Nine observations on sustainable/ethical business in Bulgaria

On Monday this week I was in Sofia, Bulgaria, speaking at a conference on ethics and sustainability.

It was fascinating.

Fascinating because I've not seen quite such a united front presented at a conference in a long time.

This was a united front of business executives, their associations, and foreign diplomats.

All of them were keen to persuade the Government that sustainability, ethics and long term planning are key to the future of Bulgaria.

They are of course, completely right.

The agenda is here.

Usually government figures come into such conferences, make vague statements about supporting intellectual property, the rule of law and sustainable development, and leave, along with the media.

The last time I was in Sofia, three years ago, the conference I spoke at was operating at a much lower level, as far as I recall. 

This conference was a little different. The Bulgarian President, Rosen Plevneliev came, sat, listened, spoke convincingly about the need for transparency, accountability etc, and stuck around for two hours or more.

That meant the media stayed, and other presenters were able to communicate important messages to the audience and press.

Two other ministers also attended and spoke.

One of these, the Justice Minister Diyana Kovacheva, was formerly the head of Transparency International in Bulgaria. She also spoke convincingly. Her appointment to a senior government role is impressive, at least from my perspective as a naive outsider.

The conference was an impressive attempt to demonstrate what needs to change, and the opportunities in doing so for Bulgaria and companies operating there. My presentation is here.*

The American, Austrian and German Chambers of Commerce were the organisers. I'd argue this is a really important role for such chambers in emerging markets. Companies should encourage this kind of activity. 

It's clearly raised awareness of the issues in Bulgarian society. Speakers from the conference were all over the news. 

Here's what I picked up about sustainability/business ethics issues:
  1. Government and governance issues are king: The frameworks for business (rules, incentives, rulings etc) are not always clear. This has a major impact and clearly is a political priority. The Government is trying to plan beyond election cycles now, to prevent issues such as the recent feed-in tariff problem causing more "boom and bust" in vital areas of investment.
  2. Accountability and corruption are much higher up the agenda than environmental issues. It may well be because of who spoke at the event, but I didn't hear much, if anything, about green issues at the conference and in the various meetings I attended. Social issues, as elsewhere, come first.
  3. Large foreign investors are seriously concerned about their ability to invest in the long term due to constant changes. This relates to point one, but is worth making twice. Events such as the conference above are valuable ways to try and tackle this. Other Chambers of Commerce should take note.
  4. Change may be afoot: Ambassadors and diplomats are presenting a united front with companies via their associations in Bulgaria. Again, perhaps repetition, but such a show of unity can only help demonstrate how important issues of accountability and transparency are. The current Government now has to prove that they can implement that which they say is important.
  5. Institutions are a major challenge: Social capital and trust are low. This is common in many countries of course. More than two decades after the fall of the Soviet Union, we in the "West" forget that the institutions we developed on the back of centuries of trade and empire are not quickly created. They play a much more important role than is recognised. Companies can help. More on that, here.
  6. The media is not allowed by law to report good news about business. This is also the case in Hungary and other nations, as far as I know. This does not help companies communicate, but I suppose does help support media by encouraging advertising. On balance though, it does seem like quite a bad idea.
  7. The EU is cracking the whip on judicial reform in particular. Judges are badly paid, which does not help. The EU and others are perhaps, finally, raising their game on encouraging institutional reform.
  8. Lessons can be learned from the radical actions taken by other states: e.g. Georgia. One experienced development executive from a major foreign institution told me Georgia has taken drastic moves to improve the performance of their police in the last decade, and they have worked.
  9. Social media is having a major impact: Recent Facebook posted photographs of "lazy cops" have had a lot of publicity. Whilst social media has it's downsides for trust and social capital, on balance it's of course a great leveller and driver of accountability and transparency. 
 So there's my "blogger's list of nine things" I think I learned.

But as a total outsider there's a strong chance one or more of them is inaccurate.

I look forward to corrections and any comments.

*Full disclosure: I was paid a fee for speaking at the conference. 


 UPDATE: 18/11/12: Just a few days after the conference, Reuters reported that: "Bulgaria president blocks appointment of judge suspected of graft" This is clearly a sign these issues are finally being taken more seriously, at least for now.
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