Despite the economic and political progress Romania has achieved since joining the European Union in 2007, the corruption of the past continues to retard the development of the country. Recent events highlighted this reality. The center-left Social Democratic Party (PSD) was able to win 46% of the vote in elections held on December 11th. The problem is the party is being led by Liviu Dragnea,who was convicted of endeavoring to commit electoral fraud just last year.
In most other democratic countries being judged guilty of such a crime, would be a dis-qualifier from holding public office. The difficulty for Romania, is that many political parties remain tainted by corruption.
Liviu Dragnea received a two year suspended sentence last April. This was for his role in the supposed voting fraud committed, during the 2012 referendum to impeach then President Traian Basescu. He was accused of inflating the voting numbers.
Romania with a population close to 20 million, remains the second poorest member of the European Union and is perceived as one of the most corrupt.
This is despite improving its rank from 69 globally in 2014, to 58 in 2015 in the Corruption Perception Index. The scale of measurement is compiled by an international defender of the fight against corruption, known as Transparency International.
There are many who claim the Dragnea prosecution, was politically motivated. An assertion that may have some merit, in a system rife with cronyism and dishonesty. However, he does has a long history of many questionable political and business activities, which are either unethical or illegal.
Mr. Dragnea is now calling his April 2016 sentence as unjust and insists the law that stops him from being premier at this point is profoundly unconstitutional.
The new Parliament now more firmly under his influence could well vote to change the law passed in 2001. The statute bans anyone with a conviction of holding any ministerial office.
Turnout for the parliamentary elections was at a dismal 39.5%. This was more than two percentage points lower, than the 2012 contest.
That the question of corruption remains an issue with voters, is evidenced by the seating of the third largest party in the country, known as Save Romania Union . It is relatively new and ran on a platform of anti-corruption.
The main competitor the center-right National Liberal Party (PNL), was only was able to garner 20% of the electorate. As a result, Mr. Dragnea returned as President of the Chamber of Deputies on the 21st of December. He has held this position since July of 2015, except for the interim tenure of Florin Lordache.
The electoral victory of PSD is already casting a shadow on the country’s anti-corruption drive. Romania has an independent National Anticorruption Directorate (DNA), that typically prosecutes and convicts over 1000 individuals on a yearly basis.
The efforts of the DNA has granted the country strong approval from the European Commission, which reviews the governance of the country on an annual basis. This was part of the agreement made, when Romania joined the European Union nearly a decade ago.
Under the leadership of the above board Laura Codruta Kovesi, DNA has gone after the leadership of the country. Last year Prime Minister Victor Ponta also from PSD, was forced to resign. He had been charged with forgery and a conflict of interest.
The mass demonstrations that followed a nightclub blaze, made it impossible for him to remain in office. A total of 64 people were killed at the popular nightspot, located in the capital city of Bucharest. The inadequate fire-safety measures, were ultimately blamed as further evidence of governmental graft and bribery.
The President of Romania Klaus Iohannis has already pledged not to appoint anyone prime minister, who has been convicted of corruption. That may well rule out Mr. Dragnea and a number of other influential politicians in the PSD.
The current government is headed by Prime Minister Dacian Ciolos, a former European Union agricultural commissioner. The technocratic government he runs, has come under increasing criticism as not being sympathetic enough to the working poor, retired and disadvantaged portions of the electorate.
A danger now exists that the PSD will form a coalition with the Liberal Democratic Alliance (ALDE). Although ALDE is a smaller political party, it is has been quite vocal in opposition to the DNA. It has for example, called for the ouster of Ms. Kovesi on a number of occasions.
The PSD has been focusing its energies on more economic matters. Guessing voters are more concerned with their standard of living, rather then governmental corruption has recently worked to their advantage. Promises of an increase in the minimum wage and a rise in pension payments, became part of their campaign rhetoric. This populist agenda, has played well with the electorate.
This week, Liviu Dragnea suggested that little known Sevil Shhaideh, be offered the post of Prime Minister. She is a member of Romania’s small Muslim and Turkish community.
At present Shhaideh is a senior official, in the regional developmental ministry. If her appointment is approved by the legislature, she will be not only be the first female, but also the first Muslim Prime Minister in Romanian history.
A the head of the PSD, Dragnea will continue to have significant influence in a government headed by Sevil Shhaideh.
The PSD was able to achieve electoral victory due to the fact that despite high rates of development in the cities, conditions are quite the opposite in the rural areas of the country, where nearly half of the citizenry still reside. The relative poverty rate is at 38% in the countryside and job opportunities remain scarce.
An example of the unevenness of development, is the fact that 40% of rural households still lack indoor plumbing.
At the national level, the poverty rate has not significantly changed since 2008. It had dropped 2.3% from 2008 to 2010, but has since reversed and the number of people living in impoverishment has increased by more than 400,000.
The IMF (International Monetary Fund) reported last year, that Romania’s poor infrastructure can somewhat be attributed to the dominance of inefficient and subsidized state-owned enterprises.
The widespread corruption in and out of government, and the aforementioned state owned companies, together have become a major impediment to more rapid development, especially in the more outlying areas.
Yet overall, the economy of Romania had been growing. Until 2009, it was among the fastest on the continent and was often known as a European Tiger. The year before, the GDP (Gross Domestic Product) had surged 8.4%, more than three times the European Union average.
Since the financial crisis, there has been a major deceleration. Growth this year came in at 2.9%, averaging only just 1.4% over the last five years. Official unemployment is listed at 7.0% with inflation still a modest 1.1%.
The government at present, has been focusing on restoring fiscal sustainability. There is also a renewed push for improving the general business competitiveness by regulatory reforms in various sectors.
The PSD promises of increased expenditures going for public welfare, retirements and higher minimum wages, puts some of the more recent restraint on government spending at risk.
It is likely that Romania will continue to experience political instability, for the foreseeable future. As a result, this discourages an increase in foreign investment and internal economic development.