Two things Romania should no longer bear: Procrastination and Forbearance
April 14, 2014
Romania still has to produce sufficient evidence that it’s attractive enough. And it has to do that not only by pointing out that it’s the lesser of the regional evils, but by truly becoming more competitive.
Spring is a great time to look ahead as it’s naturally the time of the year when everything comes back to life. It’s a time of hope, perceived as such by nearly all living creatures, economists, analysts, fortune-tellers and (even) politicians alike. It’s that time of the year when people, almost done with their higher heating and electricity bills, start daring to hope that things may actually get better. In order to dare hope for more a few of us also look back in order to understand how they should be moving ahead.
Looking at Romania from a regional perspective at a time of such turmoil in a number of neighboring countries, 2014 could again look like it shall be loaded with opportunities. But that’s how it also looked last year and during each and every spring at least shortly before the country joined the EU, in 2007.
A similar feeling goes about its southern neighbor, Bulgaria. In fact, both countries should, under normal circumstances, be perceived by foreign investors as safe havens in southeastern Europe. Both are EU members, both are NATO members and both are more investor-friendly than the troubled Ukraine, the more expensive and tricky Hungary or the less predictable countries of former Yugoslavia, which could represent the other investment destinations.
Yet, neither Romania nor Bulgaria seem able to make a huge difference from the previous years, especially in the aftermath of the financial crisis. Governments in both countries have drowned into some sort of procrastination. Their citizens and entrepreneurs are fighting hard to get rid of a state of mind partially resembling the typical forms of forbearance, reminding of the planned economy, when regardless of what one would have attempted, the system (government) would have resisted and rejected any initiatives even without looking at them. The feeling these days is that if there’s any dialog taking place, both contenders are partially deaf.
In Romania, the larger of the two economies, politics are worse than expected and the cracks between the government and the civil and entrepreneurial society are widening. The government seems incapable to deal with important issues such as greater absorption of EU funding, more efficient tax collection, new infrastructure projects or better investment incentives, while investors are worried about the lack of predictability and accountability. On top of all these, investors already trapped in Romania seem unable to make their voices heard loud enough.
Under such circumstances, Romania still has to produce sufficient evidence that it’s attractive enough. And it has to do that not only by pointing out that it’s the lesser of the regional evils, but by truly becoming more competitive. It has to continue cracking down on red tape and corruption and help investors believe in the market place regardless of what government is in place. Romania can no longer afford not being predictable enough. It can’t play with taxation levels in the next decade and it must refrain from arbitrary measures that would dent its credibility or attractiveness.
There are large pools of money still avoiding Romania precisely for reasons that have to do with a lack of transparency, accountability and due diligence. The many large banks that opened subsidiaries in Romania in the past 10-15 years are somehow stuck in the current business environment, where companies lose money and cannot seek financing and individual clients are too weak financially to qualify borrowing money.
The vicious circle that Romania finds itself in has to break and the change can only come from the authorities’ side. The time of procrastination has to come to an end and great projects must be started in a transparent manner or there shall be an even greater drop in living standards and nothing to make a difference anymore. The ingredients are all there, we seem to lack the will of moving things in the right direction and with the right speed.
Romania needs a legislature or two of politicians willing to think more at the country’s future and even at their children’s future rather than at their immediate interest. While it could sound almost impossible in nowadays Romania, there are politicians who have started to realize that there won’t be much left to do if nothing is done now. Entrepreneurs and citizens alike should therefore be pulling out of their forbearing state of mind and encourage precisely those politicians; otherwise no one else shall ever be able help us make a real difference.
The opinions expressed in this article belong to the writer and do not involve, in any way, any institution, economic interest, political orientation or solicitation.