Bulgaria Slips Deeper Into Economic Crisis

IN an outdoor park cafe near Sofijska Komuna Street, a dozen patrons huddle in the freezing late-night fog, drinking coffee under flickering green neon lights. Around them, the streets and buildings that bound the park in downtown Sofia are deserted and dark. ``They've turned off the electricity again,'' says Valentin Stoyanov, pointing to a gloomy bank of row houses and apartment buildings. ``There's no heat either.''

Bulgaria is slipping deeper into its worst economic crisis ever, bringing increasing hardship. Once self-sufficient in agriculture, Bulgaria has had to plead for foreign food aid this year.

Basic foodstuffs are scarce or have disappeared altogether from Sofia's store shelves. Sugar, cheese, flour, eggs, and cooking oil are rationed, along with fuel oil and gasoline. Lines at Sofia's few gas stations snake for miles through city neighborhoods and the wait for a tank of gasoline can be more than 12 hours. Electricity is shut off for long periods each day in many neighborhoods. Only a fraction of the city's street lamps are switched on at night.

The situation is so dire that Prime Minister Dimitar Popov has warned that Bulgaria faces ``a hard and decisive fight for survival'' in the coming months.

The collapse of the Soviet-led Comecon trading bloc and the Gulf crisis have put increasing pressure on the country's fledgling efforts to overcome four decades of communist mismanagement. Supplies of Soviet crude oil have dwindled, and Moscow is now demanding payment in hard currency for future shipments, an almost impossible task for the nation's bankrupt treasury. Worse, Iraqi oil deliveries were halted by the United Nations trade embargo against Baghdad.

Iraq owes Sofia more than $1.2 billion from previous trade deals and had agreed before the invasion of Kuwait and the imposition of sanctions to repay the debt in oil. As a result of the loss, Sofia has been forced to increase the export of precious meat and livestock reserves to pay for oil.

Reformers blame former communist leader Todor Zhivkov for shattering Bulgaria's economy. Mr. Zhivkov, who was ousted in 1989 after 35 years of rule, went on trial last week in Sofia on charges of corruption and misappropriating millions of dollars.

Zhivkov's policies, economic reformers say, ruined Bulgaria's once successful agricultural sector and polluted the nation. A chronic shortage of spare parts and raw material has seriously hurt heavy industry.

Agricultural production was further damaged by the exodus of hundreds of thousands of ethnic Turks, many of them farmers, who fled the country in 1989 to escape growing persecution under Zhivkov. Few have returned since Zhivkov's fall.

Bulgaria's communist government also left the nation saddled with $11 billion in foreign debt. The cash-strapped new government last March froze payments on the debt, but unpaid interest on it is mounting, more than $367 million so far.

Economic reforms are also beginning to bite. Prices have jumped tenfold in recent weeks, with an inflation rate nudging 200 percent. More increases are expected as further government controls are removed.

In 1990, production dropped by 10 percent and more than 70,000 workers lost their jobs. That number is expected to increase to 300,000 this year as more and more factories fail without the support of generous government subsidies.

But government leaders express optimism that foreign help will increase as the nation turns to a market economy. There are also plans to lure more Western cash by promoting tourism at the country's Black Sea beach resorts.

To speed the process, Central Bank officials want to make Bulgaria's lev convertible soon. Like other reforming East European nations, currency convertibility is a key component in Bulgaria's shift to a market economy.

Sofia wants a $380 million standby loan from the International Monetary Fund to help with currency convertibility.

As the government haggles over reforms, many Bulgarians have become small entrepreneurs out of necessity. Near the Sheraton Balkan Hotel, where foreigners with hard currency can stay and dine in luxury, vendors offer everything from hand-carved trinkets to silver and gold family heirlooms.

Raiko Bodurov, a factory worker, sells hand-painted decorative plates after his 12-hour shift. He says he earns about 500 leva a month at his factory job, about $16 at the market rate likely to be used after convertibility is established.

``We need this money just to get by,'' he says.

-30-{et