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Dr. Alexander Mirtchev Discusses Emerging Markets' Response to the Global Economic Downturn With EuroWeek
Economic Expert Warns About the Long-Term Fallout of State Intervention in Markets
| Source: Krull Corporation
WASHINGTON, DC--(Marketwire - January 11, 2009) - Alexander Mirtchev,
prominent Washington-based economic expert and global strategist, discussed
the international economic stabilization plans and steps to jump-start
faltering financial institutions in the emerging markets with EuroWeek, a
publication that covers the international capital markets.
In an exclusive interview granted to this influential professional
publication, Dr. Mirtchev explained that some of the rapidly expanding and
emerging market economies in the world are better-positioned than others to
deal with the pressures of the global credit crunch and economic downturn.
He believes that in China, India, Brazil, Russia and certain other markets,
the implementation of extensive fiscal stabilization tactics, combined with
recapitalization, extensive lending provisions and liberalization of
reserve requirements can yet insulate the leading banks from the negative
pressures of the global financial crisis.
As president and founder of Krull
Corporation, Dr. Mirtchev advised monetary officials of a number
growing and developing economies how to implement such measures to address
liquidity and solvency concerns and thereby avoid wholesale takeovers by
the state.
"In this current economic struggle, it is important that rapidly expanding
economies do not cut short the modernization drive and free market agenda
for improved productivity and competitiveness that will enable them to
compete in healthier economic times," Dr. Mirtchev told EuroWeek. He
considers that governments are better off not "addressing the banks'
functionality but simply helping them to pay their debts and to lend to
clients." Such measures should be "based on market principles so that
nobody is forced to cede equity to the State and the banks have the option
to buy back the shares sold to the government at any stage." He considers
that government support to the financial institutions in emerging markets
should not be a "free lunch," and, more importantly, avoid making the
government the one that "picks the winners and the losers" -- "the
shareholders and major investors in these banks should put up funds to save
the institutions as it is as much in their own interest as in the
government's," he said.
"Barring further major disturbances, the markets could react to this raft
of measures by rebounding around the middle of 2009, on the basis of rising
confidence. The extent of such a rebound would differ from sector to sector
-- the higher the confidence in the political will to make the tough
decisions necessary for supporting economic recovery, the better the
markets will react," Mirtchev indicated. He also stated that "Emerging
markets are subject to the same pressures as the rest of the world, but
they will react differently." For example, in the case of Kazakhstan, he
pointed out that a "stabilisation and growth package targeted to manage the
economy through this slow-down" has been put in place, but that "the
measures differed from those adopted by the US and the UK in that they
address the liquidity problems in the banks as well as work to stimulate
struggling parts of the country's economy."
Dr. Mirtchev is President of Krull Corp., a Washington-based consultancy.
He is also an independent director of Samruk-Kazyna National Welfare Fund
of Kazakhstan, and serves as senior economic adviser to the country's Prime
Minister.
To read the entire interview with Dr. Mirtchev in EuroWeek and
Mergermarket, visit www.euroweek.com and www.mergermarket.com.
About Krull Corporation:
Krull Corporation is a Washington,
D.C.-based advisory and project management firm with expertise in dealing
with economic growth, industrial expansion and restructuring issues.
Founded by Dr. Alexander Mirtchev in 1992, Krull Corporation capitalizes on his
extensive professional experience in market developments and reforms and
focuses primarily on emerging and transitional economies. Over the years,
the firm has provided its clients with outstanding strategic guidance and
professional services in various areas. Combining a unique blend of global
reach and understanding of local markets, Krull is able to consistently produce
high quality results and returns.