ALACO DISPATCHES: Romania’s quiet revolution

ALACO DISPATCHES: Romania’s quiet revolution
Protests against Bucharest nightclub fire.
By Nicolae Reutoi of Alaco June 2, 2016

Ask someone from Western Europe what they think of Romania, and if they’re at all familiar with the country, you’re likely to get an unflattering answer: something along the lines of a corrupt state whose officials have enriched themselves on Brussels’ largesse, or an impoverished nation that has burdened EU member states with its legions of migrants.

There may have been some truth to such perceptions in the late 2000s, but much has changed in recent years. Without capturing many headlines, the country has undergone a quiet revolution that has curbed corruption and improved its economic prospects. The main driver for the sea change has been the emergence of assertive civil society activists and media who have pressured politicians to become more accountable and reform-minded.

Over the last decade, Romania has largely eradicated hitherto disastrous levels of corruption through the development of an independent judiciary that has taken the anti-graft fight to the highest levels of government. Efforts to clean up the country have led to improved economic growth and foreign direct investment. According to World Bank data, Romania’s GDP per capita almost doubled in recent years – from $5,700 in 2006 to $9,400 in 2013. Over the same period, the country has also climbed 30 positions in the Corruption Perceptions Index published annually by Transparency International.

The development of a broadly independent judiciary has been a remarkable achievement, largely credited to the National Anti-corruption Directorate (DNA), which has systematically cleared the bench of corrupt judges, and investigated hundreds of cases of fraud and abuse of power among politicians, officials and businessmen. One of the most effective law enforcement institutions in the post-Communist bloc, the DNA’s success has been possible through a combination of Western financial support and pressure – from the EU and the US in particular – and a population determined to see the institution deliver on its promises.

The tide turns

The tide began to turn in the mid-2000s when Romanians reached a point where they could no longer tolerate injustice and corruption. The impatience for change spawned activist NGOs, some with Western backing, and a diverse, campaigning media, which included courageous investigative journalists. Together, they have facilitated public debate and challenged the authorities by exposing corruption and pressuring ministers and politicians to do something about it.  

The public has responded by punishing officials for perceived shortcomings and wrongdoing, with Victor Ponta, the country’s former prime minister, a case in point. In the 2014 presidential contest he came up against Klaus Iohannis, a popular liberal mayor of Sibiu in Transylvania, who wasn’t given much of a chance. Ponta was seen as the frontrunner, but Iohannis’s anti-corruption platform struck a chord with Romanians, particularly the growing diaspora.

Thousands of expats, many of them Iohannis supporters, queued for hours to vote at embassies across Western Europe because of a lack of polling stations. Their determination in the face of the bureaucratic chaos, blamed on Ponta’s government, was captured in numerous social media videos and photographs, turning many Romanians back home against the prime minister. Iohannis went on to win the presidential race, while Ponta was later forced to step down in the wake of the Bucharest nightclub fire that claimed the lives of over 60 people in October 2015. Thousands protested in the capital over the incident, claiming that government corruption and poor safety standards had contributed to the tragedy.  

Notwithstanding the anti-corruption efforts so far, much still needs to be done. One of the biggest problems is the graft-prone relationship between many small and medium-sized businesses and officials. The culture of paying bribes to circumvent red tape persists, undermining efforts to better regulate the business environment.  

Greater transparency in business will only come about with a change in the mindset of the political class. So far pressure from Western financiers and activists has forced politicians – for the most part – to act, but has done little to change the way the majority of them think. Many continue to have an unhealthily close relationship with the business elite, turning a blind eye or indeed benefiting from the bribery that pervades businessmen’s dealings with officials. Thus far progress has come about because politicians have felt compelled to comply with calls for reforms – not because they wanted to. Until this mindset changes, it will be a long time before we see a truly reformed country.

Nicolae Reutoi is a senior analyst at Alaco. Alaco Dispatches is the business intelligence consultancy’s take on events and developments shaping the CIS region.