Corruption, Again

by Steven van Groningen on 2 November, 2011

The Romanian Foreign Investors Council (FIC) is an association of foreign investors aiming at improving the investment climate in Romania. Last year it proposed to the government  a series of 80 measures in its “Program for Growth”, in order to stimulate economic growth. The government is not obliged to listen to the FIC, of course, but FIC members represent 40 billion of  Foreign Direct Investment (FDI) in Romania and 33% of the Romanian GDP.

The FIC White Book

Last week the FIC published its biannual White Book (download link here) in which it describes progress and proposed measures for improvement in the most important sectors of the economy. The White Book was presented at an event last week to FIC members, press and other interested parties. As current president of the FIC, I was asked during the questions and answers session how corrupt I thought the Romanian environment was. My answers were picked up widely by the press and I ‘ll try to repeat here – more or less – what I said.

This Is What I Said

There is no need for me to make a statement about the level of corruption in Romania, there are qualified international organizations like Transparency International that are publishing reports and indexes related to the matter. We know exactly where we stand and you don’t need my assessment over it. Also, I found interesting the report from the World Bank on Doing Business in Romania. It doesn’t spell the “c” word but there is a link between the ease of doing business and corruption.

It is not relevant how high the level of corruption is in Romania . As long as it exists, we need to fight against it. There should be a zero tolerance against corruption.

I often hear something like  “corruption exists everywhere”. This is true, but it should not be used as an excuse not to deal with it. As long as it exists, we need to fight it. If there is more of it we just need to fight harder.

The (perception about) the level of corruption in Romania has a serious negative effect on the Romanian economy.  How can we expect a Romanian middle class to emerge if the majority of young people believe one can not be an honest successful entrepreneur in Romania. Foreign Direct Investmet is lower as are productivity, tax collection and EU funds absorption.

News, what News?

I was surprised by the attention the press gave to my words. Is it really news that we have corruption in Romania or is it news that someone says something about it ? It would be news if we had succeed in improving our ratings.

Let’s hope that the new anti corruption strategy that is at the moment under consultation will have that effect. You can find it here.

Until then we have to accept that tax collection, EU funds absorbtion, economic activity and productivity are negatively affected as are foreign direct investment and the efficiency of spending of public money. The result, lower economic growth, lower salaries and higher costs. Everyone is affected which doesn’t mean that everybody needs to be part of it. If you don’t like it, don’t be part of it.

Success Without Corruption Exists

This is not the first time I write about corruption, As before, it is important to point out that one can be successful in Romania without corruption. It will be a bit more difficult or challenging. Personally I take great pride in being able to run our bank without using unethical practices. It is a bit like in sports, if you are first at the finish but it is because you didn’t respect the rules, you are a cheat. If you are good and wiling to work hard you can obtain good results in an honest way.

{ 4 comments… read them below or add one }

Luminita November 2, 2011 at 23:51

Nu e o noutate faptul ca statul roman incurajeaza coruptia prin toate practicile necinstite pe care le promoveaza in jurul sau! Un astfel de exemplu l-ati dat dumneavoastra in comentariul de mai sus. Ignorarea masurilor pe care le-ati propus este o dovada nu numai de coruptie crasa, dar si de cinism, incompetenta si nu in ultimul rand de iresponsabilitate. Statul e vinovat pentru ca permite unor entitati economice sa nu respecte legile, pentru ca a generat o birocratie uriasa si pentru ca a cheltuit viitorul nostru si al tarii pe datorie, pentru ca bugetul statului a acoperit gauri uriase ca Bancorex, Dacia Felix, Bankcoop, Banca Agricola, Petromidia, Petrom etc., pentru ca tot ce cumpara este de la 30 – 1000000 % mai scump decat pretul normal al pietei… s.a.m.d. Iar justitia e oarba. Si surda. Si muta. Dar cu buzunare! Pentru toate aceste lucruri o ducem greu. Eu am gasit o solutie, valabila la nivel micro (si nu numai!), mi-am mutat afacerea in Bulgaria. O varianta viabila este si… Olanda, dar trebuie s-o mai studiez! :) eu, una n-am vazut proiecte care sa ajute IMM-urile, n-am vazut/auzit de scutiri de taxe acolo unde chiar ar fi nevoie. Si pentru ca sunteti presedintele unei banci importante din RO, poate ar trebui sa va ganditi la o strategie de stimulare a creditarii pe zona IMM micro/small si sa va asumati niste riscuri pe partea asta! In opinia mea e o greseala enorma sa continuati sa mai imprumutati statul roman! Doar ati constatat si dumneavoastra ce face statul cu banii!

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Buddywonca November 22, 2011 at 10:46

Glad to find your blog, via Gindul News “De ce iubesc Romania”
I’ll follow your blog and sometimes I’ll bother you with my input and/or questions.
I’m a romanian living in Canada for the past 23 years, working as an engineer in automotive tooling industry.
About Corruption, yes it is everywhere but not at the romanian level or at least not so up front like in Romania.
Here in Canada corruption is non-existent at the average citizen level , period.
At higher level, maybe……
Steve, I read some of your older threads and I liked’em.
Way to go…..

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ciprian January 26, 2012 at 13:09

What about coruption and ilegal contracts betwen citizen and your precious bank ? You are the biggest liar ever

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SvG January 26, 2012 at 14:26

In general I welcome debate, but this is not very constructive. Still corruption in the relationship between bank and client is mostly the client bribing the bank employee in order to get a more preferential solution. If you think a contract is illegal, go to court. If the contract is indeed illegal you should always win because we don’t pay bribes as I explained here.

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