The transition to the new management system involved difficulties because of delays in issuing pertinent regulations, misinterpretation of the regulations by trust managers, and the reluctance of enterprise managers to acquiesce in the loss of their independence. Most of the organizational and personnel problems were reported to have been resolved by the end of 1971, and in March 1973 party chief Todor Zhivkov reported that further consolidation of the new management structure had been achieved. In the long run, greater efficiency of economic management is to be attained through pervasive automation of all management functions with the aid of a synchronized national network of electronic computers.

Under the new system of trusts, profits of individual branches are pooled and redistributed by the parent organization. Highly productive branches may thus find themselves in the position of having to share their profits with unproductive branches. This feature, some observers believe, may reduce incentives to raise the level of efficiency, increase output, and improve the quality of products.

STRUCTURE AND GROWTH

National income (net national product, which excludes most services not directly related to production) was officially reported to have been 10.41 billion leva (for value of the lev—see Glossary) in 1971, compared to 10.53 billion leva in 1970. Nevertheless, the official index of national income growth showed an increase of 7 percent from 1970 to 1971. This example illustrates the difficulty of using official statistics to describe the structure and growth of the economy or structural changes over a period of time.

According to the 1971 statistical yearbook for Bulgaria, the respective shares of industry and agriculture in national income in 1970 were 49 and 22 percent. The yearbook issued in 1972, however, cited 1970 figures of 55 and 17 percent instead. According to the earlier source, the proportion of national income contributed by industry increased by 6.5 percent in the 1960-70 period, whereas the subsequent source shows a growth of 17 percent for the same period. Similarly, the contribution of agriculture to national income was reported to have declined by 36.4 and by 33.3 percent. An upward trend in the contribution of trade to national income was shown in the earlier source, but a declining trend appeared in the latter.

The differences in statistical presentation resulted primarily from a major revision of wholesale prices, introduced by the government in January 1971. Price revisions made in earlier years, changes in the composition of individual statistical categories and other methodological modifications also contributed to the inconsistency of statistical time series in value terms. Because of differences in concept and coverage, Bulgarian national account data are not comparable with those of the United Nations or the United States systems of national accounts.

In the 1960-71 period national income at prices of 1957 was reported to have increased 2.25 times, which is equivalent to an average annual 7.7 percent rate of growth. The growth of national income was more rapid in the years 1966 through 1971 than it had been in the 1960-65 period. The official national income index implies an average annual increase of 8.5 percent in the latter period, compared to 6.7 percent in the earlier years. Reliable data on the growth of Bulgarian national income in Western terms are not available. Relatively high rates of economic growth are generally associated with early stages of industrial development.

In 1971 industry still lagged behind agriculture in terms of employment, although the proportion of the labor force employed in industry had been steadily rising, while employment in agriculture had been declining. In the 1960-71 period employment in industry rose from 21.9 to 31.2 percent of the labor force, and employment in agriculture declined from 54.7 to 33.4 percent of the total. During the same period employment in the services sector increased from 9.2 to 13.4 percent of the labor force, and gains in employment were made in all other economic sectors except forestry, including construction, transportation and communications, and trade.

LABOR

Growth and productivity of the economy have been adversely affected by shortages of skilled labor and of adequately trained and experienced technical and executive personnel. In the words of the minister of labor and social welfare, the level of worker's current training is inconsistent with the country's industrial base; it lags behind the requirements of the scientific and technical revolution. The lack of required skills has contributed to frequent machinery breakdowns and to the output of low-quality products. As a means of upgrading the skills of workers and executives, a broad program for training and retraining was launched in October 1972 with the cooperation of the Ministry of National Education. About half the number of persons undergoing training were below the age of thirty.