Bulgaria's currency board architect says corruption still biggest problem
Corruption remained the biggest problem that Bulgaria's economy faced, the architect of the country's currency board agreement told Bulgarian national radio (BNR) on May 5.
"Corruption is Bulgaria's biggest problem, it is the area where my advice has not been heeded," Steve Hanke said.
Hanke, who was a senior economist on the council of economic advisors to US president Ronald Reagan, drafted the currency board agreement Bulgaria adopted in 1997, after a banking crisis wiped out billions in savings and shattered the country's financial services sector. Under the currency board agreement, the Bulgarian lev was pegged to the German mark and then the euro.
"My recommendations on flat tax, fiscal control and economic deregulation have all been implemented. Corruption and organised crime, however, remain the Achilles' heel of Bulgaria's economy," Hanke said.
Hanke said that the performance of Bulgaria's economy in 2009 was more likely to fall in the variation band forecast by the Bulgarian National Bank, which last week estimated that the country's economy would shrink by no more than two per cent this year and could grow by as much as 0.6 per cent, rather than the more pessimistic scenario of the International Monetary Fund, which said it expected Bulgaria's gross domestic product to contract by as much as three per cent this year.
"Corruption is Bulgaria's biggest problem, it is the area where my advice has not been heeded," Steve Hanke said.
Hanke, who was a senior economist on the council of economic advisors to US president Ronald Reagan, drafted the currency board agreement Bulgaria adopted in 1997, after a banking crisis wiped out billions in savings and shattered the country's financial services sector. Under the currency board agreement, the Bulgarian lev was pegged to the German mark and then the euro.
"My recommendations on flat tax, fiscal control and economic deregulation have all been implemented. Corruption and organised crime, however, remain the Achilles' heel of Bulgaria's economy," Hanke said.
Hanke said that the performance of Bulgaria's economy in 2009 was more likely to fall in the variation band forecast by the Bulgarian National Bank, which last week estimated that the country's economy would shrink by no more than two per cent this year and could grow by as much as 0.6 per cent, rather than the more pessimistic scenario of the International Monetary Fund, which said it expected Bulgaria's gross domestic product to contract by as much as three per cent this year.