From: kai@unix.cie.rpi.edu (Kai Yang)
Subject: Re: Corruption Problem in Romania
Organization: CIE, Rensselaer Polytechnic Institute, Troy, NY
Date: Sun, 22 Nov 1992 04:42:31 GMT

In article <qnz1-__@rpi.edu> kai@unix.cie.rpi.edu (Kai Yang) writes:
>
>I would appreciate if someone can give a discussion and analysis of
>this subject from this newsgroup in the following aspects: 
>
>1. The historical, social, and cultural origins of the corruption problem.
>   Is it the results of the Ottoman rule in the history (a Romanian friend
>   told me so.)? 
>   Is it the results of the communist regime (I have seen less corrupted
>   communist and capitalist countries.)?
>   or, is it because of the living standard difference between Romania
>   and western countries? 
>
>   
>2. Are there any possible measures that can  be taken so that corruption
>   can be suppressed to a controllable level? Or, simply, it is an
>   unsolvable  problem.


The success of Romanian economic reform does depend on who (former
communists or non-former-communists) take power in Romania since they
are democratically elected and committed to privatization. The only
difference between these parties are what kind of pace should be taken
in the economic reform. In fact, no economists can give an exact
answer of what speed is appropriate.  Russian leaders take American
economists' advises and use so called "shock therapy" to treat their
ailing economy, which leads to a 1000% inflation.  I am not sure yet
whether the patient will die or become healthier after the "shock".
The reform pace should only be the results of compromise between
different interest groups (class) in the society. Economic reform, in
a large sens, at least at its beginning, is a re-distribution of
social wealth. Before the reform results in more social wealth, some
people will gain and some people will lose from the re-distribution (A
Romanian friend told me his mother is laid off from her job and
another friend told me he made a fortune.).  If the amount of loss for
a group of people exceed their maximum tolerance level, social turmoil
is ahead. Coal miner strike in Romania probably was an example. Social
turmoil is the number one enemy of any economic success. I am happy to
see that Romania has been calm for quite a long time.

I believe that the corruption problem which are deeply rooted in
Romanian society will constitute a major threat to the success of
Romanian economic reform.  As privatization process goes on and
government role decreases in the country's economy, many people
believe corruption problem will be gradually solved.  But, it is not
necessarily always true. Look at South America (most of them have
capitalist system), the societies are extremely corrupted and
polarized. Although South American countries have rich resource in
coffee that westerners can not live without, oil and minerals such as
iron ore in Brazilia, their exports are just about enough to pay the
interest of their foreign debt that is in order of hundreds of billion
dollars. I am glad to acknowledge that Romania has a very low foreign
debt compare to its neighbor countries ("Thanks" to Ceausescu's
austerity policy in the 80's.). Of course, it is unlikely that the
situation in Romania will become that bad because Romanian people are
much better educated and its geographical position is also not bad. A
common character of a corrupted society is that everybody hates
corruption and everybody participates himself in the corrupted
activity. This is a perfect example of the duality (good and bad) of
human nature. The discontent about corruption can cause social
turmoil. An example is Chinese student movement in Tiananmen Square in
1989, which leads to the death of hundred people. China's economic
reform which started in the end of 70's results in a increasingly
serious corruption problem in the 80's. Perhaps, because the Chinese
communist had some achievement in their economic reform and the
society did not corrupted to an un-curable degree, Chinese communist
government still had sufficient power to suppress the student
movement. (The situation was completely different in Romanian
revolution in December of 1989.) The Tiananmen event forced Chinese
government to treat corruption problem more seriously, but it also
caused China's economy to slow down for nearly two years.

