2019, Romania, where to?

Obviously, we cannot greatly influence the course of history. Also, the regional leadership’s requests, or those of the median position (at least) in the European hierarchies cannot be achieved merely through the size of the population. Thus, if we want to exist in the next 25 years … we have to make decisions. Everything is in need of reform, or, at least: the public administration, the education and health systems, the infrastructure and the economy … We have to rebuild a country.

The place where ideas should emerge, as a result of debates, models and solutions (and the challenge between solutions and models), is the political scene. The political elite, which we, the people, have entrusted through democratic vote to lead and develop Romania has concerns strictly related to its “own thing”. Their own pockets, their own freedom, their own image, their own pride or the security of their own future. We do not follow any vision or any plan, we give parents no reason to tell the millions of young people who want civilization and progress “don’t go!”

The attempts to propose different sectorial strategies are a priori destined to fail in the absence of an integrative vision that would allow the implementation of the main objectives set for the coming years in sectorial strategies. At the same time, to propose a public strategy solely because polls show the population’s concern regarding that area, does not convey any superior achievement of the tens of strategies approved by the government. Their fate is similar…

What is not understood and also ignored by the political elite, is that the systems which make a society work are interconnected and, most of the time, interdependent. Additionally, it is overlooked that the existing models have been tested and refined for hundreds of years. Yet, those are regarded as preferable to improvisations and experiments that can, at most, bring extra votes (in fact, the regress of the general state for the benefit of some classes of voters led to the majority of changes in post-Soviet governments).

What is there to do?

To begin with, I believe that the Roman nation (Romanians, Hungarians, Romani, Saxons, Albanians, Italians, Jews, and all other ethnicities with whom we share good and bad in Romania) should choose the model of society they desire to leave to their children. In this regard, although it may seem simple, the reality is different. In 1991, we thought that by adopting a new Constitution, people of good faith, whom are paid from our taxes, will build a democratic and prosperous Romania. The history of the last 28 years does not carry too many elements of pride in this respect.

Research conducted by the Centrul de Analiză si Prognoză pentru Orientări Strategice (CAPOS) has shown that the most important choice we have to make is the level of state’s involvement in our social life. Of course, within a democratic society with a multiparty political system, we are talking about the state’s involvement in the three areas that any member of society can relate to. Those can simply be represented by the street, the school and the hospital. Thus, the infrastructure, the education system and the degree to which the state can provide free medical assistance, represent areas in which, once the level of state’s involvement is set, it can generate inputs for shaping a justified economic model.

I wrote, in a previous issue of the magazine, what we can understand by “social state”. We can chose from models already established, since it is unnecessary to continue the experiments from the last 29 years. At one exetreme, we have the American individualistic system. At another extreme, we have the Scandinavian model. In the latter, the state is significantly involved in redistributing back to the population an income somehow deemed to be made together. The central element needed to be taken into account, is that a particular “social state” model can only be sustained by certain economic models and education systems.

Choosing a model that involves generous social benefits (health for all, free education, subsidized pensions) for example, is conditioned upon the existence of a strong economy, coupled with a significant taxation of profits and labor. Moreover, the economic model for such a system is mainly based on bank financing, to the detriment of stock financing. Bank financing reduces business risks, but it limits profits and can only support certain economic sectors (those with long-term production cycles and few bankruptcies – in the sense that the “life” of companies is longer). As a consequence, the education system must be adapted to bring forth more specialists rather than generalists, predominantly in secondary education.

It is obvious that the model in which the social benefits of the state are more numerous is what Romania could have assumed today, but disputes and “original approaches” slow down the attainment of clarity and performance. Supporting such a system implies a strong economy, a partnership with the financing banks and clearly defined strategic directions for specific industries. In Romania, none of this is present, thus social benefits cannot indefinitely be paid only with slogans.

Abandoning the quasi-unanimous passivity – in fact, we cannot be fair evaders in the train of history, with perpetual business class demands -, assuming a socio-economic model and tracing strategic directions are the main decisions we should take in 2019. Then, achieving a more flexible taxation in order to take over the benefits of ” the democratization of economy “can be an asset for the coming years. Understanding the benefits provided by new technologies in areas considered traditional – platforms such as Uber in urban transport or Booking accommodation – instead of bureaucratic resistance (which, predictably, will prove unnecessary) can vitalize the economy, create workplaces and bring significant revenues for the state budget.

The Constitution, however good, the laws – good or bad – cannot replace the mechanisms which ensure the functioning of a free market and regulate the cost-benefit relationship at a social level. Excessive regulation, stagnation, distortion of the market by the establishment of monopolies and by bureaucratic favoring of certain economic actors cannot lead to economic performance. The illusion that everything is better done if it is done by the state faded almost 30 years ago. Unfortunately, history is not a lesson for whoever decides in Romania, and the revenge of history does not forgive.