Romanian Reform reform that produced the deindustrialization of the national economy and caused a deficit of 157 billion external

For a healthy national economy is considered necessary as there is in it and to see a particular link between economic efficiency (and therefore its results) and social efficiency (which can not exist without good results of the national economy) that develops in parallel and a higher cultural standard, plus effectiveness in protecting the environment depends on the efficiency of material and moral economy of social efficiency.
People are not born but are formed while effective in society. So human society. In a position to be categorized as healthy or unhealthy economy, one can find any national economy, because "health" that is achieved gradually (step by step) from state to state agricultural economics senior post industrial development.
Existence of a national economy is justified only if its results serve material interests, social and cultural needs of all inhabitants of the country, namely:
1. Ensure population, goods and services it needs to live;
2. Should enable people of working age, to perform useful work within the country from which to obtain income they need and their families to live;
3. To make possible the realization of its social state function, ie to help meet basic needs and those inactive people with low incomes (elderly, children, disabled, students, conscripts, unemployed wives, unemployed) .
This book is a cause-effect analysis using indicators of economic and social development of Romania after 1989, analysis from the author, Dionysius Fota, separated and grouped three general causes illness led to the national economy and the impoverishment of a large part of the population: 1. Lack of proper economic system which was chosen after the revolution of the end of 1989, 2. Dilentantismul and unfairness of many of those decision-state, 3. Inefficiency models adopted for the distribution and use of natural resources, material, financial and human resources of the country.
The writer is a researcher living for over 21 years in Germany, but until retirement worked in Romania, of which 25 years he worked in applied technical and fundamental scientific research. Knowing not only the national economy of Romania and the command economy system which operated until 1990, but the market economy and how it has evolved and consolidated after 1949 in Germany and the countries situated around the river Rhine, the author condemns the ease with which governments have accepted packages Romania measures imposed by the IMF under Standby arrangements and timely implementation of the obligations enshrined in ASAL and FESAL programs, but the lack of consistency between decisions to increase prices by decisions taken by the government (an increase of excise, VAT and CAS) and permanent reduction in the purchasing power of households.
As seen, the hasty liberalization of foreign trade which opened domestic imports have replaced domestic production, produced in 20 years on debt consumption equal to a total deficit of 157 billion dollars of export and caused deindustrialization national economy caused the abolition of a number of 4,141,500 jobs in the existing 8.232 million in 1989. And that by 1990, the national economy was not developed (39th place in Europe for a total of 42 countries), Romania's main goal was to be after 1989, economic growth and development to catch up developed countries in the European Union. Without money or little money you can not make productive investments can not pay for imports of raw materials and energy can not pay salaries and pensions of former employees of budgetary, not to mention the culture, art and the heritage maintenance. And households will fail to have enough money to help them improve their standard of living.
Comecon abolition without prior bilateral agreements to be concluded between countries for goods contracted to be made and exported in the years 1990 - 1992, Romania accounted for a less cumulative value added equal to one fifth of GDP first 3 years after 1989, and produced a net export deficit of $ 7.6 billion and abolition in those three years, to 1.695 million jobs.
Consisting almost 100% from the beginning, the first government after 1989 did not know to protect their sources of income of the national budget and a naive populism has transferred ownership of state enterprises and the liberal leadership of the right of their decision problems they did not know, creating a competition between them and those decisions that caused the abolition of the state capital (which is consumed in a production cycle), ordered companies to return employees shares (that produced economic decapitalization) increase lending rates due to inflation caused by the large amount of money that has reached the market by increasing wages infinite, by returning the shares through debt and subsidized imports on prices of imported consumer goods.
Analysis results of the national economy in the last 20 years have led the author to conclude that Romania deindustrialization deindustrialization differs fundamentally from national economies developed countries. When the developed industrial property market is reduced by saturation durable, these plants and their suppliers upstream and thus remain without application such producers remain pointless. In these countries are still mass production covering basic necessities of their inhabitants and replacement of equipment while physically or morally household waste.
In Romania, a country where mass production was achieved only part of the food and clothing sectors and deindustrialization included all existing domains, only because of substitution of domestic production by imports. Because of absurd policies and national anti practiced by some of the governments of Romania, export production in Romania has received greater importance than production for domestic consumption.
Because of this, the country's GDP share in the added value of agriculture and industry decreased from 62.30% in 1990 to 28.72% in 2008. Subtracting export value of this production for domestic consumption to reduce the weight became catastrophic because of the 45.67% in 1990, it was like in 2008 to be only 3.33%! Therefore, any disturbance to foreign relations or any domestic or international financial crisis makes it impossible to provide for domestic consumption of goods to a minimum to cover the basic needs of people and can not ensure the national budget and social security budget, revenue necessary current government spending such as salaries. Now all these peculiarities of the national economy of Romania, is actually a major cause of economic crisis triggered in 2009.
