Mr. Nikolay Vassilev is Deputy Prime Minister and Economy Minister of the Republic of Bulgaria. Before his appointment in the government he worked as Senior Vice President and Head of Central and East European Research at LAZARD CAPITAL MARKETS, London, UK. He also worked as tax consultant at COOPERS & LYBRAND, Budapest; Japanese Financial Markets Strategist at SBC Warburg, Tokyo; Equity Analyst of the Emerging European capital markets at SBC Warburg Dillon Read, New York, and Equity Analyst and Global Emerging Markets Strategist at UBS WARBURG. He holds a Master's Degree in International Economics and Finance from Brandeis University, Massachusetts, U.S. He also majored in Tax Policy and Finance at Keio University, Tokyo. He is married. He is fluent in Hungarian, Russian and English and has basic knowledge of German, French and Japanese.
Deputy Prime Minister Nikolay Vassilev answered questions of novinite.com
Q: Mr. Vassilev, obviously there are people who want to split the Economy Ministry in several smaller ones. How will you comment this idea?
A: This is an option that has been promoted by some media for some time. Only the prime minister can give an exact answer to that question.
Q: Do you think there is a need for structural changes in the government?
A: That is also a question that could only be answered by the government and the prime minister.
Q: How do you assess the Bulgarian economy since you became economy minister? What didn't you manage to do or complete?
A: I became economy minister about a year and a half ago with the big desire to help accelerate reforms in Bulgaria. One of the biggest successes for us is that the European Commission classed Bulgaria as a functioning market economy this autumn. That is a proof that the economic climate in Bulgaria is better than a year ago and the business has better working conditions. At the same time, I realize very well that much more work needs to be done to improve the living standard and in the combat with poverty and unemployment.
Q: If you could go back a year back, would you change something?
A: In spite of all difficulties over the last twelve months I think that this was an extremely dynamic and very successful in many fields year. Though we are getting wiser with time, I could change few things. It is more important to change the future.
Q: Why the Council of Ministers did not approve some of the measures for stimulation of the economy that you proposed?
A: It could not be said that the Cabinet did not approve these measures. In mid-October, I presented in Parliament a package of nine measures. Three of them were approved by the Council of Ministers in the end of November. These were the trade law, the decision to establish a venture capital fund and the law for restriction of the administrative control over the economic activities. I expect soon the industrial zones law to be voted.
In the meantime, some analyses appeared in the media, based on a wrong thesis, namely, that the economy ministry envisages tax preferences in the industrial zones law. That is not true, there are no tax preferences in that law. A couple of months ago, I gave to the finance minister four proposals for amendments in the income tax law. They envisage zero tax profit for the poor municipalities with high unemployment. Probably, the companies in these municipalities will not pay profit tax no matter whether they work in the zones or outside them. This law will not secure tax preferences for the richer municipalities.
Q: Do you expect to reach a compromise on budget 2003 with the International Monetary Fund by the end of the year?
A: I met with the representatives of the IMF mission, including Mr. Jerald Schiff a couple of weeks ago. As far as the budget is concerned, I fully support the finance minister and the finance ministry. I do not share the skepticism of the International Monetary Fund. We think that a little better tax collection, including in the customs, and better collection of the social securities contributions, will bring more revenues in the budget. I think that we will reach a constructive compromise with the Fund.
Q: What do you expect to be the decision of the Supreme Administrative Court on the Bulgartabac deal in the end of December?
A: You know that the judicial power is independent in Bulgaria and any comment of mine on the issue could be considered interference in the magistrates' work. Like you, I am only waiting for the decision of the Supreme Administrative Court and will comply with it.
Q: How would you comment the claims of the rightist opposition for wrongdoings in the privatization procedure of the Bulgarian Telecommunications Company?
A: The claims of the United Democratic Forces are extremely incompetent. That is an attempt of those who committed the biggest economic crime by not selling BTC to clear up their own guilt.
Q: Are there any chances to privatize Bulgartabac and the Bulgarian Telecommunications Company by the end of the year?
A: Most probably both deals will be closed in the beginning of 2003. In fact, we have never made the commitment to close these deals by New Year; we were speaking of purely technical terms.
Q: Are you pleased with the amount of foreign investments in 2002?
A: It can always be wanted more. It is clear that if the privatization of Bulgartabac and BTC had closed by the end of the year, the final result would have been much better. In the long term, however, there is no big difference whether the money will enter the budget in the end of December or in the beginning of 2003.
Q: What are the conclusions that the ministers made after the two non-confidence votes of the opposition?
A: There is no longer partition between the right wing and the left wing opposition in Bulgaria. Neither of the two parties has offered any ideas for better governance of the country over the last one and a half year.
Q: What is your optimistic forecast for the Bulgarian economy for the next year?
A: Economic growth of five percent, implementation of the budget, improving the competitiveness of the Bulgarian economy, serious progress in privatization and the structural reforms as well as over USD 1 B foreign investments.
Q: What is your pessimistic forecast?
A: Growth under three percent and less than USD 500 M - USD 600 M foreign investments.
Q: What makes the Bulgarian economy more attractive compared to the other countries in Southeastern Europe?
A: Bulgaria is among the countries with lowest taxes in Europe. Also, we have highly qualified employees. Although it is not pleasant for me as economy minister to admit that - the average salary in Bulgaria is three times lower than that in Central Europe. We can also boast with macroeconomic stability and European legislation.
Q: What are the biggest economic challenges that Bulgaria faces today?
A: The closure of the big privatization deals, the restriction of corruption.
Q: You initiated the Bulgarian dream project? What is the Bulgarian dream?
A: My dream is for modern economic education in Bulgaria - the students to be able to study foreign languages and work with Internet. In the beginning of the week together with my colleagues from the education and sports ministries, we signed a memorandum, aiming at turning the Bulgarian education in another direction. The education of highly qualified economists, acceleration of the harmonization of the Bulgarian with the world education system and modernization of the study plans are among the priorities in the memorandum. Foreign languages and computer literacy education in university, obligatory summer internships after each academic year and setting up of career centers are also included in the memorandum.
Q: Do you still believe that the Bulgarian dream will become reality? Actually, what is your dream?
A: The Bulgarian dream to turn into reality, all of us to live better. This doesn't depend only on the politicians but also on all of us who live here.
Q: Do you expect more young people like you who have worked and lived abroad to come back?
A: Over the last months, only to my ministry five people from different parts of the world came back and work now. In my opinion, Bulgaria gets more and more attractive to people who graduated and worked for a while abroad.
Q: Many of the novinite.com readers are Bulgarians who live abroad. What are the three most important things that you would like to tell them?
A: Bulgaria loves you and thinks of you as its children. No matter where you live and work, you are part of our country and us. Bulgaria changes dynamically and gets more and more like the European countries. There is no more that much corruption and crime in Bulgaria. There are many work opportunities for the young highly qualified experts with good payment. We can say that there is a deficit of managers. The success of our country depends on you. We will help everyone who wants to come back.
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