Romania: Another Victim of Neo-liberal Capitalism

Romanian President Traian Basescu accepted the resignation of Prime Minister Emil Boc, heading a center –right coalition on Monday, 6 February following massive street protests for weeks, first such ones after the fall of Communist leader Nikolai Ceausescu 22 years ago. Boc joins a list of European leaders felled by public fury at massive spending cuts introduced at IMF‘s behest, as part of neo-liberal reforms medicine. The IMF had rescued Romania’s state finances in 2009 with a 20 billion-euro ($26-billion) loan on condition of deep cuts in government spending.

Mihai-Razvan Ungureanu, former foreign minister and foreign intelligence service chief will form the new government. Ungureanu's statement that he will continue the unpopular economic reforms will do little to calm popular anger and unrest. The people are distrustful of intelligence chiefs as it reminds them of Ceausescu’s dreaded Securitate (secret police). But as elsewhere in Communist countries say Vladimir Putin in Russia, the security services attracted the best brains and after the collapse of the communism, being well placed in the corridors of powers, most former spooks have done well and even flourished, except a few at the very top who were toppled.
In spite of enough petroleum, gas, water and land and other resources, the loot under the Washington led policy of neoliberal capitalism has transformed Romania into the second poorest country in Europe Union (EU)  

Finally the truth is coming out, the suffering masses have risen against neo-liberal capitalism enforced under US domination in Romania as they have elsewhere, across north Africa, the Middle East, except perhaps in Gulf Cooperation Council led by Saudi Arabia and egged on by Qatar two feudal kingdoms like others in GCC promoting democracy in Syria after having bloodily implanted it in Libya, with western energy and other interests taking over the resources. How about some freedoms and democracy in Saudi Arabia and Qatar.

The author who was ambassador at Bucharest in 1981-84, then entering a most difficult phase, spent nearly10 years (1997-2007) as an independent freelance journalist in Romania under the spreading wings of neoliberal capitalism, a Wall Street and the City, London gift to humanity. Soon after reaching Bucharest, an old grizzled Romanian engineer told the author that financiers were taking over the country and soon everyone will be indebted and spend the rest of lives in repaying the loans, which really benefitted the corrupt ruling class.

Strategically located on the Black Sea, Romania is a large country with a population of 23 million in the region, where population of most of its neighbors is less than 10 million. Its military importance was brought home when US war planes used Romania’s airport near Constanza and other facilities after March, 2003 after NATO ally Turkey’s parliament turned down US request for use of its land bases and airports to attack Iraq. There have been reports of Romania having allowed use of its military and other facilities for US rendition for torture.

Romanians, who consider themselves as Latin people in Slav lake were never happy being part of the mostly Slav Communist block and followed an independent line in foreign affairs, somewhat like de Gaulle’s policies in Western block. After the breakup of the Soviet Union and Communist bloc, Romania assiduously cultivated Europe for entry into Europe Union (EU) and USA for NATO membership. The latter efforts bore fruit in November 2002 when its admission into NATO was approved at the Prague summit in spite of many institutional deficiencies. 

For whatever the strategic configurations in Eurasia between USA, Europe Union, Russia, Caucasus &Central Asia and now destabilized Middle East, Romania will remain an important strategic asset. Its vast rail and road network linking it to central and Western Europe and the seaport of Constanza on western shores of the Black Sea would provide a commercial hub across the Black Sea for Europe Union’s export to energy rich countries like Azerbaijan, Kazakhstan, and Turkmenistan after oil and gas starts flowing out the Caspian Basin. But following US policies blindly and its total dislike of the Russians has stopped Romania from benefitting, say in the transport of energy from central Asia, Caspian region and Iran to Europe.

The Romanian leadership was very exultant when joining NATO. "It would be a new beginning," said Romanian President Ion Iliescu. It will allow Romania "to be integrated into the civilized world, and to receive necessary support for internal reform." Indeed, many Romanians saw entry into NATO almost as a divine gift that will transform the country after a decade of post-communist bungling and looting by its politicians. 

