East from the West and West from the East

Findings from a business trip to Eastern Europe in September 2019

At the end of September 2019 I visited Romania and Bulgaria with Swiss entrepreneurs and business leaders from the Swiss Economic Forum community.

A comparison of the two countries reveals some key similarities: despite major challenges in areas such as infrastructure, corruption and emigration, both countries have a high level of identification with Europe, stable bugdets, growing entrepreneurial forces, a highly potent IT sector and a civil society with the will to cut off old customs.

Very rarely during our talks, climate protection or circular economy were an issue, unfortunately. Other topics were further up the list of our partners on spot. These are my core findings on opportunities and challenges:

1. Proudly European: Both Romanians and Bulgarians see themselves as Europeans. And in spite of all the weaknesses and mistakes, the EU has a great radiance for these countries and brings about many very positive developments in the institutions, in the ecosystem of the economy and in the legal system.

2. Diaspora as an opportunity: The massive emigration, which poses major problems for these countries of Eastern Europe, can also prove to be beneficial. Citizens abroad maintain close contact with their home country and are interested in what is happening there. At the same time they bring in experiences and customs from more stable democracies like Switzerland. therefore they have the capital of knowledge and the money to invest in new political movements or start-ups. They are movers and shakers in social change and contribute to the growth of entrepreneurial ecosystems.

3. The Swiss contribution counts: After Romania and Bulgaria joined the EU in 2007, the Federal Council gave the go-ahead for a contribution of some CHF 250 million over ten years in favor of the two countries. The Framework Agreement was signed in 2010 and the cooperation program with projects to reduce economic and social disparities was launched in 2011. We were able to see the effectiveness of the Domino program, particularly during a visit to the LEM company in Sofia.

4. Their future is female: While in the early years of Switzerland in the 19th century it was always men who launched the flagships of today's economy, today in Romania and Bulgaria it is definitely the women who make the difference. In addition, local women are more likely than women from other EU countries or Switzerland to graduate with degrees in engineering and manufacturing.

They lead other countries in terms of participating in the traditionally male-dominated fields of science, math, and computing (special congratulations to Simona Motogna, UBB). There is no doubt this has been a key factor in the countries strong economic growth performance.

In summary, there has been great progress since the opening of the countries in 1989 and there are valuable opportunities for investment and cooperation. Their challenge now seems to be a) develop the regions and infrastructure, b) gear institutions to the needs of the economy and, last but not least, c) make clever and sustainable investments in education. As a result, emigration will stop and returnees will grow.

Not to forget: Switzerland was also a country of emigration in the middle of the 19th century. Keep going. We will be back. Thanks to all those who have supported us.