Text: Žikica Milošević
Romania has instigated a rebellion in the EU, but this is a type of rebellion that should be widely copied. They raised the salaries in the public sector, principally for medical workers and teachers, thus stopping braindrain of the educated Romanian workforce towards the West. The move was highly criticised by the EC and, no surprise, by the IMF. But, should anyone listen to them at their own risk?
ROMANIAN SECOND REVOLUTION
Around about this time of the year, in 1989, Romania experienced its first revolution when a mass of dissatisfied people removed the then President Nicolae Ceauşescu from power because of the nation’s low living standard. Back in the day, the living standard in Romania was the worst out of all Socialist countries in Europe. Romanians were the butt of joke in Bulgaria with the Bulgarians mocking them by saying „Compared to you, we are like Yugoslavia“. Now that Yugoslavia is gone and Bulgaria and Romania are in the EU, they are not doing badly at all. Romania is still in a slightly better position than Serbia. But Romanians were never willing to „disappear quietly into the night“, but were rather keen to rebel. This time around, the rebellion did not take place in the streets, but in the national parliament which passed a law that should put an end to a tragic situation that is similar to the one happening in Serbia too – that of the most educated people, doctors and nurses, leaving the country to go and work in West Europe, namely in Italy, Norway and especially Germany. The law, for which 188 Romanian MPs voted in favour and 28 against, stipulates that the monthly salary of the best ranked doctors who work in the national health service would increase to 2,700 EUR from the current 1,000 EUR, while nurses would earn 900 EUR compared to the current 530 EUR. Salaries of certain university professors will go up by 100%, and this increase will be implemented gradually, in the period from 2018 to 2022. The effects of such changes will cost the state close to 10 billion EUR in the next five years.
WHO IS AGAINST?
Of course, nobody. At least not in Romania. However, the world centres of power could not let the sleeping dogs lie. The EC has recently warned the official Bucharest not to raise civil servant salaries, while the IMF underlined that the successive decrease in tax rates in the last two years had already significantly depleted the state budget. According to them, Romania is doomed because of the said costs as if these costs don’t already exist because you are schooling scientists and doctors who are anyway going to leave the country. How about costs that arise as a result of inadequate healthcare which adversely affect the nation’s health? But let’s dig deeper into what the IMF has actually been doing in the world this year. Actually, the IMF is not concerned with your development, but is more concerned with helping you to achieve macroeconomic and budget stability so you can pay your debt. No country has ever achieved development by listening to the IMF. The case of South Korea is a pretty telling one because this country did not listen to the IMF, and did everything the opposite. Today, South Korea is called Asian Tigar because of its economic prowess. Following in the South Korean footsteps, Sri Lanka also refused to obey by the IMF’s conditions. The Sinhalese clearly demonstrated just how detrimental the IMF’s therapy was. Despite voting „yes“ at the referendum, Greece did decide to listen to the IMF, and now their chances of recovery are slim. Greece is dependant on „international assistance“ (that’s a pretty way of saying it), or rather has been neck deep in unfavourable loans granted by the IMF and EU’s financial institutions since 2010. In order to be eligible for more financial assistance, Greece had to cut back on public sector salaries, increase taxes, and implement market reforms in order to increase budget revenue. In the meantime, the recession deepened, a quarter of economy was erased, and almost every fourth work-capable person is left jobless. There is no future, to quote Sex Pistols. Hungary, Poland, Turkey, Russia and Kazakhstan have all managed to escape IMF’s ’embrace’. However, the poorest countries like Moldavia, Greece, Bosnia and Herzegovina and Serbia, are still in IMF’s clutches. Sapienti sat!
THE WASHINGTON CONSENSUS
After they decided to leave the Consensus, the Latin American countries experienced a huge economic growth. Case in point – Brazil! Whichever country remained in the Consensus, it recorded a negligible growth and suffered from mass impoverishment with the elite continuing to amass their riches. Western states, which abode to the Consensus’ rules, found themselves in budget problems due to lowering taxes for the richest segments to the society. Twenty five years since the implementation of this neoliberal system in the US, there have been huge social and financial changes. In the beginning of its implementation, the richest 1% earned 12% of all disbursed salaries in the US, and controlled 33% of its economy. Today, these 1% earn 25% of all disbursed salaries in the country, and control 40% of its economy. Economic growth in the country has been much slower than during the so-called Keynesian golden age, and we all know that there is no success without development. Critics of the Consensus advocate returning to the European model or the so-called Beijing Consensus. Back in 2009, the then British Prime Minister, Gordon Brown declared Consensus dead.