In
1989 the Berlin Wall fell and the so-called “transition period”
for Central and Eastern Europe began. The goal pursued was a radical
change of society at economic, political and social level. In
relation to this, Bulgaria endorsed a variety of development
programs, which were manipulated by the two supranational
institutions – the World Bank and the International Monetary Fund.
The country was quickly encompassed by a wide network of
non-governmental organizations (NGOs) whose number amounts nowadays
to 38,000. The UN agencies, supranational authorities and NGOs
organized and coordinated Bulgaria’s transition through the same
methods, ideas and language, which were being used for the Third
World Countries by that time.
by
Daniela Penkova
PART
3 - Structural Adjustment Programs (PAS)
The four key reforms required by the neoliberal doctrine
and encouraged by the World Bank, the IMF, the UNDP and the think
tanks were privatization, liberalization, deregulation (regulations
removal) and dramatic cut-offs of the government spending. These
reforms were already imposed on the developing countries in the 1980s
through the so-called Structural Adjustment Programs. These are a
series of macroeconomic measures proclaimed as necessary so that
these countries could gain the trust of the private investors. The
main goal of the structural adjustment programs was to make all the
world’s economies capitalistic ones, thus placing them into a
common system controlled by the international capital.
During the 1950s, 1960s and 1970s it was widely assumed
that the economies of the poor countries were structurally different
from those of the advanced industrial ones because they had been
victims too long of the colonization from the Western imperialistic
states. In order to get rid of poverty the economically
underdeveloped countries needed to get modernized through a
transition from the traditional agriculture based economy to
industrialization – the so-called Modernization Theory. At that
time it was commonly assumed that in order to achieve such a result
it was imperative to follow policies of Keynesian type which were
applied in all Western countries during that period. “The
Development Economics” was considered a “special” instance of
Keynesian economics where the main role for the social and economic
modernization had been entrusted to the state.
During the 1980s with the ascent of the neoliberal
theory also changed the ideas concerning the methods for
accomplishing economic development. The approach still remained
Euro-centered but this time it was about following the decrees of the
neoliberal economic theory which was already making its way into the
Western countries.
The international institutions were lending loans to the
developing countries through the Structural Adjustment Programs under
strict conditions. In case the country did not abide to the
conditions it had signed up for, the financing was cut off. The World
Bank in 2005 and the IMF in 2002 proclaimed the beginning of a
process of revising the method of loan lending. In spite of this, to
this day every signed agreement still goes with up to 67 economic
requirements to the indebted countries concerning privatization and
liberalization of sensitive sectors such as the key spheres of
education, health services and aquatic resources management.
Bulgaria applied for its first loan from the World Bank
in 1990 starting off from a totally different economic position
compared to the developing countries – it was broadly
industrialized with developed infrastructures along its whole
territory. In addition to that the country had built stable health,
pension and educational systems functioning excellently and had a
positive trade balance of almost 900 million dollars.
In spite of the big differences from the Third World
countries, the loan lenders imposed on the country the same
conditions that were imposed on the poorest of the countries:
Bulgaria had to quickly start the process of privatization of most of
its economic sectors including the banking sector. In addition to
that the country had to liberalize all the prices and liberalize and
deregulate its markets. The officially stated goal was to increase
the Gross National Product – the index adopted as the measure for
economic development.
In 1991 Bulgaria signed with the World Bank its first
loan requiring structural reforms. Since then were signed 17
agreements with the World Bank and 13 agreements with the
International Monetary Fund - all of them with conditions for
reforms. Both institutions did not ask themselves the question how to
keep the positive results achieved in the country’s economy and
social sphere until 1989. If anyone still thinks that today’s
economic condition is caused by the short-sighted Bulgarian
politicians led by wrong policies, it would be better to get rid of
this conviction. All reforms carried out during the last 25 years
were worked out, imposed and approved by the two mightiest global
institutions.
Source
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