The Legend of Dracula 

For centuries, Romania was ruled by the Ottoman Turks, and Romanian Prince Vlad Tepes, the Impaler, on whom the Dracula myth is based learnt some of his blood-curdling tactics when he was held as a hostage in the Ottoman capital Istanbul in the late 1400s. Tepesis a great national hero. The Romanians in general dislike the Russians, and have little love for other Slavs too. Lying in the path of marauding hordes and armies from the Eurasian steppes and elsewhere throughout its history, it possesses an ethnic mix of a richness and beauty that few other countries can match. 

Romanians claim that they are a Latin island in a Slav lake, with their cultural moorings in France. Two millennia ago, for two centuries, Roman legions were garrisoned here; some were from Catalonia in Spain and even Palestine.Their mixing with the local Dacian people gave the Romanian language its Latin character - in fact it is quite close to Italian, and even the Catalan dialect.

If Romania is described as a part of the Balkans, Romanians demur: "We are north of the Danube River, and entirely European," as Traian Basescu, a former mayor of Bucharest, then said. And they were reluctant communists. The system was forced on them by the invading Soviet army after World War II. Many Romanians confided to the author in the early 1980s that they wished that they had been liberated from the Nazis by the Americans, and not by the Soviet Russians. 

Romania is fortunately self-sufficient in oil and gas, unlike its neighbors. It has rich agriculture land and was known as the "bread basket" of the Balkans. But now only 60 percent of the land is cultivated and land ownership laws are not clear or fully implemented; nor has land been distributed, with collective farm mangers from the past still making hay. Except for the summer months when vegetables and fruits sprout from the rich fertile soil, beans, tomatoes, cucumbers and other simple fruits and vegetables are imported from Holland, Greece, Turkey, Spain and Italy. If state farms could be leased to agriculture and horticulture entrepreneurs from Turkey, Israel or India, Romania could not only feed itself, it could flood Europe with its fruit, vegetables and flowers. 

The massive tourist infrastructure built by Ceausescu has been eroded, dismantled and destroyed over the past decade. In the absence of maintenance, hotels parceled among cronies have fallen apart, but room rates are on a par with West Europe. This discourages businessmen and keeps tourists away from Romania’s legendary fresco-painted churches and monasteries, scenic sights, Black Sea beaches and winter holiday resorts. Before being admitted in 2007 in to EU conditionally (along with Bulgaria), mafias from neighboring countries like Greece, Italy, Turkey had infiltrated the country’s economic and political life. Despite making some progress in fighting corruption and organized crime, both Romania and Bulgaria have been severely criticized in by EU over a catalog of failings, which could delay the two nations from joining Europe’s passport-free Schengen travel zone. The objections are only to semiskilled and unskilled labor, not to their doctors and engineers.

After the collapse of Communism in end 1990, the hapless masses were required to transform themselves into free marketers, entrepreneurs and agriculturists, a herculean task for those where the state controlled everything. Before the masses could learn even the ABC, they were thrown at the mercies of Mafias and corporate. Then big cooperates like Metro, Carrefour etc. were allowed in 2006, the small shop keepers and retailers were stopped in their tracks and had to close shop.

Neo-Liberal Attempts in India for SDI in Retail must be Resisted and Stopped.

The western retailer’s chains were not interested in promoting agriculture in Romania and had earlier closed its fine textiles manufacturing and readymade export business, creating misery and unemployment all around. The consumer is happy to begin with, buying vegetables imported in winter from Holland, Spain, Turkey, Syria and even Jordan. After monopoly control, the consumers feel the pain too, like the local producers. But it is too late. 

Ceausescu; the most influential leader in Romanian history; Soros Poll 2007

A Soros Public Opinion Barometer made public in end 2007 showed that Romanians put Nicolai Ceausescu as the most influential leader in Romanian history ahead of post Ceausescu era leaders like presidents Basescu and Ion Iliescu, as well as Kings Carol I and Mihai I and others. Although after capture of Ceausescu and their Kangaroo Court trial and murder, the authorities did not disclose the place (in Bucharest where he is buried) but poor and misery laden people have traced it and regularly place flowers and candles at the supposed tombs of the Ceausescu couple.

After a year’s stay in Bucharest in end 1998, I had written the article below on Romania under capitalism and globalization, the buzz words then.  


