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|  Romania
the awakening giant of Europe |
Looking for lost prosperity - 1997 : A mixed performance - Rebuilding the Country -
Major Infrastructure Projects March On - The Tough Game - No Pain, No Gain -
The Young Wolves of the Private Sector - What's Next? 
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Interview with
Mr. Emil Constantinescu,
President of Romania,
on January, 21 |
Question: Mr. President, after 1 year at the presidency, your popularity hasn’t decreased. What is the secret of your new style of presidency, according to Romania priorities?
Answer: With all modesty that I must show, I must recognize that this popularity has actually gone up. But this is not my merit. It is the merit of Romanians. For me it is totally unexpected, almost a miracle, because the expectations that the people had in me in terms of change were enormous. What they hoped and what they desired was that, as soon as possible, all the contradictions that have accumulated in the past 50 or 60 years be solved. Certainly, this was not possible, but Romanians were intelligent enough to understand this. In what concerns the style, if one can speak about a style, I have always tried to say what I believe and to do what I say. I have never tried to present failures as successes. I don’t think it’s so much a matter of style, I believe it is important to be convinced that what matters is what you are and not the position you hold and I have always tried to behave in such a manner. It’s true that the destiny has offered me an enormous opportunity, namely to be elected president in a time of radical change for the country. This is a chance that the presidents that are in countries with consolidated democracies, with working market economies, don’t have. Of course, they are much better than I am, but for me is very clear in these circumstances that the contract that I have is not with a four years turn, but with history. And I believe it is certain that somewhere in the history books of Romania there will be one line dedicated to me. And whether this line will be with positive or with negative considerations, this remains to be seen.
Q: So, the hot subject of the moment is the battle between the Democrat Party and the rest of the coalition. Do you think that this so-called crisis has potential for damaging Romania’s image abroad, as well as the reform process?
A: The essence of the political developments that are happening now in Romania shows us that it is not a question of a political crisis at the level of the country. A national political crisis would have meant that the options of the population at large have changed today, compared to the elections of 1996. This would have meant that either the support for the current coalition be reduced dramatically or, on the other hand, it would have meant that a change would have taken place, in the sense that the opposition would have a bigger support than the coalition. The reality, shown by all the opinion polls, absolutely all the opinion polls, irrespective of who ordered them, paid them, executed them or interpreted them, all these polls show that the support of the group who won the elections has increased. What have changed indeed have been certain proportions within the coalition. These have affected mostly the Democratic Party. Why, nobody can say precisely. Whenever you have a coalition, as time goes by, one party pays more or less.
And this is why I proposed to the members of the coalition to announce the strategic cooperation for another turn, to protect those that might have a decrease in their electoral support. So, it is a question of a crisis that involves relations within the coalition and not the relations between the coalition and the opposition.
Practically, nobody in Romania wants to see anticipated elections nor a change. The population is making pressures in order to maintain this coalition. A second aspect, which I find to be more important and which, to my surprise, has not been noticed by foreign observers exactly because it’s strange, is the fact that you don’t have a dispute between those that are for and those that are against reform, it is a dispute between those who want a rapid and those who want a very rapid reform. It is not by chance that surrealism was born in Romania. The good part, however, is that under these circumstances, with these waves of contesting the prime minister, even those that are against reform for ideological reasons, as is the case of some of the opposition parties or part of the press, they have all declared themselves in favor of stepping up reform. And so it is very clear that what you will see now is a stepping up of the reform at everybody’s request. This does not mean however that the negative social consequences of stepping up reform, especially unemployment and higher prices on short-term basis, these will lead to oppositions. And it is important for us to see how we will be able to manage those moments. It is the merit of the current government that until now they have been able to keep the balance between reform and the degree that the population has been able to support for this reform. For the analysts, the reform in Romania can be a case to be studied, an interesting case irrespective whether on the cover you have failure or success. For us, however, there is a responsibility before the people that should not lead us to a situation where you have an operation succeeding but the patient dying.
Q: Mr. President, in your opinion, what are the strategic economic directions Romania should follow on medium or long term? Should it struggle to become a major agricultural country, a tourism haven or will it develop the modernization of metallurgical and petrochemical industries?
