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Small and medium business-motive power of economic growth

Tuesday, Jul 29, 2014

The most stable sector in Bulgaria at present is the one of the small and the medium enterprises. Despite the political crisis over the past year, the Bulgarian business kept self-control and continued to function. The small economic growth generated by the national economy is mainly due to our sector, contends in an interview for Radio Bulgaria the President of the National Association for Small and Medium Enterprises Eleonora Negulova.

What have Bulgaria’s authorities done in support of the small and the medium business over the past months?

“The current government actually managed to reimburse to the companies most of the value added tax, accumulated over the years. Unfortunately, this cabinet also showed huge ambition to abolish dozens and even hundreds of license regimes and make many business alleviations. At the end of the day, however, I can mention several alleviations only.”

Could you name sectors of the national economy which have registered highest growth?

“Some sectors have been showing good results recently. Firstly, this is the agriculture field and its relevant sectors. The tourism industry has also been developing well. I say industry, because tourism is linked with series of economic activities which feed the tourist services and boost the number of the foreign tourists visiting Bulgaria. The number of the local tourists is also on the rise. So, tourism is among the sectors which are to show good results in the future. We have also very good news from the IT sector, the telecommunications field and the outsourcing industry. In other words, if the authorities encourage permanently several stable sectors of the national economy, they will show good economic results in the years to come.”

The National Association for Small and Medium Enterprises sets its hopes on the good absorption of the funds granted under EU operational programmes. This process is currently slowed down, due to the political crisis and the inability of the state administration to function effectively.

How the latest increase of the energy prices will influence the business of the small and the medium enterprises and the end user price?

“The energy market is a very serious problem for us, because it is not fully liberalized and we are still caught in the trap of the administrative management of the electricity prices. The latest increase in the electricity prices announced recently would not be the last one for sure. So, the local business will be forced to calculate the increased expenditures in the prices of the items. We did not have the opportunity to make price increase over the recent years due to the limited consumption and the stagnation at the local market. This time, however, the business would not be able to carry the burden of higher energy prices on its own and I suppose the market will feel it in the beginning of the autumn.”

According to the President of the National Association for Small and Medium Enterprises, the companies are currently looking for all opportunities to boost their effectiveness and the efficiency of the labor force. “The association marks higher interest in our risk management courses which means that the owners of the small companies have started to realize the importance of these key competences in a turbulent business environment”, Mrs Negulova further adds.

Eleonora Negulova is optimistic about the development of the small and medium business in the future. In her words, the number of bankrupt companies has gone down in the past 12-18 months. This positive trend could trigger future economic growth and lower unemployment.

Source: bnr.bg