Another important measure affecting labor was announced in March 1973—a gradual transition from a six-day, forty-six-hour workweek to a five-day week of forty-two and a half hours. Under the BKP directive the transition must be accomplished without loss in production; the loss in worktime must be compensated by a corresponding rise in productivity. The shorter workweek had been in effect on an experimental basis for about 17 percent of the industrial workers since 1968. In 1973 and 1974 it was to be introduced in enterprises of the material production sector, excluding agriculture, provided that the required rise in productivity has been assured. In 1975 the reduced workweek will be introduced in transport, for management of state economic enterprises, and for persons employed in the field of services other than health services and educational institutions. Preparations for experiments with a shortened workweek in these two areas and in agriculture are to be undertaken in 1974 and 1975. The decree on working hours gave formal approval to an established practice that requires workers to make up by work on Saturdays or Sundays for worktime lost whenever official holidays fall on weekdays.
INVESTMENT
The proportion of national income devoted annually to capital formation (net investment) rose steadily from 22.6 percent in 1961 to 35.4 percent in 1966 and 1967 and declined thereafter progressively to 26.8 percent in 1971. In absolute terms annual capital formation increased from 1.06 billion leva in 1961 to 3.06 billion leva in 1970, then declined to 2.74 billion leva in 1971. More than half the net addition to capital (from 46 to 67 percent annually) consisted of fixed assets; the balance represented equipment and inventories.
Gross investment at current prices increased from 1.4 billion leva in 1961 to 3.6 billion leva in 1971; investment was officially estimated at 3.9 billion leva in 1972 and was scheduled to reach 4.3 billion leva in 1973. The bulk of investment has been channeled into the material production sector (including trade). The annual investment share of this sector increased from about 74 percent in 1960 to 79 percent in 1969 and declined to 76 percent in 1971. The proportion of investment devoted to housing and services declined correspondingly in the 1960-69 period from 26 to 21 percent and rose in the subsequent two years to 24 percent. The shift in the investment trend foreshadowed the formal directive issued by the Tenth Party Congress in April 1971 for the development of a program to raise the population's standard of living.
Industry has been the main beneficiary of investment funds; its share rose to almost 50 percent in 1969 but declined slightly thereafter. Agriculture received only about 15 percent of investment in the years 1969 through 1971, compared to 28 percent in 1960 and 19 percent in 1965. Residential investment declined from 14 percent in 1960 to an average of not quite 10 percent in the 1969-71 period.
Building construction and installation work absorbed the largest, though declining, share of investment—60 percent in 1960 and 46.4 percent in 1971. The share of investment spent on machinery and equipment rose by 50 percent in the 1960-69 period from 26 to 39 percent, but declined to 34 percent in 1970 and 37 percent in 1971. Imported machinery, mostly from the Soviet Union, constituted a major though declining proportion of investment in machinery—from two-thirds to one-half of the total in the 1965-71 period. Other investment expenses, including geological surveys, absorbed from 12 to 17 percent of annual investment.
New investment has been increasingly concentrated in state enterprises. In the 1960-71 period the proportion of investment absorbed by state enterprises increased from 68 to 83 percent, while the share of investment devoted to collective farms declined from 18 to 8.5 percent. Annual investment in artisans' collectives rose from 1.2 percent of total investment in 1960 to 2.7 percent in 1968 and declined to 1.1 percent in 1971. This trend paralleled the government's policy of initial encouragement and subsequent restriction of private artisan activities; it suggests that the government's restrictive policy may not have been limited to private artisans alone (see Organization, this ch.).
Private investment in residential construction declined from 12.7 percent of annual investment in 1960 to 6.5 percent in 1970 but rose to 7.2 percent in 1971. In absolute terms private investment increased from about 174 million leva to 262 million leva. By 1973, however, new restrictions were being introduced on housing construction by private individuals. As much as 90 percent of the residential construction in 1960 and 70 percent in 1971 was privately financed. In the 1968-70 period about half the private investment in housing was supported by bank loans or by loans from special funds of employing organizations.
The rise in the volume of capital per worker in the 1960-70 period as a result of the investment activity did not produce a corresponding increase in labor productivity; that is, the efficiency of investment declined. Whereas the amount of fixed capital per worker in the sphere of material production increased at an average annual rate of 10.4 percent, and the volume of machinery and inventories rose by 12.5 percent per year, output per worker increased at an annual rate of only 7.7 percent. In an effort to increase the efficiency of investment, the Tenth Party Congress, convened in the spring of 1971, directed that 35 percent of new investment in the sphere of material production during the 1971-75 period should be used for the reconstruction and modernization of existing facilities. In 1972, however, the proportion of investment used for this purpose was only 18 percent.
In the context of the eventually abandoned program for economic decentralization, provision was made for reducing the role of the central government budget in financing investments and for increasing participation by investors with their own funds and bank credits. In the sphere of material production, excluding trade, budgetary allocations in 1965 accounted for 55 percent of investment, and bank credits made up 7 percent; in 1969 investment funds from these sources constituted 21 and 32 percent, respectively. The contribution from the budget, however, rose again after 1969 to 28 percent in 1971, whereas bank credits declined to less than 20 percent of the investment funds. The share of investors' own resources, including funds of local governments, increased from 36 percent in 1965 to 52 percent in 1971. Budgetary investment funds are being increasingly concentrated on projects in the fields of services and raw materials production.