It has been a quarter of century from the end of the old communist regime in Bulgaria and the beginning of the economic and political transition. This book and the accompanying video, focusing on the involvement of the American team (under the auspices of The National Chamber Foundation), is intended to serve as a record of the early transition period, beginning in early 1990. The late noted chemist and entrepreneur, Dr. Robert Krieble, provided the initial funds for the original transition project, and two of the Krieble family foundations provided generous financial support for the production of this book and video.
These documents come from the records and recollections of many of those involved – both Bulgarians and Americans. There has been much frustration, particularly in Bulgaria, that many of the recommendations were ignored, watered downed, delayed, and at times sabotaged by those in Bulgaria who had agendas other than promoting economic growth and freedom for the Bulgarian people.
Despite the many disappointments and setbacks, Bulgaria is now a far better place than it was in the late 1980s. The people are essentially free and living under a parliamentary democracy. Real per-capita incomes (according to the IMF on a purchasing power parity basis) are about three times higher than they were at the low point at the beginning of the transition, and about double where they were twenty years ago. Bulgaria has one of the lowest debt-to-GDP ratios in the European Union, and the country is in a far better position to face global economic forces than most other EU countries. The currency board, which we first recommended in 1990, was put in place in 1997, giving the country price stability. The ten percent flat tax on both individual and corporate income has made Bulgaria one of the most tax-competitive countries in the world.
Several of the Americans who were involved in the transition project continued for many years to work with key figures in Bulgaria, in order to assist in the on-going transition. Perhaps more important than the actual recommendations that were made by the Americans in the early 1990s was the on-going dialogue with the various American participants, both in the Bulgarian media and in private meetings, as to what policies and institutions were necessary for a successful, prosperous, democratic, civil society.
One of the tangible and important side benefits of the transition project was the creation of the Institute for Market Economics (IME), which has served as a highly productive and influential “think tank.” IME continues to promote free markets, free people, and a civil society.
Richard W. Rahn
Co-Chairman of the Bulgarian Economic Growth and Transition Project (1990-1993)