BULGARIA AND THE POPOV VISIT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00353R000100090001-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 12, 2016
• Document Release Date: December 11, 2001
• Sequence Number: 1
• Publication Date: September 17, 1974
• Content Type: MEMO

Approved For Release 20Q&h1 .: CIA-RDP85T00353R000100090001-6
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17 September 1974
SUBJECT Bulgaria and the Popov Visit
General
Bulgaria is going through a period of substantial change
that is altering the stereotyped image of a dreary country
populated by conformist, humorless and unenthusiastic people.
Earlier this summer, the US Ambassador in Sofia described
.Bulgaria as "bursting with vitality, artistically creative,
moving ahead economically, and reaching out eagerly for what
the West in general and America in particular can offer it."
Nevertheless, some important aspects of Bulgaria will
remain unchanged. It is essentially a closed society under
a leadership fearful of the impactrgf Western ideas and
closely allied with the Soviet Union for sound political
and economic reasons. Since 1958, for example, Bulgaria
has received four to six billion dollars worth of Soviet aid
in various forms--far more, in proportion to its size, than
any other member of the Council for Economic Mutual Assistance
(CEMA).
Partly in exchange for economic assistance, Bulgarian
leaders regularly serve as spokesmen for Moscow's interests.
At the behest of the Soviets, Party Chief Zh.ivkov has taken
a leading role in calling for an International Communist
Conference. At the same time, he has traveled to nearly every
socialist country, pushing such Soviet-endorsed policies as
bilateral economic cooperation within the overall framework
of CEMA, socialist unity, and a united front against China.
There have been indications over the past year, however,
that the Soviets told the Bulgarians that they cannot continue
to keep up with Bulgaria's expanding economic needs. As a
result, Sofia has apparently received a green light from
Moscow to seek additional assistance in the West.
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 Approved For Release 2002/01/14: CIA-RDP85T00353R000100090001-6
--Recent efforts to woo the US are part of this push smier
and will become even more evident when Deputy
Popov is in Washington next week.
The Econom
1973 continued to have one of the
i
'
n
s economy
Bulgaria
highest growth rates in East Europe. National income rose by
an estimated 8.7 percent and, despite some shortfalls in
agriculture and construction, overall performance met or
surpassed planned rates of growth. A chronic labor shorn ag7arly
continues to affect all sectors of the economy,
agriculture. The Bulgarians are also having some trouble
with obsolete plants and equipment, unused production capacity,
uncertain management, and other problems long associated with
centrally directed economies in the Communist world.
Recent worldwide shortages of petroleum and raw materials
have had a relatively small effect on the economy. Bulgaria
Trade agreements with the Soviet Union will supply about 70 percent of its petroleum needs through 1975. None-
theless, increased prices and cutbacks in deliveries from
Arab oil-producing nations did result in some shortages in
late 1973 and early 1974. Gasoline prices, for instance,
jumped 100 percent last February.
Bulgaria's economy is heavily oriented toward foreign
trade, approximately 80 percent of which is with the
Soviet Union and Eastern Europe (55 percent with the USSR);
15 percent is with the West (West Germany, Italy, France,
Great Britain, Japan and Austria are the major trading
partners); and five percent is with the less developed
countries. Trade with the US constituted about 0.2 percent
of Bulgaria's total foreign trade.in 1973.
Popov' s Areas of Interest
While in the United States, Popov will probably concentrate
on three general economic topics:
--Industrial Cooperation: Popov will seek US participation
in large scale industrial projects in Bulgaria in at
least six areas, including metallurgy, mining, ship-
building, electronics, agriculture and petroleum
exploration in the Black Sea shelf. Since Bulgarian
law prohibits foreign equity ownership, he will propose
"joint ventures," in which the US supplies technology
and equipment in exchange for a percentage of the
plant's output.
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--Trade: Popov will point out that trade with the US,
although doubled in 1973, remains far below its
potential. Bulgarian leaders recognize that with
full employment of a basically semi-skilled labor
force, and an economy strained to the utmost,
any further improvement of industrial and agricultural
capacity can only come from better technology and
increased labor productivity. Many Bulgarian
officials automatically assume that US products are
the best available. Bulgaria already buys American
goods from third countries, but would prefer to buy
from the source. Their ultimate goal, of course, is
a long-term trade agreement with the US with MFN
status. Popov has a realistic appreciation of the
US's attitude on these matters.
--Credits: Bulgaria wants an EXIM bank contract to help
finance the technology it intends to import for the
next Five Year Plan. It now receives a full line of
credits from West Europe, and particularly West
Germany. Loans to Bulgaria are regarded as safe
because the economy is reasonably sound and, perhaps
more importantly, because the Soviet Union is not
likely to let its favorite ally go into default.
Ivan Popov
Popov is the highest ranking Bulgarian official to come
to this country since 1960. He is visiting in his capacity as
Deputy Premier, but he is also a full member of the party
Politburo and a close confidant of party and state chief
Todor Zhivkov.
Popov, who is 67, is an electrical engineer and has held
a variety of scientific and technical posts in his government
since the 1950s. He is impressed by the performance of the
Western economies, and is keen to introduce Western methods
into Bulgarian industry so that the country can compete in
world markets.
Those who have seen him in action say he is an impressively
:i_niLelligent and sophisticated man. He prepares well
for discussions, knows exactly what he wants to achieve,
aZnd presents his case in a well-reasoned and straightforward
manner. When his points are challenged, he is cool
and logical in response.
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Popov handles business matters quickly and efficiently.
A serious man, he is unwilling to spend time on side issues.
In preparing for this trip, for example, he was not receptive
to visiting scenic areas or examining the various facets of
American society. Nevertheless, he is a cordial host and,
although he drinks very little himself, he makes frequent toasts
during dinners and receptions.
Popov has never been to the United States, but he has
traveled widely in the West and lived in France as a student.
He is impeccably groomed, has fine manners and a good sense of
humor. He is fluent in German, French and Hungarian. He under-
stands some English but always uses an interpreter.
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