Privatization and Oligarchy in Post-Communist Bulgaria
MIROSLAV K. POPOV AND ELKA N. TODOROVA
Since 1989, Bulgaria has undergone radical changes. New laws and the new democratic Constitution have been enacted, and there has been progress in building democratic institutions and in promoting basic human rights. The economic situation, though, has significantly deteriorated. In 1995, the country's gross domestic product (GDP) was a quarter lower than in 1990, industrial output had fallen by almost 50 percent, and there were massive poverty and unemployment. Furthermore, Bulgaria has to service an enormous foreign debt.
The privatization process in Bulgaria is a twofold process involving the denationalization of state-owned and municipal enterprises. The Law for the Transformation and Privatization of State-owned and Municipal Enterprises (TPSME) was enacted on April 23, 1992, and the first big transfer took place in May 1993.
The most common ways of privatizing are either the quick transfer of state companies into private enterprises, whose owners then reorganize them, or the transfer of companies after their reorganization. Generally, most of the Eastern European countries, including Bulgaria, have chosen the first way. However, the speed of transformation in all these countries has been slower than expected. For example, as of 1995, only 40 percent of the state enterprises in Hungary were sold, with the chemical, pharmaceutical, and power industries left untouched, and only 2,500 of the 8,400 state-owned enterprises in Poland were sold ( United Nations [UN], 1995).
Since the national economy was liberalized in 1990, following the advice of the International Monetary Fund (IMF) and other international economic insti-