chapter  3
24 Pages

The Economic Transition

The modern history of Bulgaria has been dominated by the problem of economic modernisation. The five centuries of economic, political and cultural isolation from Europe under the Ottoman empire created a backwardness that at times seemed overwhelming. In the course of its independent existence, Bulgaria has tried three grand schemes which it hoped would enable it to leap over the developmental gap: state-led capitalist development, albeit in the context of laissez faire, in 1878-1944, communist modernisation in 1944-1989, based on an allpowerful state maintaining a high level of investment in key industries, and the current model of liberal Anglo-American capitalism. None of these attempts have proved fully successful. The first created some modern infrastructure, but did not manage to achieve a qualitative transformation of the economy, most of which continued to function on a pre-capitalist basis. The second did succeed in transforming the structure of the economy, but its operating methods limited its efficiency and made a transition from extensive to intensive development virtually impossible. The third is still ongoing, and so far the devastation it has wrought has exceeded the benefits. In the long run, however, it does hold out the promise of finally giving Bulgaria a chance to become a truly modernised economy thorough integration into the European market and its institutions.