing the number of employees that are directly productive, but on restructuring the companies' organisation to prepare it for the next growth phase. Indeed, it is the right time to reduce the amount of non value-added activities and optimise processes.