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Bulgaria Table of Contents


Postwar Trade Policy

The adoption of the Soviet economic model had direct and indirect impact on Bulgarian international trade after World War II. Among direct results was the decision to reduce dependency on prewar Western trade partners. This meant strong promotion of import substitution policies to bolster domestic production of goods previously imported. In 1960 Bulgaria's total foreign trade (exports plus imports) was 31 percent of NMP, quite low for a country with a small internal market and few natural resources. By the 1980s, however, this figure had risen to over 90 percent. Before World War II, Germany was well-established as Bulgaria's top trading partner. Postwar economic policy diverted trade from Central Europe to Eastern Europe, and primarily to the Soviet Union. The new domestic economic priorities dictated a revised foreign trade structure (see table 16,; table 17, Appendix). The policy of promoting heavy industry, for example, required huge imports of machinery and raw materials (see table 18; table 19, Appendix). Beginning in the mid-1950s, imports of machinery accounted for approximately half the value of total imports, while fuels, metals, and minerals made up more than a quarter of this value. Lower postwar investment in agriculture eventually lessened the share of foodstuffs in total exports.

The state monopoly of foreign trade also changed the way decisions were reached on international allocation of goods. Trade decisions were reached administratively by planning authorities or negotiated with other members of Comecon. Overall control of foreign trade was shared among the Ministry of Foreign Trade, the Ministry of Finance, and the Bulgarian Foreign Trade Bank.

Import and export operations were conducted by foreign trade enterprises, most of which were affiliated with one or more associations but retained a legal identity outside the associations. Although reform measures by the Zhivkov regime gave associations some profit incentives in international trade, the producing enterprises themselves were completely isolated from the foreign customer. This meant that world quality standards had no influence on Bulgarian producers.

Data as of June 1992