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Romanians Struggle to Live Under Economic Instability - 2002-11-21

The transition from Communist economies has been difficult for most of Central and Eastern Europe. In Romania, despite a decade of struggle, economists say the pace of reform has been substantially lower than in many neighboring countries. But recently there have been some signs of growth.

Whether you're waiting in line for a hamburger at a fast food restaurant, sitting in the boardroom of the Central Bank, or visiting the parliament, everyone in Romania has something to say about the economy, starting with Prime Minister, Adrian Nastase.

"The inflation rate went down to around 18 percent this year. We hope that this will represent 13 percent next year," he said. "And we'll be able after several years of tough economic reforms with the IMF and the European Union, to have a one digit inflation rate in 2004."

That would be a significant accomplishment considering that inflation in Romania was about 34 per cent last year.

One key part of the effort is privatization. The Romanian leader says many small and medium-sized state companies have been privatized and now the private sector is about 70 percent of the economy.

But critics say the private sector remains underdeveloped and large-scale privatization is a slow process. State enterprises still play a big role in utilities and manufacturing. Some analysts argue that price increases for public utilities have allowed state monopolies to continue inefficient practices while resisting privatization.

Banking is another important target for reforms. And there has been some progress, according to Former Finance Minister Daniel Dainu.

"There is a bright side of the story. A clean-up of the banking system after a series of financial debacles and scandals," he said. "The Central Bank has much larger reserves. It's a much more solid Central Bank."

In spite of all the technical talk, life for much of the population is difficult. The average monthly salary is estimated at around $100, and many Romanians say they face personal financial struggles.

"I'm a $100 per month person. And I just ate something about $3 in McDonalds. And if I eat a daily meal at McDonalds, I finish all my salary per month. I buy books. I have to have clothes on me, and money doesn't exist in Romania. Economy also doesn't exist."

"It's pretty hard, I think. Our parents' income is pretty low. And it's a hard life, I think, for most people."

"In comparison with what people are getting from their jobs, the wages, the car, the fuel for example, is a little too expensive. Renting an apartment, many people maybe cannot rent from their wages, because they don't have enough money."

Opinion polls indicate that poverty is one of the top concerns among Romanians. According to analyst and political science professor Stelian Tanase this is disturbing.

"In the last poll (several days ago) 45 percent of the people questioned about poverty said they lived better under Ceausescu regime," he said. "I'm not very happy hearing things like this."

According to Professor Tanase, many people are wondering just how successful Romania's transition from Communism has actually been. He says the government has little in the way of resources to help people, although it may want to.

This week, Romania was invited to join NATO, a symbolic and also real move toward further integration with Western Europe. One of the more difficult aspects of that transition has been the economy, which is very much a work in progress.