Update: Developing Market Expert Says the Effect of Worldwide "Bailout Package" Would Not Be Identical for Rapidly Developing Economies
Development Fund Chairman Alexander Mirtchev Advises a Short-Term "Wait and See" Attitude While Expressing Confidence in the Relative Growth of Energy-Focused Economies
WASHINGTON, DC--(Marketwire - October 16, 2008) - Today, Dr. Alexander Mirtchev,
founder and chairman of the Krull
Corporation and an economic expert on emerging markets, expressed
uncertainty on the numerous bailout packages established by European
nations and the United States. Dr. Mirtchev is also the Chairman of
Kazakhstan's Sustainable Development Fund Kazyna.
"One effect of these bailouts that appears unclear is how they will affect
emerging markets, which are at present the source of highest economic
growth in the world," said Dr. Mirtchev. "Some emerging
markets that are essentially dollar-based economies -- Korea, Russia, etc.,
have a pronounced solvency-derived liquidity problem -- the local banks,
which dominate the market, do not have enough cash to maintain their
existing debt obligations, and there are no visible options for obtaining
additional external financing. Other emerging markets, such as Brazil,
Chile and Argentina, have a more cash-rich banking basis, and the dearth of
liquidity will not be so visibly felt for a much longer period -- in other
words, the period of economic slowdown in these countries could either be
prolonged or economic recovery would come much later."
Dr. Mirtchev cautioned:
"The key emerging market players should be concerned that the current
bailout formula, instituted by the U.S. and European governments (that
appears to institute a new "politically correct economic paradigm") will
give those governments that have been slow to institute market reforms in
their economies, a demonstration that they might not have been in the
wrong."
He added: "The bailout format that is rapidly becoming universal would
provide banks and institutions that should have died a natural death a
'stay of execution', thus irreversibly extending the downward pressure on
the local economies. It would lengthen unnecessarily any economic downturn
that these economies may be suffering due to the fact that the surviving
banks (or the governments, acting as banks) that hold bad assets will take
longer to divest themselves of those bad assets."
Dr. Mirtchev did express
confidence in the long-term stability of energy-rich economies such as
Kazakhstan, Russia, Bolivia, Mexico and others, subject to adherence to
market principles and steady political leadership. He asserted that with
the likelihood of increased debt by U.S. and European countries, investors
would look toward productive assets such as energy and other natural
resources. Dr. Mirtchev also made comments on the oil issue to Focus
Washington's Chuck Conconi, the interview can be viewed at
www.youtube.com/focuswashington.
For more information, visit www.KrullCorp.com.
About Krull Corporation
Krull Corporation is a Washington,
D.C.-based advisory and project management firm with expertise in dealing
with economic growth and industrial development 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
rapidly developing 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.
Contact Information: Contact:
Matt Lauer
Qorvis Communications