Monday, July 14, 2008

Carol Mohrlock--Monday, July 14




WOW!

Where do I begin! Dr. Didar Erdine was our presenter today at AUBG. Talk about a dynamic speaker and a teacher! This woman is one knowledgeable economist who knows how to convey the very important information about economics and economics in Bulgaria. I personally loved every minute of the economics lecture.

Here are some statements which I share by way of the heading:

ECONOMICS of BULGARIA
Eastern communist regime considered Bulgaria as a satellite of the USSR.
Communism “fixed” prices, products and “everything” during this regime.
Owning of private property was very little during communism. Land was owned by state.
Nothing under communism was determined by supply and demand.
Over the time period of 1945 – 1989 Bulgaria had a dictatorial government.
Many problems existed related to economic inefficiency b/c compensation was limited.
In the communist regime there was no unemployment & no differentiation of wages.
Collapsing of communism brought about market reforms within Bulgaria.
Some BG politicians were involved with corruption when market reforms began.


Over night some people became millionaires by selling off items of the Bulgarian state.
For such people the term Nomen Klatura is used.


Banks were also involved in the mismanagement of funds. Corruption sprung up.
Unrest stirred among the public who were becoming increasingly aware of corruption.
Losses were handled by BG printing more lev to finance the losses.
Growing tensions were seen when BG tried to get into the export market (western EU).
Asking BG to control $ supply by being pegged to the euro has helped the economy.
Revenues (taxes) & expenditures (supporting state enterprises) are the two sides of gov.
I M F has been a most important system since 1997 for the BG macroeconomic structure.
A country, like BG must rely on foreign investments to open its economy and improve.


While the economic future of Bulgaria is uncertain, the country has leveled the playing field. It has made it possible for all people to come and purchase enterprises. This small country, located at the crossroads of the east and west realizes it needs capital from the foreign market.


Since 1998 Bulgaria has received funds as a perspective member of the EU. In order to become a member Bulgaria must use the EU money to improve its infrastructures. Currently the EU funds (which are a grant) are frozen due do some corruption. The EU is closely monitoring the funds.


Currently one of Bulgaria’s biggest problems is that of inflation. For the past few years inflation has been at 15 %. In order to use the euro, an EU member country can not have over 4-5% inflation. Given the global trends it will take several years for this nation to work through the current challenge of inflation.


Dr. Erdine projects that 2012 will be the year that Bulgaria begins using the euro. Only time will tell if this will happen. In the mean time, it looks as if the Rose of the Balkans is on the right economic road for progress.


While our morning was filled with a stimulating class on economics, our afternoon was filled with learning how to weave. Fulbright-Hayes participant Anne Dale Blair showed us all how to weave a Bulgarian flag. The art session was great fun as we followed her instructions and chatted about our fabulous Fulbright experience in Bulgaria.


Carol Mohrlock
July 14, 2008

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