Hi from Sofia,

In the late 1980s my friend Tom Palmer, now Vice President for International Programs and Director of the Center for the Promotion of Human Rights at the Cato Institute, crisscrossed the captive nations of Central and Eastern Europe cultivating contacts sympathetic to free market capitalism. When I first went to newly “liberated” Bulgaria in February 1992, leading an IMF technical assistant team to the Bulgarian National Bank, Bulgaria’s central bank, Tom gave me the names of his two contacts in Sofia, Bulgaria’s capital. Philip Harmanjiev and Ivo Prokopiev were young reporters for 24 Hours one of Bulgaria’s many newspapers and one of several English language business newspapers. I met with them and have met with them on every subsequent trip to Sofia. They were bright, ambitious, and eager to learn about the West. They were shining examples of the great good to the world resulting from the lifting of the shackles of Soviet repression from a new generation of men and women eager to make their mark on the world.

Today, still in their 30s, they created and own respected business and other publications in Bulgaria. Philip bought a small winery in southern Bulgaria as part of the country’s privatization program and is now a wine producer, wine importer and creator, owner, publisher of Bacchus, Bulgaria’s wine magazine. With Ivo he founded Capital Weekly, a respected political and business paper, then Dnevnik, the leading business daily. These are now among the many publications of Economedia, the leading Bulgarian provider for business media owned by Ivo and Philip. Ivo’s wife Galya is Editor-in Chief of Capital Weekly. Ivo is Chairman of the Board and CEO of Economedia, and of Alfa Finance (which includes among its holdings Capital Bank in Macedonia), and is Chairman of the Association of Employers and Industrialists of Bulgaria (AEIB). For three years now AEIB and Capital Weekly have put on a conference on business and government issues to which Galya invited me as one of this years speakers: "The Financial Crisis: Bulgaria in the Global Economy". This is my second trip abroad to address bankers and the business community on America’s subprime mortgage and related financial crisis that has resulted from friends reading my occasional travel and economic notes. The first was earlier this year to Amman, Jordan.

Yesterday was my 15 minutes of fame in Bulgaria, which lasted most of the day. I was up at 4:00 am (because I couldn’t sleep) and picked up at 6:55 am and driven to the studio of the Bulgarian National Television station. At 7:15 my face was powered to prevent it from shinning under the TV lights and from 7:30 to 7:45 am I was interviewed on the probable impact on Bulgaria of the global financial panic. The conference for which I had been brought to Bulgaria started at 10:00. Following the address of Ivaylo Kalfin, Minister of Foreign Affairs and Deputy Prime Minister of Bulgaria, Kristalina Georgieva, a VP at the World Bank, Fabio Ganzer, Head of the International Department, Shell International, and I spoke. Other speakers included, Ivan Iskrov, Governor of the Bulgarian National Bank and Plamen Oresharsky, Minister of Finance.

At the end of the conference in the late afternoon, two young Capital Weekly reporters interviewed me about the same topics. I could not help but marvel that this story had come full circle. The two young reporters worked for the newspaper established and owned by the two young reporters for 24 Hours I had met just sixteen years earlier. They were about the same ages as Ivo and Philip had been back then. In between Bulgaria experienced a banking crisis and hyperinflation in 1996 and adopted a currency board in 1997 since which it has become one of the most rapidly growing economies in Central and Eastern Europe (currently around 7% per annum). Capitalism, with its freedom for individuals to express themselves and develop their talents, has opened up the human potential and brought the world a very long way. It has always been an irregular path and I am here in Bulgaria to discuss one of its bigger bumps in the road, but I have no doubt that it will continue to open the way for man kind to reach ever greater and greater heights.

Author: Warren Coats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 1975 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My recent books are One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina; My Travels in the Former Soviet Union; My Travels to Afghanistan; My Travels to Jerusalem; and My Travels to Baghdad. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon.

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