Messenger - Vol. 1, No. 3, Page 11
Spring 1992
Business down but not out in Bulgaria

     In the Black Sea port of Varna, shipyards are trying to find new
customers whose vessels need repair and who can afford to pay. Their
last big customer-Russia- can no longer do so, and the Bulgarians want
to avoid becoming destitute themselves.
     Last June, the U.S. Agency for International Development (AID)
awarded the University a $1.5 million grant to assist Bulgaria's
transition to a free market economy. After a series of planning
meetings in Newark, University professors embarked on a one-year
program to teach the country's leaders, teachers and business people
the basic elements of supply and demand and business management.
     Faculty members began traveling to Bulgaria last July. In the
first six months, they taught more than 600 managers, government
officials and students at universities in Sophia and Varna.
     Kenneth Koford, an associate professor of economics, has spent
four months in Bulgaria since the program began.
     Acting as consultants to business people and government leaders,
he says the University's representatives have found Bulgarians slow to
understand the concept of teamwork in the production of goods or
service. Many of Bulgaria's enterprises are family-run, he says, and
people don't seem to trust strangers enough to work with them.
     "The economy is in a big recession," Koford says. "Conditions are
real bad, but government policy is not bad." Last year, he says,
runaway inflation hit its highest peak-at 200 percent per month. The
astounding jump in prices followed the removal of price controls,
which the Communist Party had used for years.
     More recently, the growth in prices has slowed to about 4 percent
per month. Inflation has been checked by the Bulgarian government's
choice not to print new currency simply to make cash available, Koford
     Still, the country is in trouble. The Bulgarian economy relied
heavily on ship repair work, factory orders and tourism, Koford says.
With most of central and eastern Europe in turmoil, very little
business has come Bulgaria's way. Despite the difficulties, he says,
"Bulgarians are committed to a market economy."
                                        -Stephen Steenkamer,
                                             Delaware '92