M I O R I T A:
Romania in 1999

Catherine Lovatt

From deep within Romania, a dramatic and realistic 'film script' is being produced by unassuming authors - the Romanian people. Never to be shown on screen, the script is not written but experienced documenting history in the lives of Romanians themselves. The past year has produced a new chapter, a chapter of chaos and calm, character and charm, but most of all a chapter of change. Politically, socially and economically life has moved two steps forward and one step back, predicting a future of development within the constraints of a system in transition.

Over the past twelve months the Romanian government have achieved major steps forward. Entry into the European Union has been a priority. Discussions at Helsinki have initiated a programme in which Romania can achieve fast track entry if certain targets are met, for example, stamping out corruption and ethnic intolerance. Unfortunately, the targets are to be reached by the beginning of next year leaving little time for improvements in a financially stricken country.

Despite the obstacles of time and finance, the close of 1999 has seen the introduction of two controversial but necessary bills. The bill on property restitution enables former owners of property to reclaim their land if it had been "abusively confiscated" since 1945. If the property no longer exists a financial reward will be paid. The second bill is the law on education which aims to increase minority language teaching. The law allows technical and vocational education in Hungarian, the establishment of universities and faculties using minority languages and the creation of multicultural universities such as that in Craiova. It also allows Hungarian churches to establish private schools. However, the education law does not offer state financial support or permit the teaching of history and geography in any language other than Romanian. Both laws have their drawbacks but they do represent a serious move to achieve EU objectives which would entitle Romania to enter negotiations at the beginning of the year 2000.

Crucial political moves have been taken throughout the year, but the system is blighted by bureaucracy, corruption, political infighting and severe economic constraints which are holding the government back from making further changes. The general election, scheduled for next November, has created an atmosphere of confusion within the numerous political parties, all of whom are pressing for some grasp on power. The vast number of parties make it extremely difficult for one party to gain a majority vote. Consequently, alliances are being made and unmade. The outcome is chaos and uncertainty that is compromising the political decision-making process. Decisions are disrupted by infighting, squabbling and the lack of stable allegiances.

At present the general trend is to favour the opposition Party for Social Democracy in Romania (PDSR). Opinion polls show a 40% preference for the PDSR against 23% for the ruling coalition, the Democratic Convention (CD). Support for the PDSR is also reflected in public backing for the PDSR President, Ion Iliescu, to once again become president of Romania. Iliescu held power until 1996 when Emil Constantinescu convincingly won the presidential elections. At the time Iliescu was considered a "Communist leftover" and a step backwards to a regime of the past. Today, the tables are once again turning. Economic difficulties have resulted in dwindling support for the present government and it now seems unlikely that they will hold on until the November 2000 elections. Public protests, demands for increased pay and an end to job losses in all sectors of society have destabilised the government and have returned favour to a left-wing government and president. If this is achieved, many policies implemented over the last four years could be reversed, ending the drive for membership into Euro-Atlantic institutions.

The economic situation in Romania has both progressed and deteriorated during 1999. Amongst the positive moves, the IMF have finally guaranteed a stand-by loan for Romania of USD 547 million. Payment will be made in four tranches and are subject to satisfactory review. The first review, in September, was favourable. However, Romania has never successfully completed a stand-by programme and unless tight restrictions are maintained on financial policies it is unlikely that Romania will succeed. The programme is subject to strict conditional rules necessitating the reduction of the budget deficit to 4.1% of gross domestic product in 1999 as opposed to 5.7% in 1998, the continuation of privatisation, the improvement of the taxation system, a crack down on corruption and the allocation of funds to children's institutions.

Such strict controls are taking their toll on Romanian society and people are blaming the government for their falling living standards. The government have found themselves in a catch 22 situation. Demands are being made on them from the IMF, the World Bank, the EU and NATO to maintain strict economic control. Nonetheless, the Romanian people are pushing for higher wages and improved economic conditions. The Romanian government are caught in the middle.

Despite economic difficulties, it is evident that improvements are slowly coming. Although exports have fallen overall, exports to the demanding EU market fell by less than the total. In addition, exports to richer countries in Central and Eastern Europe - Poland, Hungary, Slovenia, the Czech Republic - actually rose by 27% (Economic Intelligence Unit Country Report: Romania, 4th quarter 1999). However, domestically inflation has soared, unemployment has risen from 237,900 in June 1998 to 1.12 million in June 1999 (EIU, Country Report: Romania, 4th quarter 1999), and real wages have fallen with rising inflation. It is these experiences that the Romanian people are feeling and objecting to and in the short term little improvement is likely.

It is easy to blame the government for economic difficulties. Lack of trust in a government to perform its duties and public opposition to that government undermines legitimacy and encourages political instability. A knock-on effect occurs: economic instability breeds political instability which results in greater public opposition, which, in turn, hinders political and economic development, and the cycle begins again. This means that the problem lies not only with a particular government but with the system itself and all the people within that system who comprise the nation. Consequently, economic and political transformation cannot occur without a change in mentality. This is occurring. However, as with political and economic change, social transition is slow.

Opposition to the present government and the worsening economic situation were further complicated by the Kosovan conflict. Romanian agreement to support NATO bombing had a detrimental effect on economic, political and social relations with their neighbour Serbia. Not only did Romania lose a valuable trading partner but the destruction of bridges across the Danube resulted in lost shipping and increased pollution. Nonetheless, the conflict did have a positive side for Romania despite disastrous environmental and economic results. In the long term it has opened the door for EU entry - a reward for NATO support - and provided greater demand for Romanian labour to help rebuild Yugoslavia. It also provided an incentive for the Balkans to unite and work together to prevent such a situation reoccurring through the implementation of a regional reconstruction plan: the stability pact. It is hoped that this plan will improve economic conditions within the Balkan countries furthering their chances to gain entry into the EU, improving relations with their neighbours and possibly removing the impression of the Balkans as a 'shatter zone'.

For Romania, 1999 has been a year of turmoil and hardship. Economic instability, political instability and civil unrest appear to have been the underlying factors behind the year. However, not everything is negative. Large steps have been made toward admission to the European Union, funding has been secured from the IMF and the Balkan Reconstruction Plan is driving Romania forward. But without stability the effects of developments are little felt and the government now find themselves facing collapse. This can only be detrimental to the state of the economy and for living standards. Despite some forward movement, a step back has also been taken, further delaying the process of transition.

Catherine Lovatt, 8 December 1999

Archive of Catherine Lovatt's articles on Romania and Moldova