Padraic Fallon, chairman of Euromoney Institutional Investor, presented the 2002 finance minister of the year award to Bulgaria’s Milen Veltchev and the central bank governor of the year award to Australia’s Ian Macfarlane at the Omni Shoreham Hotel in Washington at the end of the annual IMF/World Bank meetings.
Veltchev, a former emerging debt markets investment banker, has restructured his country’s external finances through a quick-fire string of exchange deals through his first year in government, but still expressed surprise at winning the award. He told the reception: “Who would have thought a year ago that a Merrill Lynch banker would have been here getting the finance minister of the year award instead of testifying to Eliot Spitzer.”
Veltchev’s efforts have been substantial. His exchange deals have cut Bulgaria’s debt ratio from 75% of GDP to closer to 60% and eliminated half of the country’s Brady bond debt. Veltchev expressed appreciation of his colleagues in government and also offered “a special mention to our friends at the IMF who keep us on our toes”. He couldn’t resist one dig, though. Bulgaria, amid the global downturn, he pointed out, has succeeded in cutting its budget deficit to below 1% of GDP “when our friends in the EU are extending the deadline for balancing their books to 2006”.
Macfarlane also expressed himself flattered by Euromoney’s recognition “because Australia doesn’t get much”. He continued: “Maybe that’s because we’re a difficult country to characterize. We’re not G7 or G10, but nor are we an emerging market. We’re not part of Europe or Nafta, we’re part of Asia but unlike any other Asian economy.”
What’s in no doubt, though, is Australia’s strong economic performance in the past 10 years. Its 3.9% annual growth rate even outstrips America’s. Indeed only one OECD economy has done better, Ireland, which Macfarlane describes as an exceptional case. He also praised his colleagues in government in Australia for their brave policy decisions on liberalization, deregulation and privatization over the period. And he made his own contribution to the spirited debate about the process by which developing countries have been pressed by international financial institutions to adopt free-market Washington consensus policies. “We did all the things the textbooks say you should do,” says Macfarlane, “but we did them much more slowly than many enthusiasts recommended. We did it all in a very pragmatic way.”
