Cranky clouds settle in over the magnificent Alexander Nevsky Cathedral in Sofia, Bulgaria. Perhaps they are cranky because of the overwhelming potential of a nation often stifled by political warring. Recently, while in Sofia, I learned about a run on the banks in 2014. It was caused by a personal feud between oligarchs - Mr. Vassilev, Corpbank’s largest shareholder and point of power, and Mr. Peevski, a politician and media mogul.
According to the NY Times, their 2014 fight appeared to escalate with Peevski transferring swathes of money from Vassilev’s bank to FIBank. Vassilev retaliated by spreading rumors about FIBank. As a result, people raced to ATM’s to avoid losing their hard-earned money, as many did when the Bulgarian banking system collapsed in 1996. Thankfully, European and Bulgarian leaders managed the crisis swiftly. But, power rifts continued and the government shut down Corpbank’s operation altogether, leaving Vassilev weakened. A 2015 Forbes article provides another angle on the fighting with a quote from Vassilev. “Peevski is simply one of the main tools that the Bulgarian political mafia uses to blackmail Bulgarian businesses – the visible part of a rather large iceberg of corruption.”
Issues like these certainly do not help reverse Bulgaria’s brain drain problem, which is devastating Bulgaria’s economic potential. According to the Swiss-based IMD World Competitiveness Center, Bulgaria ranks dead last out of countries examined in its ability to handle the loss of top talent. Furthermore, a portion of the outflow is would-be entrepreneurs who could invigorate the economy and heighten a sense of opportunism. But, you can’t blame them for leaving. On the Global Entrepreneurship Index, which measures the health of a country’s entrepreneurship ecosystem, Bulgaria scores a 28.4 out of 100, near the scores of Iran and Ukraine.
All of this adds up to a big loss for people around the country. As the African proverb says, ‘When two elephants fight, it is the grass that suffers most.’ In Bulgaria, when oligarchs fight, citizens get trampled. In the coming years, maybe the oligarchs can clean things up. If they could get along, avoid corruption and develop a trustworthy ecosystem, then surely their basilica will see the brightness of the sun like never before (although maybe that won’t make for as striking of a photo).