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Bulgaria Economy. General presentation of the country history Socialist period After World War II, in consequence of the agreements between Stalin, Churchill.

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Presentation on theme: "Bulgaria Economy. General presentation of the country history Socialist period After World War II, in consequence of the agreements between Stalin, Churchill."— Presentation transcript:

1 Bulgaria Economy

2 General presentation of the country history Socialist period After World War II, in consequence of the agreements between Stalin, Churchill and Roosevelt, Bulgaria fell under the sphere of influence of the Soviet Union. The country became one of the main economic partners of the former Soviet Union and it is part of the socialist system. Bulgarian commodities were sold on markets stretching from the Baltic region to the Pacific.

3 Socialist period In several cases BCP authorities resorted to mass repressive actions: -in the collectivization of agriculture; -in the nationalization of industry and large urban real estate; -no private property, market economy and freedom of market relations

4 Transition period in Bulgaria Bulgaria experienced a decade-long delay in its transition to a market economy. The country experienced a severe economic and financial crisis. Poverty became a serious and widespread problem. Reforms and restructuring helped to Bulgaria to transform it into a market economy.

5 Recent economic performance Since 1997,in a period of Stagflation, the country has recorded sustained economic growth of more than five percent per year. The economy is reaching 79 % in 2005.

6 BULGARIA TODAY Bulgaria is a middle income country with a gross national income per capita of $3,450 in 2005 The agriculture, tourism, light industry, and metallurgy are key sectors of the economy. Per capita income increased by an average 6% year. Unemployment has been reduced substantially from 18.1% in 2000 to 11.3% in 2005

7 BULGARIA TODAY The country’s per capita income in 2005 at purchasing power parity was just 32 and 56 percent of the average level of EU25 and EU8 countries respectively. Improving the efficiency of the economy, full use of EU funds in the relevant reforms, and closing gaps, are the central challenges of convergence towards EU averages and sustained improvements in living standards.

8 1950-2010

9  1946: Rákosi Mátyás ordered to introduce the new currency, the FORINT (previously the currency was pengő). Rákosi Mátyás, prime minister of Hungary (1948-1953)

10  After the 2 nd WW, Communist and Stalinist rule came with a one-party system (MKP)  Rebuilding the country after the war  The enforced industrialization brought extreme poverty  23rd of October, 1956: Revolution of students and youngsters

11  After the Revolution and the Soviet occupation, Hungary joined the Warsaw Pact and the COMECON (Council for Mutual Economic Alliance)  Hungary were the ‘happiest barracks’ or ‘goulash-communism’ – we had the loosest rules (travelling, censorship – TTT, high standard of living, shopping)

12  Establishing the TSZ-system (TSZ – Termelőszövetkezet, in English Productive Private Enterprise) where people joined their forces to produce products (like a farm)  No unemployment – full work force employed even if with nothing to do  Competitions at work – among factories

13  Clear-cut, foreseeable future due to the financial safety (paid from loans borrowed from Western countries, which caused high state debts)  In the 80ties: the emerging youth making the future’s intellectuals with democratic movements  23rd of October, 1989: announcement of the Hungarian Republic  March-April 1990: Free and democratic elections after 43 years

14  Democratic elections are held every 4 years  Complete change of system – capitalist market economy introduced  Enormous gap between social layers: huge wealth for 1-2% of the population, poverty for the majority. There is very little middle class in between.  Introduction of consumer society: Buy as much as you want, you can pay your debts later!

15  Due to globalization Hungary lost a considerable amount of working industry (e.g. Collapse of the USSR, losing markets in CIS countries)  Joining to EU – selling sugar producing quotas, selling out the country, streaming of products from Eastern European countries (e.g. milk)

16 Change in the past 50 years..

17  Since the 1950’s Scotland’s main industry has changed.  Scotland used to have huge exports in ship manufacture, metals, and heavy industry in general.  This changed rapidly in the 1970’s and 1980’s..  Now Scotland mainly relies on tourism to make money.  Tourism is very important in Scotland.

18 Heavy industry in Scotland (1950’s and 1960’s) Tourism in Scotland. (1970’s onwards)

19  The average weekly wage in the 1940’s was £ 4.00. Now it is about £ 400.  In 1948 the British currency was made up of pounds, shillings, and pence. Now it is just made up of pounds and pence.

20  The Education Act in 1944 gave every child free education to the age of 15.  The Scottish Education system is distinctly different from the other countries of the United Kingdom.  Much more students are staying in school until the last year and getting a higher education than they used to.  Students used to leave school at a young age and get a job, many now choose to get a higher education.

21  At their 11th birthday, over half of the children born in 1958 were living in rented accommodation. 42% were in council houses.  Much more people tend to buy houses now.  The population has not changed much, but families are smaller than they used to be.


23  Marshall plan was adopted in Germany  There was only one rule in West-Germany after World War II: economy was to respect the competitive environment  Germany has a social market economy: not only help the wealthy also care for the workers and others who might not prove able to cope with the strength of economy


25 1990 German reunification => Germany invested over 2 trillion DM in the reconstruction and development of Eastern Germany 2011 the results were mixed with a slow economic development in the eastern parts in sharp contrast to the rapid economic growth in the western and southern parts of Germany.



28  Marshall plan  Experienced a rapid expansion of the chemical and petroleum industries.  The 1973 and 1979 oil crises sent the economy into a recession; it was particularly prolonged in Wallonia, where the steel industry had become less competitive and experienced serious decline.  In the 1980s and 1990s, the economic centre of the country continued to shift northwards and is now concentrated in the populous Flemish Diamond area.

29  Imports: raw materials, machinery and equipment, chemicals, raw diamonds, pharmaceuticals, foodstuffs, transportation equipment, oil products.  Exports: machinery and equipment, chemicals, finished diamonds, metals and metal products, foodstuffs (e.g. chocolate).

30  Brussels is the capital of Europe  Belgian politician Herman Van Rompuy first president of the European Union.  The EU's headquarters in Brussels

31  The Belgian economy shows a dual nature: a dynamic Flemish economy and a Walloon economy that lags behind.  Belgium strongly supports an open economy.  Population: Flanders 2x Wallonia

32  Since 2002  Before: Belgian francs   stronger economy and stronger Europe

33  Some of the countries (Belgium, Germany and Scotland) have developed good market economy and industry traditions. The other 2 countries (Bulgaria and Hungary) are from the former Socialist group and they have been in a period of changing to market economy over the past 20 years. In conclusion comparing the countries we have a lot of common developed industries like agriculture, textile, tourism and food industry.

34  Scotland : - Hamish Brown Belgium : - Aaron Verbrugghe  - Ella Wallays Germany : - Tobias Fuesslin - Alexander Schmucker Hungary : - Benjamin Soti Bulgaria : - Martin Garkov - Mihaela Ivanova - Stanimira Petkova - Stiliana Koleva - Ralica Hadjieva

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