It doesn’t happen every day that a 32-year old former investment banker gets to be a Deputy Prime Minister. Why and how do you make the move from the cozy offices of Lazard Freres in London to leading the emerging economy of Bulgaria?
Mr. Nikolay Vassilev will have the answers to that, and all your other questions relating to the problems and opportunities in the reforming Eastern Europe, while he visits HBS this week for a presentation and Q&A session, on Thursday, May 9th, at 5:00 p.m. in Aldrich 210, followed by a cocktail reception at the Spangler Meredith Room. The visit is co-sponsored by the European Club at HBS and the Kokkalis Program at the Kennedy School of Government.
Situated in the Balkan Peninsula, a perennial center of turmoil over the last 10 years, Bulgaria rarely gets much attention. However, not making the front page of the world papers is not necessarily bad, given that the newsworthy Balkan events are rarely positive. In spite of the region’s infamous volatility, Bulgaria remains an island of stability. Promoting peaceful co-existence on the Balkans, Bulgarian governments have had to make decisions not always aligned with the country’s economic interests. Bulgaria fully subscribed to the embargo against neighboring Yugoslavia, damaging Bulgarian trade routes and partnerships. Bulgaria also participated in the embargo against Iraq, granted an air corridor to NATO during the strikes against Serbia, and supported all major initiatives of NATO and EU in the region.
Mr. Vassliev is Deputy Prime Minister and Minister of the Economy in the government formed by the National Movement for Simeon II. The Movement came into power in June 2001 by winning the parliamentary elections by a landslide. Bulgarians rallied behind ex-King Simeon Saxe-Coburg-Gotha, who promised to eliminate corruption and to implement swift reforms that will improve the dire social situation of the population within 800 days.
The new government inherited a stable economy, with compound annual Real GDP growth of 3% over the past 4 years. The previous government (Union of Democratic Forces) controlled the hyperinflation of the mid 1990’s and reduced it to approximately 6% annually by instituting a currency board tying the Bulgarian lev to the Euro. State-owned enterprises were being privatized. Average wages increased with 15% over 2000. Unemployment, however, grew from 14.2% in 1997 to 17.1% in 2000. Politically, Bulgaria developed closer ties with the United States and Europe and became a top candidate for the next wave of NATO and EU expansion.
Mr. Vassilev and the cabinet have the formidable task to continue privatizing the largest state-owned enterprises, reducing taxes and tariffs to prepare the Bulgarian economy for NATO and EU integration, while constrained by the strict fiscal discipline imposed by IMF, the large public debt, and the impatient Bulgarian public.
The Government has focused on tightening the fiscal policy, improving the business climate, and forcing structural reforms. The current account deficit was reduced, leading to the signing of a new two-year stand-by agreement with the IMF. The Government is trying to carry through its privatization program within a two-year schedule, giving priority to strategic investors. A new law was recently adopted aiming to make privatization more transparent. The Ministry of Finance has focused on more active management of the foreign debt (by refinancing and eliminating rate and currency risks). The rating agencies raised the country ratings to BB- and gave a positive outlook for the Bulgarian economy.
Mr. Vassilev has a degree in Economics (University of Economics, Budapest), a Bachelor’s Degree in Finance and Economics (State University of New York), and a Master’s Degree (International Economics and Finance, Brandeis University). Before becoming the Deputy Prime Minister and Minister of the Economy of Bulgaria, Mr. Vassilev worked as a consultant for Coopers & Lybrand in Budapest; as an officer for Japanese finance markets strategies at the Analyses Department of SBC Warburg, Tokyo, and as an analyst for Emerging European Capital Markets with SBC Warburg Dillon Read, New York. Between 1997 and 2000 he was an Associate Manager of Emerging Markets in Europe and World Emerging Markets Strategies for UBS Warburg in London. In 2000 he became the Senior Vice President and Director for Central and Eastern Europe Studies at Lazard Capital Markets in London. Mr. Vassilev is a Chartered Financial Analyst. He is fluent in Bulgarian, Russian, Hungarian, and English, and has working knowledge of German, French and Japanese.