A: Before talking about the strategic economic directions that Romania should follow on a medium and long term basis, we must start from an essential question: "What type of society do we want to build at the beginning of the third millennium?". And this is a debate that I will be addressing to the Romanian public in a month time. As is often happens in the world and in life in general, those that begin later the race are more advantaged. They can learn from the mistakes of the others that have crossed this road before them. They can make use of their own disadvantages and skip some stages. In my opinion, the economic strategy of Romania must have as an objective the building of a computerized, postindustrial society and not an agrarian or even developed industrial society. This is why I will propose to Romanians to concentrate their energy in three directions: infrastructure, high technology and a computerized society based on software. It is our idea to rapidly privatize the industries, which eat up a lot of energy, metallurgical, petrochemical, cement industries. We have began to sell these enterprises to foreign investors in order to place the Romanian mark especially on those products which need intelligence, well skilled training and creativity. And our most important objective is to use well the rich cultural heritage of Romania. I believe that it is on these values that the most preferment societies of the third millennium will be based on.
This is why the main investments will be made in education. And I don’t say this because I’m coming from the academic world, because I was Rector and the President of the Council of Rectors in Romania, but because this is my firm personal belief.
Q: One of your main objectives is the battle against corruption. What are the results so far and what do you think should be done to revitalize this battle?
A: The reasons why I started this battle from the very beginning of my turn in office, this battle against corruption and organized crime, because they are very related, are various. The first reason for this is my duty as President of the National Security Council that I must defend the national economy and the security of the state. Countries today are less military threatened. They can be much more easily destroyed or subordinated by touching upon, destroying or subordinating their financial and banking systems and recent events in Central and South-Eastern Europe have shown this clearly. And I believe that the era of a global world began with the global organized crime, which moves much more rapidly than the state institutions, than the rigid economic structures that you find everywhere, including the western world. For a country under going transition, the dangers are enormous because the democratic institutions are not mature enough and the institutions of the market economy are still fragile. And so the processes through which Mafia type structures dominate the economy can be very rapidly followed by political subordination, political domination over these states. There are incipient examples in other countries, which indicate the possibility of political parties even to become extensions of Mafia type structure. So, my first concern was to strengthen the authority of state institution, which partially were involved in such activities. So, the first gain was the cleaning up, at least at the top level of the institution that are made to fight against corruption and organized crime. This is something that I can state now, at the end of one year in office, a very hard year.
A second success was the identification of the main structures of the organized crime: the Mafia in the banking system, in the oil sector, the fleet, chemical industry and certainly the classic ones, cigarettes, alcohol and drugs. These last ones are in an incipient phase but dangerous because of their possible future development. What I can say now is that, even if the results are not spectacular, by identifying and punishing those who are guilty or by recuperating the huge losses that were taken away from the national wealth, because, you know, a trial in the justice system is long and difficult, at least the process has been stopped. In the banking system, today, you will no longer find people who can afford to give huge loans without the adequate support in guarantees.
| The oil Mafia has also been stopped, including by the privatization process and by introducing a new type of processing the oil in the refineries, which avoids the intermediaries and the oil contraband was totally stopped.
Q: Most of people agree that the visit of Mr. Bill Clinton to Romania, immediately after the Madrid Summit was your personal success. Do you believe that in the future the United States will be more supportive of Romania’s major wishes, such as joining NATO?
A: I would say that first of all it was a success for President Clinton. A success unexpected by President Clinton because he was received with greater warmth in Romania, a country which America did not supported for NATO integration, than in Poland, which is a country that United States has supported. Certainly, this can be explained by the Latin temperament of the Romanian people, but actually it is an expression of the strong capital of sympathy for the US and such things who have an emotional dimension cannot always be explained. We must admit that the Americans did not give us to many reasons in history to explain this warmth and sympathy that Romanians fell towards them. It is very well known that 1 million people survived the communist prisons and 200000 people died in these prisons waiting for the Americans to come. Not even today we cannot say that they actually come. They have made some steps, very careful steps. Large birds survey very carefully the land where they are to land. But what I can say now is that Romania’s integration into NATO is now more important for NATO than it is for Romania. Romania has managed through own efforts to build an architecture of regional security so that at the present moment it is not threatened by anybody. All the pessimistic forecasts regarding Romania being placed in a gray zone have been proven to be false, as false as those forecasts that said that Hungary being accepted in the first wave without Romania would affect the historical reconciliation between the two countries. Romanians reacted in a much more intelligent way than had been expected, not only by applauding Clinton but by understanding which are the main efforts and which are the less important. On the other hand, for anyone who is willing to make a simple logical exercise, in is clear that a NATO enlargement without Romania and Poland does not make any sense at all, because Romania is placed at the very meeting place of the Eastern and the Southern flank of NATO. It is enough just to have a look at a physical map of Europe and than look at a political map to realize that this is true. Romania can become for the United States a sure point in a very unsure world, especially since we are not asking anything for this.
