Since some of you cannot read more than 3 paragraphs, here is the summary of the rest of this article:
Romanians starved and suffered (esp in the 1980’s) not because of bad luck or Communism but because the government decided to sell almost every scrap of food in order to pay off international bankers. And now the same thing is going on today.
For those of you who can read for more than five seconds:
Although I appreciate the hard times people went through during the Communist days, and the survivors of that era are certainly entitled to recount their experiences, there always seems to be one extremely important element missing from The Script, which is why Romanians were standing in line for milk at 5:00 in the morning.
Back in the mid 1970’s, an American man named Hedrick Smith wrote a book about life in Russia under the Soviet Union. I remember reading this as a kid as it explained the long lines for food, shoes and other scarce products. It was (and still is) probably the best book I’d ever read that described what life was like for an ordinary “person on the street” during the Communist era.
If you read Mr. Smith’s book and compared it to the stories Romanians tell about the Communist days, your first instinct would be to say that they’re roughly the same. Food was rationed, goods were scarce and there were lots of lines to wait in and the only way to get anything better was to know the “right” people. And that’s all true.
But there is one huge difference between Communist-era Russia and Communist-era Romania, and his name is Nicolae Ceausescu.
People were hungry and waiting in line for food rations in Soviet Russia largely because the economy was so horribly mismanaged and the leaders subscribed to ludicrous theories about food production, up to and including mass collectivization of farms.
Romania, on the other hand, produced a tremendous amount of food in the 1980’s (when the worst suffering happened) and could’ve easily fed the entire population many times over. What occurred was that Ceausescu and the Romanian government decided to pay off international bankers instead of feeding the people.
I naively assumed that this information was well-known and yet I had trouble finding it online so I guess it isn’t. Therefore a brief chronology is in order:
1965 – Ceausescu becomes the leader of Romania, inheriting the “maverick” position of playing off the West and the Soviet Union against one another, a policy initiated by Gheorghe Gheorghiu-Dej.
1972 – Ceausescu signs the papers so that Romania can “join” the IMF, World Bank and other similar institutions and start receiving massive loans from western bankers.
1983 – Romania is now approximately 13 billion dollars in debt to these bankers. Ceausescu (for a variety of reasons) decides to pay off this entire debt (mostly) by selling off Romania’s food.
1989 – In April, Romania makes the last payment and is now debt-free.
1997 – Now a “democracy”, the Romanian government receives another IMF loan (for a complete chronology of post-1989 IMF activity, see here).
2009 – Romania borrows about 13 billion euros from the IMF.
2011 – Romania is currently number one in the world in terms of most money borrowed from the IMF.
Starting to sound familiar?
As horrific as Ceausescu’s policies were of semi-starving his own people, I have to give him credit that at least he paid off these western bankers. I’m not convinced that the bankers deserved to be paid off, but paid off they were.
The current government of Romania has a much worse plan in mind, which is paying off the debt very slowly, ensuring that with interest payments (on the original loan) and by gutting domestic infrastructure that Romania will be paying back these loans for generations and generations.
The IMF (and its related institutions, including the EBRD) operate in a very “strange” way, strange in the sense that it’s very different than a bank loan that an ordinary person might obtain.
Once the Romanian government decides to borrow this money, the IMF steps in and starts dictating how the government can spend the money it just borrowed. If the IMF says “cut salaries by a quarter” then Romania has to do it. If the IMF says “raise the VAT to an insane 24%” then Romania has to do it. If the IMF says “import Chinese toothpicks and don’t invest in a domestic toothpick-making factory” then Romania has to do it.
And so on and so forth. There are literally thousands of websites documenting the evil that follows IMF (and related) loans to countries.
In the entire 70-year history of these institutions, there have been few if any “positive” results and lots of horror stories of economies and infrastructures completely gutted solely to service the short-term profit of these western bankers.
Make no mistake, whether in 1983 in a bread line or in 2011 with your teaching salary cut by a fourth, Romanians are not suffering due to divine wrath nor “bad luck” but solely to provide a profit for bankers who are not Romanian, have probably never been to Romania and certainly do not care one whit about the life of the ordinary Romanian.
And that is what is missing from the Script.