ORGANIZATION
State ownership of the means of production predominates in the economy. Collective ownership has prevailed in agriculture, but it may be gradually eliminated in the course of the agricultural reorganization initiated in 1970 (see ch. 13). Private ownership of productive resources is limited to subsidiary farm or garden enterprises of collective farmers, industrial and state farmworkers, and artisans; a small number of individual farms on marginal lands; and noncollectivized artisan shops. In 1971 private ownership encompassed about 10 percent of the agricultural land but only 2.5 percent of the fixed assets used in production. Private ownership of personal property and homes is allowed.
The proportions of national income (net material product) generated in each of the ownership sectors in 1971 were: state, 70 percent; collective, 21 percent; and private, 9 percent. The importance of private enterprise in the production of food, however, is much greater than its contribution to the national income may suggest. The private sector has provided more than one-fifth of the crop output and one-third of the livestock production (see ch. 13).
Whereas the leadership has promoted livestock production on private farm plots, since 1968 it has placed increasingly severe restrictions on the activities of private artisans, who had originally been encouraged to expand their operations through liberal regulations issued in 1965. Aside from providing essential services, private artisans played an important role in supplying a variety of consumer goods for the population. The restrictions on artisans' activities have been based on the BKP tenet that private ownership of means of production and the use of personal property to acquire unearned income are incompatible with the socialist order and the country's new constitution.
Economic activities are centrally planned and directed along lines prescribed by the BKP. The functions of planning and control are exercised by the Council of Ministers with the aid of specialized economic ministries, such as the Ministry of Finance, the Ministry of Chemical Industry and Power Generation, and the Ministry of Foreign Trade, and of various governmental committees and commissions (see ch. 8). The state banking system and, more particularly, bank credit have also served as tools for the control of enterprises and trusts.
The economic management structure has been subject to frequent changes. In the spring of 1972 there were fourteen economic ministries, including five ministries exclusively concerned with branches of industry and construction. The Ministry of Agriculture and the Food Industry, as its name implies, has functioned in two major economic sectors and has also had substantial responsibilities in the field of distribution. Among the committees and commissions the most important have been the State Planning Committee, the Committee on Prices, and the Commission for Economic and Scientific-Technical Cooperation. In December 1972 the Commission on the Living Standard was created to coordinate and control the fulfillment of the national living standard program decided upon by the plenum of the Central Committee of the Bulgarian Communist Party. Attached to the Council of Ministers and chaired by a deputy minister, the commission is composed of ministers and deputy ministers, representatives of public organizations, scientists, and other members.
Since the beginning of 1971 economic management has been more highly centralized than before. A plan for partial decentralization of economic decision making adopted in 1965 was abandoned by 1968. The economy is organized into trusts (officially known as state economic associations) that unite enterprises within branches of economic sectors along functional lines, such as metallurgy, textiles, food processing, railroads, freight forwarding, tourism, wholesale distribution, publishing, and filmmaking. In agriculture, trusts are known as agroindustrial complexes; each complex unites several previously independent farms (see ch. 13). Trusts are subordinated to economic ministries and are ultimately responsible to the Council of Ministers. The extent of the ministries' authority over trusts is not clear. In some important respects trusts receive instructions directly from the Council of Ministers.
Agroindustrial trusts number 170. In the nonagricultural sector about sixty-two trusts were originally created, with an average of thirty branches but as many as 106 in one instance. The process of concentration and centralization continued on a small scale at least until the spring of 1973, in part through the consolidation of separate trusts. Before the reorganization, trust branches had been legally and financially independent enterprises, and trusts served only as administrative links between enterprises and ministries. Whereas individual enterprises were previously regarded as the basic economic units in the country, it is the trusts that have been officially considered as such under the new system of management.
Trusts have assumed various functions previously performed by the enterprises themselves. They formulate economic and technological development policies for the trust as a whole and for each branch; establish relations with suppliers, distributors, and financial institutions; and centralize research and development. Trusts have also been charged with responsibility for providing operational guidance to their branches and for organizing the export of products that they manufacture. Branches remain responsible for the effective organization of operations, efficient uses of resources, and the conscientious fulfillment of tasks assigned to them by the annual plan.
Regulations governing the authority of trusts over their branches were intended to permit the establishment of flexible internal management organizations adapted to the particular needs of each trust. The trusts' policies were expected to be based on the rule that whatever the trust could do better than the branches should be centralized in it and, conversely, whatever the branches could do better than the trust should be left in their field of competence. Each trust was supposed to arrive at an optimal combination of management centralization and decentralization.