Academic journal article East European Quarterly

De-Development Problems in Bulgaria

Academic journal article East European Quarterly

De-Development Problems in Bulgaria

Article excerpt

Introduction

As a recent World Bank report notes, more people live in poverty in Eastern Europe and Central Asia now than a decade ago. (1) This dramatic rise in poverty has already been recognized in the mainstream literature on post-Communist transitions. The level of socioeconomic development, industrialization and modernity achieved during the Communist era in the "Second World" economies of the Soviet Union and Eastern Europe may have facilitated the move to democracy, (2) but many gains of the postwar developmental process have been eroded by the subsequent near collapse of a number of these economies and their sinking (with a few possible exceptions such as the Czech Republic, Poland, Hungary, and perhaps Slovenia) into the ranks of the Third World. (3) In post-Communist Bulgaria in particular deindustrialization, unemployment, poverty, growing income disparity, mass emigration, crime and corruption have reached alarming and destabilizing proportions. (4)

On the basis of the empirical evidence presented in this article, it is evident that--like other post-Communist nations--Bulgarians have fared rather poorly in the transition to market-based capitalism. By nearly every macroeconomic standard, Bulgaria is in a worse shape now than in the Communist past. Macroeconomic statistics show that the per capita GNP is sharply down, the social safety net has all but disappeared, and even the physical survival of many impoverished Bulgarians is in serious peril. The basic change from a centrally-planned economy to a capitalist economy with the establishment of self-regulating legal mechanisms has proved far more difficult than was anticipated in the wake of widespread optimism at the beginning of the transition. Bulgarians have suffered many hardships and deprivations ever since the Bulgarian economy embarked upon the road to economic reform. The short-term effects of market-oriented reforms have been economic stagnation, unemployment, inflation, increasing inequality of incomes, widespread impoverishment, and even malnutrition. Organized crime and endemic corruption in the form of bribery, influence peddling, smuggling and protection rackets have exacted a heavy toll on the economy. Another unfortunate side effect of the transition is the widespread neglect of the economic and social rights of the population, which has lessened the value of the newly acquired political and civil liberties. In the global center-periphery structure, Bulgaria is increasingly marginalized out of the international division of labor. All these developments are unmistakable symptoms of socioeconomic de-development, including the weakening of state capacity to perform even the most basic functions and responsibilities, such as maintaining public law and order.

De-development is understood here as the inability of post-Communist countries to maintain their pre-transition levels of industrialization, socioeconomic growth and effective governance. (5) Like other "Second World" nations, Bulgarians, who at the start of the transition hoped to join soon the "First World" West (the advanced, prosperous "core" of the world capitalist economy), now find themselves consigned to the poor "Third World" periphery instead. Beyond any doubt, Bulgaria is being largely "third worldized": the East has become the South. Together with other economically depressed parts of the former Soviet bloc, it is becoming in many respects a new Third World. While a few commentators had predicted this development, (6) hardly was such a dire outcome anticipated universally at the start of the transition period. The contribution of this article is that it sheds some additional light from a developmentalist perspective on the mainstream argument about the slow, painful, though ultimately "successful" transformation path of these post-Communist societies.

The Socioeconomic Crisis

To understand the ongoing process of de-development, it is necessary to examine in some depth Bulgaria's post-Communist socioeconomic conditions, employing as empirical indicators levels of real GNP growth, per-capita income, industrial output, unemployment, inflation, poverty level, and other commonly tested economic indices. …

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