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Addicted to bribes: Romanians can't say no to graft

Two decades ago Communism collapsed because of its economic failures, with a bankrupt centralised state propped up by a thriving black market

December 2009 - From the Print Edition

In Romania in the 1980s, its people embraced this underground economy as a necessary evil to ensure survival, but now Romania risks repeating this error due to its tolerance of white collar crime.
This year there was a chance for the state to arrest this issue head-on. Attempts were made to bring more businesses out of the grey market - a final version has been drawn up, though flawed, to establish new civil and criminal codes. Further steps were taken to put on trial top politicians accused of corruption. A National Integrity Agency to monitor politicians’ wealth was created. But this anti-corruption strategy only has marks for effort.
During the boom of 2006 to 2008, a criminal culture in business and public service could prosper without endangering the economy. Morally, it was sucking the country dry. Economically, the nation was formed of a series of distorted markets chafing against one another. But wages were rising, unemployment was falling and shops, estate agents and car dealers were flushed with cash.
Once the economy dived, this culture exacerbated the decline. Earlier this decade, privatisations took place where millions of Euro - possibly even 100s of millions - had passed between private companies and Government officials. This has not ended. In the last five years deals with the Government still involve massive kick-backs to state officials. Meanwhile tax evasion has been perfected to an art form. This is money stolen from the Romanian people - which has contributed to the massive budget deficits that now ail the country.
The tumour in the bone of the country is corruption. The European Commission put its targeting at the centre of its conditions for Romania’s EU entry. But Romania did not take the threats by the EU seriously. Bucharest is a city populated by tens of thousands of stray dogs, so its citizens recognise the difference between one that barks and one that bites. The country failed to clean itself up and now corruption risks further contaminating public and private life.
Not one person is responsible. The country must take the blame. So must foreign businesspeople who were complicit in encouraging the black market. The EU lost - and is now paying the price by supporting the country with billion-Euro loans. But nobody won.
Sadly, this year the issue of bribery, kick-backs, tax avoidance and fixed public auctions as national pastimes has vanished from the public conversation. Serious newspapers such as Ziarul Financiar refuse to make even rudimentary probes into how bribery is crippling the economy. These journalists live in Romania - a wobbling developing nation with endemic corruption - but they write about the country as though it were Denmark.
Even international financial institutions seem to ignore the problem. Although it is not in the remit of the International Monetary Fund to tackle corruption, outside of tax evasion, it has focused on political instability as a reason for holding back billion-Euro loans due to the economy. But this is a sideshow. The real tragedy is systemic graft.
This year populist demands due to the election have pushed all efforts to grapple with this problem to the bottom of the priority list, as political clans jostle for power. The presidential candidates have debated on the minutiae of salary freezes to teachers, but presented no strategy for tackling corruption, other than stating it is a bad thing. Targeting bribery does not win votes. No candidate wants to accuse voters of being stakeholders in a black market - although every candidate knows this to be the case. Once this circus of politicking is over, attacking corruption must be priority number one of the next administration - or this will be the loose nail that derails the economy.

Michael Bird



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