Romanian society did not learn yet how to get a lot out of little money. Or how to end waste, particularly the waste of funds from the state budget.
Romanian society did not learn yet how to get a lot out of little money. Or how to end waste, particularly the waste of funds from the state budget. I believe it is high time for Romanian authorities to not waver in the face of political, social or electoral pressures and stop throwing money in economic black holes, stop financing the incompetence of managers, the poor organization of production or the random sell of products.
This type of attitude is highly noxious, and to continue it will come at a heavy price for us all.
Romania needs a healthy economic boost, based on more efficiency in the work place and on less waste of resources.
And one of Romania's urgent needs, as a European Union member state, is to make its economy attractive to foreign capital, now that the domestic capital is in poor supply.
The industry needs the foreign capital to better its competitiveness; the agriculture needs it too, as does the public services area, which operates inefficiently due to monopolistic positions of the companies and the poorly trained managers.
Romania is a country where very few people are indeed working. The worst thing is that the number of tax-payers has shrunk, while the number of retirees has grown out of proportion. In 1990 there were 2.4 million pensioners and over 8 million tax-payers to the state budget. Now the pensioners are at 5 million, while the tax-payers are at 4.5 million.
This is why the proportion of salaries going to the pension fund went higher, to levels hard to sustain, while not fully rescuing the state pension fund. Both employers and employees complain they are burdened with the contributions towards the social security funds.
Employees say they can hardly make ends meet from one paycheck to another.
Why is that? Because still a large part of the population is not paying taxes, working in the gray economy.
There is no true wealth in store for Romania as long as it procrastinates arriving at a healthy and strong economy, based on a free market for merchandise, service and capital, but most of all based on people and institutions which learned how to make money and bring funds to the state budget.
This is the keystone for the country's future development, while the reality is that many loss making company are kept into business with state funds, which means that other companies, the healthy and competitive ones, plus the tax payers as individuals, are supporting their lack of performance.
Now, more than ever, as we arrive at a fork in the road, where bold structural reforms cannot be avoided any longer, it is time to take a rational view, towards the long-term economic development of the country and evaluate the consequences of the reforms, or of the lack there of, on the population. There is no more room now for random choices, or half-way reforms, which otherwise are meant for major commitment and costs.
It is no doubt that moving the economy in the right direction will come at high effort and costs for all involved. But all analyses show that positive results are within reach, most of all when speaking of better standards of living in the years to come.