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Bulgaria in the trap of neoliberalism

In 1989 the Berlin Wall fell and the so-called “transition period” for Central and Eastern Europe began. The goal pursued was a radical change of society at economic, political and social level. In relation to this, Bulgaria endorsed a variety of development programs, which were manipulated by the two supranational institutions – the World Bank and the International Monetary Fund. The country was quickly encompassed by a wide network of non-governmental organizations (NGOs) whose number amounts nowadays to 38,000. The UN agencies, supranational authorities and NGOs organized and coordinated Bulgaria’s transition through the same methods, ideas and language, which were being used for the Third World Countries by that time.

by Daniela Penkova

PART 2 - The situation in Bulgaria in 1989

When on the 10th of November 1989 the evening news announced Todor Zhivkov’s resignation from the country’s leadership, the Bulgarian people were sincerely surprised. Although the Berlin Wall had fallen the day before, the Wind of Change had not yet been felt in Bulgaria. But the news evoked great hopes within people – perhaps the moment for democracy had finally come. Soon the Union of the newborn Democratic Parties was proclaimed and the date for the first free elections was set.

Hopes concerned mostly the political freedom. Until that day it was practically impossible to express any right-wing ideas in Bulgaria since capitalism was branded as an unjust and exploiting system. The ownership of the means of production in industry was entirely in the hands of the state. Only the agricultural cooperatives and the craftsmen were independent but their sole client was again the state. Those who would insist on private ownership of the means of production were persecuted. Only a handful of people dared to openly claim such thing. The only exception were the dissidents, collaborating with forbidden in Bulgaria Western media. One such media was radio “Free Europe” financed since 1950 by the US Congress through CIA with the official purpose of “popularizing the democratic institutions and values by propagation of information and ideas.” One of the most exploited arguments of the radio supporting the capitalistic way of production was the so-called “poverty” in the Socialist countries which were being compared to the Western countries and foremost to the US. That is why it is necessary to take a look at the available data in order to better understand the economic condition of Bulgaria on the eve of the transition.

Most appropriate for the purpose are the World Bank’s and FAO’s statistics for 1989: Population of 8.878 million people with GDP (Gross Domestic Product) of 2449 dollars per capita. A positive trade balance of +877.1 million dollars. The hospital beds were 970.2 per each 100,000 citizens, which surpassed substantially the average of the European Union with 15 member countries which was 777.4 per each 100,000 citizens.

Manufacture was industrialized and over 80% (per cent) of the production came from industry. Only 10% of the whole production came from the so-called traditional economy – agriculture. While according to the West the main reason for poverty in the Third World countries was the lack of industrialization, the same was not true for Bulgaria. However it did not stop the supranational institutions from demanding from the country the same reforms which they had been imposing on the developing countries for decades.

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