Bulgarian Strategy Is Made in U.S.


By DAVID BINDER, Special to The New York Times
Published: October 09, 1990

A group of American experts has taken on the moribund economy of newly democratic Bulgaria and has drawn up a plan for transforming it into a supply-side, free market.

Their work, under the auspices of the United States Chamber of Commerce, was hailed by President Zhelyu Zhelev, who said during a visit here last month that major features of the American plan would be adopted and incorporated into Bulgarian law later this month.

The so-called Action Plan for Bulgaria was drafted by 18 Americans, including some high-powered Reagan Administration officials. It includes such predictably simple recommendations as ''privatization of the means of production and distribution'' and ''basic reform of the monetary, banking and fiscal systems'' to remove impediments created by 45 years of Communist rule.

Guidelines and Deadlines

It is in the details and timetable worked out by the Americans, in cooperation with Bulgarian specialists, that the plan displays its originality as a schedule for transition from what remains largely a Communist economic structure to one recognizable as a Western model.
For example, the plan declares it ''absolutely essential for the functioning of a market system'' that by the end of the year, Bulgaria should adopt a ''privatization program,'' begin basic monetary reform and allow free circulation of foreign currencies, eliminate wage and price controls, take steps to protect the poorest elements of the population from hardships and agree on tax reform. It then provides precise guidelines for carrying out these measures.

''It is the most fascinating thing I have ever done in my life,'' said Richard W. Rahn, vice president of the Chamber of Commerce and its chief economist. It is a sentiment echoed by the other Americans on the project, which was initiated last spring.

''The only way to prevent me from going back to Bulgaria is for the U.S. Government to take away my passport or the Bulgarians to deny me a visa,'' said Charles E. McClure, a former Assistant Secretary of the Treasury, who wrote the chapter of the plan on tax policy.

Another enthusiastic participant is Eugene L. Stewart, a Washington lawyer who specializes in commercial legislation. Mr. Stewart, who is 70 years old, spent August taking apart the Commercial Code of Bulgaria, which was promulgated in 1896, and rewriting it to make way for modern international business transactions.
Charles Murray, the conservative social thinker, who is the author of ''Losing Ground,'' contributed a chapter on revision of Bulgaria's social welfare policies.

The chapter on privatization was written by Ronald D. Utt, former associate director of the Office of Management and Budget and now vice president of the National Chamber Foundation, the research arm of the Chamber of Commerce, which has sponsored the Bulgaria project.

Mr. Rahn said in an interview that the impetus for the plan came from Government officials in Sofia who were aware of a lecture he gave last winter in Hungary on transition to market economies. ''They invited me in March,'' he recalled.

He met with economists of the post-Stalinist Government that had taken power in November 1989 and with Prime Minister Andrei Lukanov, himself an economist. ''We need technical assistance,'' Mr. Lukanov and the other Bulgarians told Mr. Rahn.

After visits by an American delegation to Sofia and a Bulgarian delegation to Washington, the American team spent several weeks in August in Bulgaria working with their counterparts on the final draft of the plan, which was put together and printed in late September. The head of the Bulgarian delegation is Ivan Angelov, economic adviser to Mr. Lukanov.
Evidence of the enthusiasm of the members of the American group may be seen in the fact that they have paid their own way to Bulgaria and have donated their time, Mr. Rahn said. As far as he could tell, the Chamber of Commerce's Bulgaria plan is unique in terms of its Western origin and its comprehensiveness.

Acceptance Likely

In a news conference at the Chamber of Commerce, Mr. Zhelev said he was confident the Bulgarian Government would accept virtually all the recommendations, even though the Government is in the hands of the Socialist Party, which is the successor of the former ruling Communist Party.

''They will be eager to proceed,'' he said, ''because otherwise the Government will fall.'' Mr. Zhelev heads the main coalition of opposition parties in Bulgaria.

The American team delivered its 600-page draft to Mr. Lukanov in Sofia last week. The Bulgarian reform program is to be taken up in the Grand National Assembly on Tuesday.