Bulgaria Essay

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Bulgaria is a country in southeastern Europe that lies south of Romania, north of Greece and Turkey, and has a coastline along the western edge of the Black Sea. Since its reestablishment as an independent country in 1878 after the rule of the Ottoman Empire (from 1422), Bulgaria has faced an economic dilemma: How to raise the standard of living despite a backward rural economy and a meager industrial and savings basis? How to build a balanced society beyond agrarian majorities in favor of entrepreneurial middle classes and bourgeoisies? At first, it relied on export of agricultural commodities to north central Europe. It called for foreign direct investments to fuel the lean state budget and to finance the basic networks of railroads. Its banking structure took a long time to become efficient, under the aegis of the central bank and inflows of German, Austrian, and French money.

Some signs of take-off occurred at the turn of the 20th century, but Bulgaria failed to enlarge significantly its territory through the Balkan Wars (1912–13) and remained a small country, all the more because it had to submit to reparation payments after having joined Germany and Austria-Hungary in World War I. A predominant agrarian economy and unequal ownership of farms put brakes on growth and diversification, which stopped during the 1930s and 1940s.

After World War II Bulgaria joined the Soviet-controlled economic area Council for Mutual Economic Assistance (COMECON). It benefited from some European globalization thanks to the injection of money by the Soviet Union: The massive land reform transformed agriculture into an efficient sovkhoztype collectivist sector, exporting wheat and maize to the Soviet Union. The centrally planned industry was specialized into a few segments—with exports of electricity produced by nuclear plants and also of ground resources (lead, zinc), followed by agricultural machinery, truck motors, buses and trucks, and machine tools, thus benefiting from a high level of investment against gross domestic product (GDP) and from the introduction of skills in mechanics and upstream in steel and pig iron. The Black Sea coast welcomed tourists from the entire Communist area. Bulgaria had no genuine margin to maneuver but its standards progressed, thank to this artificial dependency on Soviet money, engineering, customer ship (75 percent of exports), and energy supplies.

Such rigid dependency was revealed after the fall of the Berlin Wall in 1989, because all of a sudden the Bulgarian economy was swallowed by a crisis of low productivity, while a desperate lack of inner capital and savings became apparent. To counter this chaos, Bulgaria had to rebuild a state economic administration, fight against bribery, and try to stimulate private investment and entrepreneurship for peasants, retail trading, small and medium-sized enterprises in light industry, services, and the hotel and tourism business. The European Bank for Economic Development and the European Union provided financial help. But Bulgaria had to consider whether to open its economy to foreign investors and thus lose economic autonomy or to keep some nationalistic strongholds.

The first strategy took shape in the name of liberalism and moreover of employment. This led to large investments from foreign banks, utilities, and service firms (German ones using Bulgarians as truck drivers throughout Europe). Other investments were made in real estate and tourism and in the food industry. Foreign direct investment was led by Austria (21 percent) in 1996–2007, the Netherlands (16 percent), Greece (9 percent), and Great Britain (9 percent). Such “positive” globalization did not create enough employment, and Bulgarians commenced emigrating to western Europe, mainly to work in construction, sending their earnings to their home country. Bulgaria still needs to determine its “specialization” within the new European economic order and within the European Union, which it joined in January 2007. It has missed out, for example, on the car manufacturing plants welcomed by some other countries.


  1. Andy Anderson and Stephane Lambert Buying a Property: Bulgaria (Cadogan, 2007);
  2. CIA, “Bulgaria,” World Factbook, www.cia.gov (cited March 2009);
  3. Emil Giatzidis, An Introduction to Post-Communist Bulgaria: Political, Economic, and Social Transformations (Manchester University Press, 2002);
  4. Petia Koleva, Système productif et système financier en Bulgarie: 1990–2003 [Bulgaria’s production and financial systems: 1990–2003] (Harmattan, 2004);
  5. John Lampe, The Bulgarian Economy in the Twentieth Century (Crown Helm, 1986);
  6. John Lampe and Marvin Jackson, Balkan Economic History, 1550–1950: From Imperial Borderlands to Developing Nations (Indiana University Press, 1982).

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