New Deputy PM: Bulgaria Must Stress High Labor Productivity

Bulgaria's new Deputy PM Mihov will be in charge of EU funds and Eurozone accession. Photo by Dnevnik

Ilian Mihov, INSEAD Professor recently nominated to become Bulgaria’s Deputy Prime Minister, has stated that the state policies should focus on achieving higher labor productivity.

“If Bulgaria becomes as rich per capita as Singapore, we will have fulfilled our goal. This will be a very hard task, but why not? 30-40 years ago Singapore was poorer than Angola but with mobilization, innovations this is possible, and Singapore is now richer than the USA. It has proven this is possible. There is no problem for Bulgaria to become a country of hi-tech and innovations in 20-30 years,” Mihov told Darik Radio Saturday.

He has stressed the fact that companies in Bulgaria must become more efficient and that obstacles to entrepreneurship must be removed.

In his words, Bulgaria must join the Eurozone by going step by step through the proper procedure.

“I am not saying that the budget deficit must be zero but once it reaches 3%, it is very hard to bring it down again. Greece is an example in hand,” he stated.

Mihov believes that Bulgaria will be able to adopt the euro by 2013 if its economy manages to recover from crisis in 2010.

“I have raised the question of introducing greater flexibility of the currency peg but if there is no consensus on that, and if prudent people such as Ivan Kostov and Georgi Ganev do not accept it, then it will not happen,” he said.

The INSEAD Professor has made it clear that Bulgaria does not need to seek an IMF loan because of the country’s low debt.

Mihov believes that the idea recently recommended to Bulgaria by Israeli PM Benjamin Netanyahu to reduce VAT by 0,5% every six months was a good one but faced technical difficulties such as the need to readjust the cash registers in Bulgaria.

In his view, by the end of 2010, the economic crisis will be overcome.

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