Romanians’ American Dream Comes Unstuck:
Transition in Post- Ceausescu Romania   

(Published slightly edited by Khaleej Times as Romania’s Capitalist Dream Turns into Nightmare 3 January, 1999)            

Like Count Dracula, if Romanian dictator Nikolai Ceausescu could rise from the dead, he would not complain about his comrades executing him after a sham trial. He would understand that, but letting US and Capitalist symbols pollute Romania, known as Dacia in ancient days, for even under communism, recourse to its national past and a Foreign policy diverging from Communist block provided acceptance and the underpinning for his regime. The symbols of victorious power, glittering neon lights of Coca Cola. KGC, MacDonald’s, and even Sony and Daewoo would have hastened his return to the nether world. 

Western media led by Radio Liberty and Free Europe during the Cold War had convinced most Romanians that they were the lost Christian brothers whom West wanted to liberate from the tyrannical and atheist communist regime. Those who could go to the West returned with glowing stories of freedom and of shops full of undreamt goodies. To counteract this, when his regime televised a Hollywood soap opera to highlight Western decadence, Romanians instead took it that once they had democracy and capitalism everyone would live in luxury with only board-room and bedroom battles to take care off and life would be a round of night clubs, casino bars, soda fountains and bowling alleys. But the reality has turned out to be very bitter, harsh and brutal leaving them confused and disoriented, selfish and even unfriendly. 

It was preached and fervently hoped that market driven economy will usher in unlimited prosperity. Yes, for 5/6 % of the population, (who live as in European Union and think Euro-currency); wheeler dealers and unscrupulous smart Alecs, most entrenched in power since Communist era, exploiting old party networks and newly elected ones. But for the majority, victims of a free fall of 40/% in GDP since 1990, life is a dreary unmitigated misery with falling employment, rising inflation .Pensions of retired professors military officers, engineers have been reduced to $50 per month while prices are at par with West Europe. Yes, the shops are full of imported goods but, only to watch for the majority. And the country is now aglitter with symbols of victorious superpower and its ideology instead of huge wall sized posters of a youthful looking Nicolai Ceausescu staring at you. Romanians can have passports for the asking but get no visas. They are unwanted in West and if they do reach there are promptly deported back. An industrialized Romania is fast getting Africanized into an exporter of semi-finished goods. Social engineering in reverse has reduced a socialist middle class and intellectual elite to penury and starvation. Yes, there is a democratic constitution, multiparty system, liberal and global economy.

Being the most Stalinist regime with an omnipresent Securitize force (most still in place. A health Minister, an ex-Securitate informer, was made to resign) no dissent or alternate leadership emerged as in Poland, Czechoslovakia or Hungary. So the same old nomenclature controls the levers of power .State enterprises are run as personal fiefs as in the past. Barring transfer of flats to tenants (more than 80% of population lives in flats built during Ceausescu era) for nominal sums to win the elections, until end 1996, under President Iliescu there was not even a pretense of reforms. So there is little change in old economic structures. There is a ‘dog in the manger’ policy. Incapable of handling complex business and industrial activity they would not let others in. Foreigners want to buy it cheap, perhaps sometimes true, but the cash gobbling inefficiently run enterprises with massive current account deficits are corroding the entrails of national economy while apparatchiks are eating into national wealth and undermining future prosperity.

Except for those from foreign trade ministry and state export enterprises the rest had no idea at all of how to trade, run a business or industry. So they are learning by doing - the hard way. Many set up rows after rows of snack shops, Casino bars and kiosks selling the same soft drinks, beer and hard liquors with fancy names like Sheriffs, Texas, Hollywood, Bingo Pall-mall or Chez Gabi. But unlike Hollywood serials there are few customers. Many which had opened with great fanfare and glittering facades have downed shutters. Now deserted and abandoned along with silent and rusting industries they have become symbols of the vanquished in the Cold War. And living examples of Romanians’ American dream come unstuck. 

