Bulgaria Table of Contents
Although both the BSP and the UDF agreed on the need for market-oriented reforms, disagreements on methods and timing continued in 1991. The BSP advocated slow transformation, to minimize economic dislocations and hardship (and also to preserve privileged positions for party members whenever possible). The UDF believed that a market economy could not be installed piecemeal, but could only be effective as a form of "shock therapy." The UDF saw free market features such as market prices and privatization as incompatible with socialist institutions such as large state-owned enterprises. The huge operating losses of such enterprises were largely responsible for a severe 1990 decline in NMP. The model advocated by the UDF was the renaissance of the Polish economy through private enterprise. This model justified severe, short-term social costs because only by inflicting them could the economy be disentangled from the moribund apparatus that remained from the central planning era.
Progress was made on some fronts even before formation of the first coalition government in early 1991. In September 1990, Bulgaria's admission to the IMF promised access to hard currency loans and help in restructuring the economy. New agricultural banks began providing credit to private farmers tilling the land provided in the 1991 Arable Land Law; the first private bank was opened; and Bulgaria applied for membership to the General Agreements on Tariffs and Trade (GATT--see Glossary) and the World Bank (see Glossary) (see Agriculture , this ch.).
Data as of June 1992