What was the least understood was the fact that our efforts for integration into NATO, which was and remains a question of national solidarity, are based on a set of values and on our need for dignity and not on military or economic benefits. This is how we see the strategic partnership between Romania and the United States, as a relation based on confidence and not on benefits.
Q: Lately, an increasing number of American companies started to pay more attention to Romania. Do you think this will continue? What could be done to make the country more visible and attractive for the American business community?
A: I think that this delayed attention that American investor companies give to Romania is based on the analyses of the results obtained by the first American companies that came and invested in Romania, because Americans act according to the model of pioneers.
There is always one carriage going ahead towards the west and now they are coming back to east. And these scouts of the American economy, as all over the world, have been in Romania Coca-Cola and McDonald’s. These companies have obtained in Romania the highest profits in all of Central and Eastern Europe. And also the companies that sells computers or mobile phones. Romanians are very opened to modern things. On the other hand Romania is placed at the very center of an emerging market and it is a stabile nucleus of this emerging market. Romania must represent for the united States not a market of 23 million, which is not very much for the American interest, but the core of a market bringing together 130 to 200 million people. This is an unsaturated market, in a process of gaining better technology, undercapitalized. At the same time, this market should not be seen only in term of the consumers, this is a very limited approach, it must be seen as a zone with a highly skilled population and it can serve as a base for the development in the adjacent regions. Being familiar with the American way of thinking, profit is what matters. As Shakespeare said, the rest is silence.
Q: What are the most important strengths and opportunities the country offers to foreign investors? On the other hand, what are the weaknesses and threats they should be concerned of?
A: At this moment, Romania offers important opportunities to foreign investors, but, unfortunately, not all of them are known. We are now paying the perverse price of the rapid rhythm of changes. What I want to say is that when change takes place very quickly, communication cannot keep the pace. I was sad to see that very often it happens that the iron curtain was replaced by the velvet curtain of the lack of communication. So, foreign investors in Romania can buy land, they can have property rights on land in Romania, in relation with their investments. They have all the guarantees for the rapid repatriation of benefits. The vital regions for trade and economy are free zones. And to this I would add some aspects that I mentioned earlier: the general stability of the society, the cleaning up from corruption, at least at the central level, the improvement of the legislation. The weaknesses are the insufficient development of the capital market, the persistence of some inefficient bureaucracy at the medium and lower level and an unsatisfactory management at the level of some enterprises.
Q: What are the most pleasant and the most uncomfortable things that you have discovered since being President?
A: One of the most pleasant things was the possibility to get to know directly and not just through hand shakes the most important political personalities in the world. It was my joy to find that beyond the conventional images that you see on television and beyond the forced smiles from the newspapers, you find true people, real people, who generally are intelligent people, they have the sense of humor and feelings. Because I have remained first of all an intellectual, the first moment I will have some free time I intend to write a book about how these people are like when the cameras, the videos and the tape recorders go away. But in the book I will be able to write about 40 %. The other 60 % I will leave them at home, in a drawer, for my posthumous memoirs. One of the most uncomfortable things is that I have become a luxury prisoner. Even if I understand that I must respect the rigors of my program and some rules and procedures for my personal security, for me, as a person who have always lived in liberty, as an intellectual and a geologist, it is something very difficult to bear. Sometimes I feel like walking in a prison yard.
Q: Mr. President, as a final issue, keep in consideration that you are reaching 2.5 million readers, what will be your final message to them?
A: My experience as a professor has taught me that the most difficult answer comes when there is no question asked and you are free to say whatever you want. 99 % of my students were not able to face the situation. First of all, I don’t know how many of the 2.5 million readers are interested in my message. I think that very few of them.
Q: All of them because they are investors and it’s very important the message of a President to the businessmen.
A: For those that will have the patience to finish this interview, because the time of investors is always very short and they read what their advisors prepare for them to read, which will probably cut out the final message, what I would tell them is to have confidence in Romania, I have confidence in Romania and I think that the investors must rediscover what was initially at the basis of developing this economic world, namely the undertaking of risk. I’m very surprised to see today that it seems that investors have forgotten this rule. I remember a story that is at the basis of many American movies. A child finds a coin on the street, he picks it up, he looks at it very carefully, he invest this coin with wisdom and he wins. If I would be this child today and if I would see, looking at the world map, this small spot which is Romania, I would look more closely at this spot and invest there. And I’m certain that I would gain.
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© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Romania
published in FORBES
Magazine's enriched with complementary information,
such as full interviews, detailed company files and more.
June 1 st 1998 issue
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