Since last two years the so called reform coalitions are perpetually squabbling in and out of Parliament, fighting for jobs for their cronies (govt servants can be party members) Barring few, professors like President Constantinescu and others who are hapless and ineffective, others have joined in the privatization of public assets into their own names or their friends and relatives with everyone looking for a fast buck. There is little transparency in privatization or elsewhere leading to unfair practices. With insider trading the stock exchange has become moribund. Even in acute economic austerity, a minister wanted to order Bell Helicopters for $ 2 Billion, even embarrassing USA .When accused of kickbacks he fished out the draft contract on TV showing that it did not include any commission clause. President’s own Security chief was involved in large scale systematic smuggling of aircrafts full of contra-band cigarettes through a military airport. A well-meaning President and Prime Minister, another professor, unable to comprehend, lacking the will or resolution prefers travelling abroad to avoid facing problems at home... 

There is little regulation and rule of law. The swindling of life savings of millions in get rich quick pyramid scheme in Club up North with the regime’s connivance if not participation are living examples. But lotteries still do a thriving business. Mafias attracted from Italy, Greece, and Turkey and elsewhere have linked up with officials and are spreading its tentacles. Little has been done to establish property laws, banking regulations or stock market, a necessity for the Milton and system of laissez faire. The banks are being used to enrich the politicians and their cronies. Visas are difficult even for businessmen because some Romanian diplomats trade in them. The first interface for visitors and tourists are the taxi drivers of Bucharest, always ready to make a killing, Reasonable cabbies charge only four times, many extorting$100 from the airport for a $10 trip. And there is no recourse or law the establishment seems to imply OK you wanted freedom, democracy and capitalism. You have it.  

Romania started with many natural and built in advantages to soften the pains of transition to market economy. It has a strategic location on Black Sea for NATO and as crossroads for trade between energy rich Caspian countries and Europe. Almost self-sufficient in oil and gas unlike its neighbors, Romania has rich agriculture land and was known as the “bread basket’ of the Balkans. But now only 60% of the land is cultivated. Land ownership laws have not been passed nor land distributed with collective farm mangers from the past making hay. Romanian wheat is more expansive than from neighboring Hungary. Except for a few summer months when some vegetables and fruits sprout from rich fertile soil, year round even beans, tomatoes, cucumbers and other simple fruits and vegetables are imported from Holland, Greece, Turkey, Spain, or Italy. 

The massive tourist infrastructure built by Ceausescu is being eroded, dismantled and destroyed fast. In the absence of maintenance, hotels parceled among cronies, are falling apart but rents are at par with West Europe which discourages businessmen and keeps tourists away from Romania’s legendary fresco painted churches and monasteries, scenic sights, Black Sea beaches and winter holiday resorts. And now with economies collapsing in ASEAN, Russia and elsewhere, investors are wary of investing anywhere, more so in Romania. Still in spite of many problems, because of big market of 23 million and hopes to join NATO and EU, it offers good opportunities for investors. Imports from the Gulf, are on the increase with many Iranians and Arabs doing retail business. There are over two hundred thousand Muslims mostly of Tatar and Turkish origin, whose freedoms were more or less suppressed during the Communist era. But they are now much freer to worship and getting organized .So are the Gypsies, who were persecuted earlier. With their inborn flair for trade they are doing exceedingly well in marketing of flowers, vegetables and fruits. But there is a growing emergence of racism against Arabs and Asians and anti-Semitism, for the latter Romania was known even in the past but it had been kept in check under communism.  

Unfortunately the most devastating development with long-term consequences is the precipiticious fall in educational standards. Romania was rightly proud of its exacting high standards in technical and medical education and tens of thousands mostly from Arab countries but even from the West and USA used to study in its polytechnics and universities. But shrinking budgets for education leave little money for labs or books with Professor’s salaries declining to $100 per month. Life is a struggle and there is little teaching. Instead teachers try to earn money otherwise and elsewhere neglecting their duties. So the new engineering and medical graduates might be literate but will be uneducated. Similarly health and culture, with a very high reputation in music, ballet and theater, have also suffered. With no role models and no discipline or regulation, the young have taken to enjoying themselves. More than 60% failed their high school examinations. Tall, slim and beautiful, some stunningly so, a result of multiethnic mixture, the new generation presents a pleasing sight; the effervescence of sheer youth, joie de vivre bubbling up after decades of communist uniformity and drabness. If anyone wanted, like in Venezuela, one beauty Queen after another could be chiseled out year after year.

