People's Republic of Bulgaria - Economy

Economy

The economy of the PRB was a centrally planned economy, similar to those in other COMECON states. In the mid-1940s, when the collectivisation process began, Bulgaria was a primarily agrarian state, with some 80% of its population located in rural areas. Production facilities of all sectors were nationalised, although it was not until Vulko Chervenkov that private economic activity was completely scrapped.

Despite negative effects in some other countries, the productivity of Bulgarian agriculture increased rapidly after collectivisation. Large-scale mechanisation resulted in an immense growth in labour productivity. A vast amount of government subsidies were spent each year to cover the losses from the artificially lowered consumer prices.

Chervenkov's Stalinist policy led to a massive industrialisation and development of the energy sector, which is one of Bulgaria's most advanced economic sectors to date. His rule lasted from 1950 to 1956, and saw the construction of dozens of dams and hydroelectric powerplants, chemical works, Elatsite gold and copper mine, and many others. The war-time coupon system was abolished, healthcare and education were made free. All this was achieved with strict government control and organization, prisoner brigades from the labor camps and the Bulgarian Brigadier Movement - a youth labor movement where young people worked "voluntarily" on construction projects.

In the 1960s, Todor Zhivkov introduced a number of reforms which had a positive effect on the country's economy. He preserved the planned economy, but also put emphasis on light industry, agriculture, tourism, as well as on Information Technology in the 1970s and the 1980s. Surplus agricultural production could be sold freely, prices were lowered even more, and new equipment for light industrial production was imported. Bulgaria also became the first Communist country to purchase a license from Coca-Cola in 1965, the product had the trademark logo in Cyrillic.

Despite being very stable, the economy shared the same drawbacks of other countries from Eastern Europe - it traded almost entirely with the Soviet Union (more than 60%) and planners did not take into account whether there were markets for some of the goods produced. This resulted in surpluses of certain products, while other commodities were in deficit.

Apart from the Soviet Union, other main trade partners were East Germany and Czechoslovakia, but non-European countries such as Mongolia and various African countries were also large-scale importers of Bulgarian goods. The country also enjoyed good trade relations with various non-Communist developed countries, most notably West Germany and Italy. In order to combat the low quality of many goods, a comprehensive State standard system was introduced in 1970, which included precise and strict quality requirements for all sorts of products, machines and buildings.

The People's Republic of Bulgaria had an average GDP per capita for an Eastern Bloc country. A comparative table is given below. At least on paper, average purchasing power was one of the lowest in the Eastern Bloc, mostly due to the larger availability of commodities than in other socialist countries. Workers employed abroad often received higher payments, thus could afford a wider range of goods to purchase. According to official figures, in 1988 100 out of 100 households had a television set, 95 out of 100 had a radio, 96 out of 100 had a refrigerator, and 40 out of 100 had an automobile.

Per Capita GDP (1990 $)	1950	1973	1989	1990
United States	$9,561	$16,689	n/a	$23,214
Finland	$4,253	$11,085	$16,676	$16,868
Austria	$3,706	$11,235	$16,305	$16,881
Italy	$3,502	$10,643	$15,650	$16,320
Czechoslovakia	$3,501	$7,041	$8,729	$8,895 (Czech) $7,762 (Slovak)
Soviet Union	$2,834	$6,058	n/a	$6,871
Hungary	$2,480	$5,596	$6,787	$6,471
Poland	$2,447	$5,334	n/a	$5,115
Spain	$2,397	$8,739	$11,752	$12,210
Portugal	$2,069	$7,343	$10,355	$10,852
Greece	$1,915	$7,655	$10,262	$9,904
Bulgaria	$1,651	$5,284	$6,217	$5,552
Yugoslavia	$1,585	$4,350	$5,917	$5,695
Romania	$1,182	$3,477	$3,890	$3,525
Albania	$1,101	$2,252	n/a	$2,482