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DE RUEHSF #0312/01 1731254
ZNR UUUUU ZZH
R 221254Z JUN 09
FM AMEMBASSY SOFIA
TO RUEHC/SECSTATE WASHDC 6094
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 SOFIA 000312 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL EAID BU EU
SUBJECT: BULGARIA:  AID'S POST-GRADUATION PARTNERSHIP: 
USING IT SECTOR TO BOOST ECONOMY, DRIVE TRANSPARENCY 
 
¶1.  Summary:  When AID formally closed its mission to 
Bulgaria in 2008 after 17 years of operation and 650 million 
dollars of aid, many Bulgarians assumed that the assistance 
relationship had come to an end.  However, the continuing 
need for engagement to help address domestic priorities and 
to prepare for a future role as an EU donor country resulted 
in an AID pilot program focused on the establishment of 
public-private partnerships.  Under the stewardship of a 
Development Counselor, we have successfully launched this 
partnership program and have garnered both enthusiastic 
support and financial assistance from Bulgarian government 
authorities and the private sector. 
 
¶2.  We chose the IT sector as the initial target for the 
partnership program for several reasons:  Bulgaria has a 
history of IT development and several major American IT 
companies (including IBM, Microsoft, HP and Cisco) are 
currently operating here.  The IT sector offers relatively 
quick opportunities for economic growth via start-ups and 
incubators.  And over the long term, greater IT penetration 
offers the prospect of boosting transparency and combating 
corruption throughout government and the economy. 
 
¶3.  Government funds ($500,000 each from the USG and GOB) 
will be matched and exceeded by companies and private 
foundations.  Our hope is that proposals in the IT sector 
will be funded at the level of approximately $4-5 million in 
the first phase.  Public profile and corporate support for 
the partnership were boosted by the personal endorsement of 
Wikipedia co-founder Jimmy Wales, who attended our launch. 
 
¶4.  The challenge now is to solicit top caliber proposals and 
to match them with adequate funding.  Having used IT to prove 
that the partnership concept can succeed here, we will also 
turn to development of the next phase and identify other 
sectors that will attract private funding and produce 
concrete results.  End Summary. 
 
¶5.  After laying the groundwork through nation-wide 
consultations, we launched on June 5 the first of a series of 
public/private partnership activities under the direction of 
the USAID Development Counselor.  This pilot program, 
established in late 2008, picks up from the successful USAID 
program that ended last year.  The focus of the first 
partnership -- Information Technology and Innovation -- 
builds on the existing strengths and prior investments of the 
IT industry in Bulgaria and the reputed excellence in 
academic institutions.  That said, there is much room to grow 
and an economy that is in desperate need of competitive new 
jobs.  The focus of the Partnership is on building human 
capital, stimulating and nurturing new ideas/applications, 
and strengthening the policy environment for new businesses. 
 
¶6.  The June 5 event brought together the four arms of the IT 
sector:  government, represented by Minister of State 
Administration Nikolay Vassilev and Deputy Minister of 
Economy and Energy Nina Radeva; academia, represented by 15 
of the top-rated universities and technical institutes 
throughout the country; industry, represented by a wide range 
of Bulgarian and international IT companies; and NGOs who 
work with youth and policy.  Others included interested local 
foundations and international organizations. 
 
¶7.  The Partnership launch calls for proposals to be 
submitted over the summer; not "business as usual," but 
jointly funded by private sources with cost leveraging of at 
least two to one.  The U.S. and Bulgarian governments have 
each committed $500,000 this fiscal year and there is a 
commitment on the part of several private foundations to 
co-fund some proposals, details to be decided at a later 
date.  To kick off the process, six small grants were 
announced at the event funded through USAID by the Bulgaria 
Fund (German Marshall Fund), all directly addressing the IT 
sector. 
 
¶8.  Wikipedia co-founder Jimmy Wales was a special guest at 
the launch and served as the example to which Bulgarians can 
aspire in technology innovation.  In his remarks, he noted 
the importance of a transparent and supportive business 
climate to unleash the creativity that leads to ideas like 
Wikipedia, and praised the Partnership as one concrete step 
to achieve that. 
 
¶8.  The next step is to assure that solid proposals with 
adequate leveraging of funds are received and new sources of 
funding are identified to support the Partnership.  As the 
Bulgarian government slogs through the summer election 
campaign and the process of creating a workable coalition 
government, we will take advantage of this interregnum to 
help consolidate our contacts to create new partnership 
opportunities in a sector that offers promise.  This 
engagement with the IT sector in Bulgaria that includes the 
 
SOFIA 00000312  002 OF 002 
 
 
recent establishment of IBM's Nanotechnology Center, the 
Gates Foundation's $50 million program to network the 
country's libraries, and a $5 million grant from the American 
for Bulgaria Foundation (ABF) to digitize library holdings. 
 
McEldowney