Apparently, Romania's reform will rely more on themselves than its
neighbor countries' reform. Western support for Romania's reform is
significantly less than that for its neighbor countries. You don't
need to look at other statistics, but just look at the length of
paragraph about Romania in the articles regarding Eastern Europe
reform in Times and Newsweek magazines. I am often dispointed by the
reporter's unfair attitude. The paragraph about Romania is almost
always shorter than that for Hungary, Poland, and Czechoslovakia,
although Romanian population is about Hungary and Czechoslovakia
combined. Is that because Romania is less developed than its
neighbors? Probably yes, but not much. An explanation is that the
traditional links between Romania and Western countries are weaker. I
looked at statistics of numbers of immigrants from different country to
the United States in the history and found Romanian immigrants are
substantially less than immigrants from other Eastern European
countries. I have heard that there were quite a number of Romanians
came to America in the beginning of this century, but they went back
after they made some money. This statistics probably is also an
explanation of why US Congress did not grant Most Favorite Nation
status to Romania (I have only heard two explanations in this
newsgroup, former-communist government and importance of Romanian
economy to US.). In a democratic country, having a large supporter in
constituents is of prime importance for any laws to be passed. I don't
know how aggressively and effectively Romanian government tried to
lobby U.S. Congress for the MFN status. Did Romanian government
motivate Romanian descendant in the US to give their congressmen or
senators a call? Don't worry about that there are not too many
Romanian "traditional" goods can be sold in the U.S.(I saw such a
statement in this newsgroup) now. If many Asian countries, which do
not necessarily have better industrial infrastructures than Romania,
can have huge trade surplus with US, Why Romanian can not? The reason
why Romania can not have too many thing for export now is probably
because of the consequence of Ceausescu's "self-reliance" and
"independence" policy. During the time I was there, instead of focusing
on some internationally competitive (either labor-intensive or
technology-intensive) products, Romania almost produced everything,
from helicopters, televisions, cameras to electronic watches. These
wide spectrum of products made Romanian people proud of themselves and
are often hailed as the results of the great leadership of their
dictator. The quality of these products were generally poor by
international standard and not competitive in price either. No wonder
many factories have to close the door once Romanian market is open. A
lesson is that trying to produce every thing will result in produce
nothing eventually.  Ceausescu liked monumental engineering, as most
dictators did in the history. He wasted a large amount resource and
manpower to dig a large canal which was not in urgent need. On the
other hand, Romanian industry was also extremely disproportionate.
Although Romania can produce averagely over half ton steel per person,
I had never seen any color printing with good quality there. By the
way, if the situation is still the same, I bet you will make a fortune
if you going to run a color printing factory there. Color printing is
very crucial to the packaging of products, which can greatly improve
salability. America market has a wide spectrum because of wide
spectrum of incomes here, so almost anything can be sold in US as long
as the price is competitive. Bring as much business information as
possible when you go back to visit Romania since not too many Romanian
people can come here.  Many countries have become rich rapidly by
exporting goods to US. By the way, how about Dacia in US market? Has
Dacia withdrawn from US market completely? Dacia is not necessarily a
worse car than Yugo. Maybe Dacia should take the opportunity of
Yugoslavia's civil war and launch a more aggressive campaign to
substitute Yugo. Romania certainly has some advantages. The education
there is quite good, especially up to the high school level (liceu).
At least, its pre-college education is much better than in America.
 
  Finally, as I have been noted from this newsgroup, the relation
between ethnic Hungarian and Romanian has been becoming increasingly
tense. This is a toughest problem. When talk about racial and ethnic
problems, I am always not optimistic. During the time I was in
Romania, many of my Hungarian (Magyar) friends complain Romanians,
similarly, many of my Romanian friends also complain about Magyar. Of
course, most of these complains are full of prejustice. It is almost a
truth that prejustice coexists with difference. As long as a group of
people can be identified as Romanian and the other group of people can
be identified as Magyar, the prejustice can not be eliminated,
especially when there is an interest conflict, territorial dispute,
and unpresent history (Austrian-Hungarian empire ruled a part of
Romania).  Can a war erupt between ethnic Romanian and ethnic
Hungarian, like what happened in Yugoslavia of former Soviet? Probably
not. This is because the population of ethnic Hungarian is only about
10% of total Romanian population. It is not enough to form a
confrontational force.  Besides, Romanian and Magyar live mixedly in
most cities. Hungary probably are not willing to be too supportive for
ethnic Hungarian in Romania and risk a potential war with Romania.
Once such a war erupts, it will be considered as inter-state
(regional?) war and not civil war. So world powers, especially
European powers will intervene more quickly. Anyway, I am convinced
that the relation between ethnic Hungarian and Ethnic Romanian will
not become any better than the relation between English-speaking
people in Canada and French-speaking people in Quebec. Did you notice
the recent referendum about Canadian new constitution?
 
   Well, I have written enough. I am sorry to waste your time in
reading this naive outsider's (I am a quarter of Romanian if count by
residence time) article. I promise I will stop posting any article in
this newsgroup. 

Best wishes and regards to all Romanians (who do not steal and rob :-)).
 
La revedere. 




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