News Release

Hopkins Economist Named Adviser in Bulgaria

Bulgaria is struggling through an economic crisis, facing hyperinflation of more than 1,000 percent following last year's 300 percent inflation. Hanke will advise Stoyanov on the exchange rate for the country's curency--the lev--and on the currency to which it should be linked. He then will help draft the law that will put into place a currency board, which then will serve as the framework for other economic reforms including massive privatization, price liberalization and a balanced budget. Hanke said all political parties in Bulgaria support the currency board system and that it can be put into place in weeks, or at the latest shortly after the April 19 national elections.

Called in Bulgaria "the father of the currency board," Hanke has been advocating currency board reform as an alternative to central banks for more than a decade. In 1991, he developed a blueprint for Argentina to return to a currency board system. Hanke said that the year before the currency board was enacted, Argentina labored under a hyperinflation rate of 2,315 percent a year. In 1996, Argentina's inflation rate was negative 0.3 percent, the lowest in the world.

Hanke also helped implement currency boards in Estonia (1992) and Lithuania (1994) with similar results: the 300 percent-plus inflation rate in both countries has been reduced to about 20 percent with a slow, steady drop, Hanke said.

Hanke's work as economic adviser to Zivko Pregl--vice president of Yugoslavia in 1990 and '91--culminated in the adoption of Article VII of the Dayton/Paris Treaty, initialed in November 1995, requiring that a currency board be established for Bosnia and Herzegovina.

Hanke also is on the steering committee of the G-7 Council in Washington, D.C., and is a fellow at the World Economic Forum in Geneva. His books include Alternative Monetary Regimes for Jamaica (1996), Currency Boards for Developing Countries (1994) and Russian Currency and Finance (1993). He also is a columnist for Forbes magazine.