REEEC welcomes Dr. Paskal Zhelev, a visiting scholar from the University of National and World Economy in Sofia, Bulgaria. He received a Fulbright research grant to study at the University of Illinois through the fall semester. His research interests include industrial policy, international competitiveness, foreign trade relations, and European economic integration. He has published extensively on Bulgarian industrial competitiveness and the effects of Bulgaria’s European Union accession, and has participated in many state- and EU-funded research projects on related topics.
Dr. Zhelev received his Ph.D. in International Economic Relations at the University of National and World Economy in 2009. His thesis topic was “European Integration and Export Specialization (on the Example of Bulgaria’s Integration with the EU).” It assesses Bulgaria’s competitiveness in the European division of labor, and provides policy recommendations for the improvement of Bulgaria’s position. During his doctoral studies, he received an Erasmus grant and an Ernst Mach grant, which enabled him to study at the Faculty of Economics at the University of Warsaw and the European Institute at Vienna University of Economics and Business Administration, respectively.
He is currently a senior assistant professor at the University of National and World Economy, where he has been teaching since 2009. He has taught courses on “International Economics,” “European Integration,” “Contemporary Issues in the Global Economy,” and “Bulgaria in the Global Economy,” among others. Dr. Zhelev is a member of the Commission on Industrial Policy at the Bulgarian Industrial Capital Association, the Union of Economists in Bulgaria, and the Association of Lecturers in Economics and Management of Industry. He initiated the University of National and World Economy’s membership in the Virtual Institute of the United Nations Conference of Trade and Development, and serves as a core coordinator.
Dr. Zhelev’s Fulbright research topic is entitled “The Manufacturing Imperative: New Trends in the Industrial Policies of the USA and EU, and Implications for Bulgaria.” The project, which builds on the extensive research undertaken for his Ph.D. thesis, has been in development for over a year; it has already resulted in some publications, as well as new contacts with NGOs.
At the beginning of the 1990s, Bulgaria went from one economic extreme to another: from a heavily planned economy to a post-communist laissez-faire approach to economic development. The transition to a market economy proved to be a difficult process, particularly because it was accompanied by severe deindustrialization. Despite the extremely negative social and economic effects of deindustrialization, the Bulgarian government – adhering closely to the neoliberal prescriptions of the “Washington consensus” – did not develop any industrial policy to counteract this process in the first decade of transition. According to Dr. Zhelev, everything connected with state control of the economy was considered a regression to the old days. In addition to this taboo against government intervention, there are certain economic constraints associated with EU membership – for example, EU member states governments cannot set tariffs, or limit the outflow and inflow of capital and people. Furthermore, because we are now in the era of globalization, it is difficult or impossible to implement some of the successful industrial policies from the past (e.g. those of East Asian countries).
A major economic problem for Bulgaria is that the transition has led to a huge deterioration of the trade specialization of the country, which is still predominantly specialized in labor-intensive and raw material-intensive goods, rather than research-intensive goods. The discrepancy between Bulgaria and the more prosperous EU nations in terms of production and export structure is reflected in its comparatively low standard of living (measured in terms of GDP per capita). Despite the fact that Bulgaria began its European integration process in the 1990s and has been a full EU member since 2007 – which many believed would be the silver bullet – it is still by far the poorest country in the EU. Additionally, Bulgaria is in a demographic crisis: partly due to access to more affluent markets in the EU, the country has experienced a huge “brain drain” in recent years.
For Dr. Zhelev, the question is one of finding ways to strengthen Bulgaria’s economic position in the EU, and therefore – by improving Bulgaria’s international competitiveness – to improve the standard of living of the population. The ultimate objective of his project is to provide insights on industrial policies that could be implemented in Bulgaria for successful reindustrialization (and accordingly, economic growth). One of his goals is to undertake a comprehensive appraisal of the current trends in conducting industrial policies in the USA and the EU, and subsequently to find applications for Bulgaria. He believes that results based on research conducted in the United States (which has the world’s largest economy), particularly on a topic susceptible to ideological opposition, are more likely to be adopted by the Bulgarian government.
Matthew McWilliams is a REEES M.A. student and a FLAS Fellow for the 2015-16 academic year for the study of Russian.