Monthly Archives: March 2015

In the beginning of last month Latvia announced that it will support Romania and Bulgaria in their efforts to enter the Schengen zone. Ilgvars Klava, the Latvian Ambassador presented the priorities of the Latvian Presidency of the Council of the European Union. That happened in front of the National Assembly's Foreign Policy and European Affairs, as well as in front of the European Funds Control committees.

According to the Latvian Ambassador, the priorities of the Latvian Presidency include competitive, digital and engaged Europe. During the Latvian Presidency of the Council of the European Union will be organized more than 200 events including high-level political meetings, Eastern Partnership Summit and various related meetings. In addition will be organized 10 informal meetings of EU Ministers and the Asia-Europe Meeting (ASEM) of Ministers for Education. There are also plans for the organization of a Social Partners Forum, a Digital Agenda Assembly, an European Conference on Standardisation, an eHealth Week and so on.

According to the National Assembly Chair of Bulgaria there are three important points for Bulgaria – Latvia's support for Bulgaria's accession to the Schengen area, the focus on the improvement of the EU competitiveness aiming to achieve an economic growth and the fact that the Latvian Presidency supports the establishment of an European Energy Union.

The consulting company Cushman & Wakefield had recently presented a detailed global report discussing the most popular outsourcing destinations in the world. The report named “Where in the World? Business Process Outsourcing (BPO) & Shared Service Location Index” evaluates factors that are supposed to effect the successful operations of the different companies around the globe.

The report
The Cushman & Wakefield report ranks the best outsourcing locations around the world, assessing the risks, the costs, and the operating conditions. The report covers 36 markets all over world and is based on companies from the business process outsourcing services. According to that report Bulgaria makes it to the top place as the best outsourcing destination in Europe and reaches the third place on the global scale right after Vietnam and the Philippines. Compared to the report from last year, Bulgaria has made a record leap going 11 positions up the outsourcing ladder. The country is followed by Romania.

Risk, cost and conditions are the main key factors to be considered when ranking countries.
The key factors mentioned by the consultants when evaluating Bulgaria were the low taxes and the availability of affordable and highly-qualified workforce for the needs of the outsourcing companies. Annually in Bulgaria graduate around 60 000 graduates and in half of the cases the graduates have the necessary major and knowledge that is suitable for the sector services. Another key skill for the outsourcing business is the excellent knowledge of foreign languages. In fact 98 % of all students in Bulgaria who are enrolled in secondary school study a foreign language and 73 % study at least two foreign languages.

The rented Sofia offices
During the last few years, all markets around the world had gone through economic turbulence and many companies had to experience challenging situations. The global recession, followed by the debt crisis concerns in the Eurozone, as well as the unstable political situation brought many risks to all business sectors. Well-established within the outsourcing market, Bulgaria enjoyed an upward trend in the office rental market thanks to the outsourcing companies moving to Bulgaria and particularly to the capital Sofia. In 2014 the office space in Sofia that was rented reached 154 000 sq.m. These results have been valid on the office market in Sofia back in 2007, in the pre-crisis period.

Last year 49% of the rental market deals in the capital of Bulgaria – Sofia, have been signed with growing eco-companies from the outsourcing and from the IT sectors. According to the prognosis of the real estate agents, that growth will continue and will further be transferred outside the borders of Sofia. The realtors expect strong demand for suitable office space in other large cities of the country such as Plovdiv, Bourgas and Varna.

The Employees
Currently more than 25 000 people work in the outsourcing sphere in Bulgaria. The starting salary in the sector is around 1500 BGN, yet the experienced professionals get a monthly paycheck of 4 000 BGN. Since there is a demand for young and talented people, the outsourcing companies are even eager to pay bonuses of 250 BGN to their employees who bring new people in the office. Most often the companies that are outsourcing their business to Bulgaria work in the sphere of maintenance, programming, optimization of business processes, high technology.

Europe vs Asia
Resulting from the stagnant economies and labor markets in Europe, the difference between Europe and Asia as outsourcing destinations is melting. At the same time there are fears that some large Asian markets such as China and India, will soon overheat and start asking for a high cost of labor.

Despite all that however, the largest market worldwide for outsourcing services is still India even if it remains at 20th position in the ranking.

The Global Trends for the Outsourcing Sphere for 2015
• Costs: Rising inflation, labor and property costs in established outsourcing destinations (China and India) add to the attractiveness of the emerging locations.
• Value creation: The outsourcing providers start looking beyond the cost reduction and focus on customer care optimization and innovations.
• Outsourcing service provisions: The companies offering outsourcing services are now providing a combination of vertical solutions (such as health payer business processing, claims processing, and loan portfolio management) with horizontal solutions (such as HR, payroll, and supply chain management) in order to provide effective BPO strategies.
• Language proficiency: Very important aspect of the outsourcing destinations. Companies are looking for outsourcing countries where the employers are well educated and have multiple language skills.

In February the Deputy PM of Bulgaria spoke at a press conference of the Bulgaria of the Citizens Movement leadership’s meeting. There she stated that the presence of Bulgaria in the Schengen area is not only of great importance, but is also a matter of security. According to her, in case the position of Bulgaria is changed and it is accessed in the travel free borderless area of Schengen, in that case that will be a matter of security to the country and to the European territory in general.

Ms. Meglena Kuneva further stated that she understands why Bulgaria is being kept outside of the Schengen zone and that the country has issues according to the CVM reports, which concern the field of justice and the home affairs. The Deputy PM of Bulgaria said that she understands the wish for the rest of the countries in the Schengen zone to give us a push to do our job faster, yet they need to use another tool and not Schengen, as that is not appropriate now.

In the end of January the Bulgarian Interior Minister met with the German Internal Affairs Minister Thomas de Maizière. The meeting was part of the informal Justice and Home Affairs Council held which was organized in Riga, Latvia. The talks were organized in a constructive and open atmosphere, during which the cooperation between the two countries in the field of the home affairs was highly evaluated. The two countries evaluated their cooperation highly and expressed their readiness in the strengthening of that cooperation.

Germany stated that it will back up Bulgaria in its preparation for the EU Presidency planned in 2018. The Bulgarian minister informed the German Internal Affairs Minister about the current political situation in Bulgaria and which actions are to be taken in terms of the reform in the security sector and the judicial system. The Bulgarian government was encouraged by the Minister Maizière to continue with the reforms that are going on in order to achieve concrete measures that will bring visible results. The two ministers also discussed the Schengen bid of Bulgaria and the migration pressure. The German minister was also invited by his counterpart to visit Bulgaria.

The Bugarian Deputy PM of European Policies and Institutional Affairs has declared that Bulgaria is taking measures into being proactive and join the efforts of the European Union in its fight against terrorism. Bulgaria has already proposed the European Union to build a center against the arms traffic through the Western Balkans. According to Kuneva, there is a good location for that in Bulgaria and the state needs only administrative capacity to complete the task. The Bugarian Deputy PM declared that in front of the journalists in Brussels a month ago after meeting with Gilles de Kerchove, the EU Counter-Terrorism Coordinator.

Ms. Kuneva accounced that in May the European Commission will announce its new strategy that concerns the internal security. The Bugarian Deputy PM further stated that Bulgaria should actively participate in the preparation of that security and make its contribution in its capacity as an external border.

The Bugarian Deputy PM stressed that EC should not associate the Mechanism for Cooperation and Verification (CVM) report with the desire of Bulgaria to join the Schengen Area. According to Ms. Kuneva, the question with the Bulgarian membership in the Schengen Area is a matter not only of Bulgaria’s security but also of the EU’s security.