Economic Reforms Will Be Back With a Vengeance

Romania and Bulgaria missed plenty of opportunities to advance their economies, and those missed opportunities came back with a vengeance when both countries were relegated to a second-tier European Union enlargement.

One reason was they lagged behind in reforming their economies and switching from command to market economies.

This is why, while everybody expected recessions to occur all over Eastern Europe in the early ‘90s, it was only Romania and Bulgaria which actually went back into recession in the late ‘90s.

The former communist countries moving on the fast lane stopped the degradation of their environment, health or education systems, while the slow movers received IMF assistance to control their deficits.

Competitive-wise, the 10 countries acceding in May 2004 ranked between the 25th sEstoniat and 48th sPolandt in an international ranking of nations. This time Romania and Bulgaria ranked lower than the 60th position.

The frontrunners received massive foreign investments, which made for their respective GDPs to reach over 10,000 euros per capita, while Romania and Bulgaria do not make even the 5,000 euros per capita mark.

For the same reasons should not come as a surprise if statistics would show that half of this decade’s foreign workforce in Western Europe came in fact from Romania and Bulgaria.
There is no reason to wait till 2010 to have the actual figures confirming my take.

Millions of Romanian and Bulgarian work in the West as we speak, contributing to the economies there, while their countries of origin already suffer from lack of qualified workforce.
This time, their relatives spend the money they send back home on merchandise imported from the West.
Lay people do not care for the trade deficit or excess money on the marke; they are just consumers of goods, as people in the West are.

The pay-time arrived sooner than we thought: Romania’s and Bulgaria’s job markets are suffering from lack of qualified personnel; the massive cheap imports take out of the market the domestic products, while local managers have no answers to requests of higher salaries, from their employees, and cheaper and better products, from their consumers.

It is clear now that reality will come back with a vengeance to haunt these countries’ politicians.
Not they, but their constituencies will force them on a road of economic reforms going ahead unabated.