Indo Romanian Relations  

Traditionally Romanians have been fascinated by India, its history, culture, religion and spirituality. Over centuries thousands of Indian classics or books on India have been translated. Rabindranath Tagore, who visited Romania in 1926, is a household name. Sanskrit has been taught at Universities since last century. Poets and intellectuals like M. Eminescu, M. Eliade and S.Al-George have brought Indian philosophy, religion, art, history and poetry to Romania and acted as interpreters to the West. The Indian Embassy has done a splendid job in keeping the flame of Indian culture alive by holding seminars, exhibitions, publication of books with a bust of Tagore having been recently unveiled at the prestigious National Theater.

But the new generation is Western consumer oriented. The story of Dr. Amita Bose, who had taught Sanskrit, Bengali and Indian culture in Bucharest for twenty years is a tragic example. In the new era she was confident and enthusiastic to do even more, but the authorities under the spoils system dismissed her without much ado and appointed instead one of her own but inadequate pupils. Heartbroken, Dr. Bose died soon after, unwanted in her country of adoption and unsung in India, whose cultural ambassador she had become. But she has left behind thousands of students, many still pursuing Sanskrit studies and Indian philosophy.  But one wonders if some who after a few years of Sanskrit and philosophy translate Gaeta and other India classics into Romanian do it for love or to earn publishers royalties. 

India always had a strong economic relationship with Romania, which helped her in oil and refining industry in 1950s. Romania was a major buyer of iron ore and supplier of urea, chemicals and steel products. Inspire of many problems, because of its location, a big market of 23 million and a candidate for NATO and EU, it offers good opportunities to Indians to invest in pulp and paper, pharmaceuticals, furniture, textiles, steel, petrochemicals and fertilizers (with 30 million tons of refining capacity). Currently India is a major buyer of Romanian products which at US$ 177 million in 1996 ($239million in 95), were more than its combined exports to China, Japan and Korea or total exports to Latin America. But there are unnecessary hurdles in grant of visas to Indian businessmen, simply because some Romanian diplomats were trading in visas in its missions in Amman and Bonn etc. During Ceausescu era Romania always supported India on Kashmir but now it takes an equivocal stand, not on merits but perhaps to please USA, while it badly treats its own Hungarian minority in Transylvania, even objecting to setting up a Hungarian language university.

While it took communism 50 years to discredit itself (and 80 years in Russia) unbridled capitalism let loose on hapless and unprepared populace has done so here in 8years only, which could make capitalism the most tortuous and hardest path from Communism to authoritarianism or worse. Romanians continue to suffer as they have done throughout history, ever obedient to the powerful. The youth who had sparked the 1989 December spontaneous revolution, stolen by the older nomenclature, have lost faith and become disheartened. Not that people want communism back, but there is nostalgia for Ceausescu among the elderly who miss the social equality and security system; almost free medical aid, subsidized food and housing.  Regrettably the Capitalist world glorying in the defeat of Communism has proved to be very short sighted and has been hypnotized by its own propaganda of the victory and efficacy of Capitalism.

Of course unlike after the WWII there was no alternative political and economic system to frighten the USA and thus there was no Marshal Plan. (And the money? considering the cost in East Germany alone!)  Also it is doubtful if it would have succeeded everywhere in the absence of a receptive economic soil. (How money seeped out from Russia) It takes a generation and more to establish respect and obedience for laws on property, commerce, banking, stock exchange and to have the requisite economic institutions and infrastructure in place. With the very concept of capitalism as panacea for all being questioned now, even in the West, because of its collapse even after its prescriptions were followed under IMF tutelage in South East Asia for decades and its being in trouble even in Korea, Japan, Brazil, it could only further strengthen the suffocating control of the old guard in Romania and elsewhere taking a cue from Prime Ministers Mahathir, Primakov and others. While Bill Clinton and Parrot quibble about a few thousand jobs in election debates, West expects reformers or former Communists turned ‘democrats and free marketers‘ to let millions down the poverty line-only a dip in the prosperity curve drawn by Business school  shock therapists - and get re-elected democratically. It is not an easy dilemma for most former communist’s states. The least the West ought to have done and can still do is to organize and implement a massive’ Marshal Plan ‘for training and retraining of managerial cadres.   


More by :  K. Gajendra Singh

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