Transition of the Bulgarian Economy: 1990-1997 :: Essays Papers

Transition of the Bulgarian Economy 1990-1997The immense political and stinting changes in Central and Eastern Europe yield created a anatomy of unique transition economies. Each country controlling its own schooling without fully understanding the implications of the monetary and fiscal macro sparing policies it yields. Bulgaria in bad-tempered has had mixed results. A 1992 OECD Economic Assessment of Bulgaria described shock therapeitic advance programs that included the abolition of central planning, the liberalization of most prices, and opening more than markets to foreign trade. While the survey concluded that more than has been achieved in highly difficult circumstances, by 1997, economical stability had not been realized. Since 1989, several brasss have presided, the banking system has virtually collapsed, GDP has significantly declined along with the lev, inflation is rampant, and economic policies fail to generate confidence. However, Bulgarias economic performance is decidedly lay of the road when comp atomic number 18d to former(a) transitioning economies. Declines in output and average real income are much greater and unemployment and inflation much higher than the Visegrad group and Baltic Republics though often better than Ukraine, Belarus, and the Russian Republics. Many of Bulgarias menstruum economic problems can be traced to economic conditions at the start of its transition. great(p) reliance on CMEA markets devastated the country , more so than any other country. Compared to GDP, over 60% of its imports and exports were orientated to the CMEA market. COMECONs collapsed devastated Bulgaria, causing large initial declines in GDP and increases in unemployment. This event necessitated the complete restructuring of the modes of production. The complete excitation of the Bulgarian economy forced a suspension of payments to foreign debts make it practically impossible to attract foreign/western investment to restructure the economy . Current economic instability is due to the lack of decisive economic policy from the seven successive governments following the fall of Todor Zhivkiv the former communistic Party leader in 1989. While each succeeding government has remained committed to economic transition, their policies have lacked cohesion over important controversies much(prenominal) as privatization, subsidies, co-operation with IFIs, and foreign investment. The result of the different policies have resulted in much change but little progress with measures dealing with soft work out enterprises and banks, privitisation of state assets, and attraction of foreign investment. Ripples from the discontinuity of Bulgarian economic policy are evident in the rapidly accumulating domestic debt, payment arrears, and the continual refinancing of inefficiently run commercial banks.