The influence of international financial crisis on the Romanian economy, says Mr. Dionysius Fota, will be felt only when it is needed to pay debt or loans for the purchase of imported goods.
We like it or not, this is the case and at this stage should not only thought but also the near distant future.
In the minds of Dionysius Fota-author of this work, the first step to be made in justification of the development strategy for the national economy to produce more value added annually assessed real money (as opposed to the three sustainable development strategy focused on necessary expenses achievement of objectives), should be to establish the real average size of per capita income to be achieved (without self-consumption economy and speculative economy) showing a salary in local currency that can support a certain level of consumption enabling environment and also a saving (by check or a commercial bank) that can be used to create credit by banks to invest long term, the development of any country.
And that part of income saved people and businesses to grow from year to year, it is necessary for daily consumption of the population to grow at approximately the same rate to stimulate continuous supply of domestic producers and to confirm that the strategy of development is appropriate. In fact, the development strategy, the author means setting goals and intermediate end that must achieve at different stages in the development of national economy sectors and areas to guide producers for them at the level of microeconomics, able to schedule both products and services you will make money as well as annual investment needed to maintain existing production capacities, as well as investment in infrastructure. Priority investments in production in relation to infrastructure, is because the amounts invested in infrastructure does not exercise a multiplier role demand and subsequent years, as happens with investments in production capacity.
In conclusion, we can say that in the minds of Mr. Dionysius Fota (we can share or not) to be the main priority and propose a strategy to increase value added in the national economy of Romania, long or medium term, should be re industrialization and ban public spending by buying through intermediaries and the establishment of businesses and public institutions the obligation to not only make purchases directly from manufacturers, as shall the Republic of India managed by this measure to reduce and limit corruption of state officials and local governments ..
The author finds that the national economy is making unhealthy trend correlation between nominal and real economy. Summarizes the real economy with a GDP growth rate, inflation and nominal economy. Dividing the inflation rate of GDP growth, the author notes that this index, which should be as close to 1.0, is negative for Romania subunit, which implies a qualitative change in the country's economic policy, because forming businesses to operate and produce microeconomics.
As such, any development strategy must insist that the Romanian government to take seriously the role of initiator and coordinator of macroeconomic policies without which microeconomics and households can not work to create value added and consumption respectively for maintenance requests and of growth. This would ensure an appropriate response to people and businesses to those policies and achieve the goal of substantially improving the correlation between the index growth rate of GDP and consumer prices.
After Dionysius Fota, economic and social involution of Romania in the period 1990-2010 requires necessarily a radical change in the philosophy of macroeconomic policies, which means primarily that these policies take into account economic and social interests of the inhabitants of the country and only in the Second international community's interests. Inequality between the stages of development of national economies of the world, making it impossible to adopt the same in all countries of economic and financial policies. In support of this argument is enough to recall that during the 1990-2010 national economic deindustrialization, reduced the number of employees by about 49% and the budget turned into consumers, and to cover domestic consumption has turned to imports (external deficit of 157 billion dollars). In this case, reducing the high direct taxes on income, which the state has made a gift of unimaginable high-income people favored the accumulation of concentrated growth through which Romania has created its own class of capitalists.
Also in the book we learn that Mr. Fota normally in a developing country, foreign investment can be not only an important factor of economic growth of the country, but in terms of disposable income, the right of such investors to -and charge fees (arising from ownership or shareholders) paradoxically decreases revenues remaining to be distributed in the country, thereby directly affecting the size down of wages and government spending.
The author finds that in Romania it was (the will of governments and not people) to an alarming degree of social dependence on high, as evidenced by the ratio of the number of people assisted by an employed person, which is to be allocated fewer resources available for other activities financed from the budget, such as health, science, education, etc.. When resources for social protection are not sustainable, it can damage the macroeconomic balances and increase inflation.
Finally, Mr. Fota believes that international relations Romania needs more credibility. The international practice shows that a country that lacks credibility will have to "import" some of it, such as for example the monetary authority credibility of Romania, so much needed for economic growth.
Here are just some of the issues that Mr. Fota show us "How the national economy collapsed", "economic factors influencing salaries" and "the goals needs Romania's national economy" and, secondly, they are " measures and solutions to end the crisis and national economic recovery Romania during 2011-2015 ".
All these aspects are derived from the author's concerns for the good of the Romanian economy, concerns that we see in extensive publishing activities in the field of macroeconomics embodied in more than 150 essays and articles, as well as that in the past five years accustomed us with one macroeconomics card per year, ie:
"How to ruin a national economy through industrialization, import duty and the polarization of society into rich and poor," University Publishing House, 2007 (paper the author received the "Nicholas Georgescu Roegen, the Academy of Scientists in Romania)," Introduction to Comparative macroeconomics, "University Publishing House, 2008," The economic crisis in Romania in 2009 ", taken together with prof. Dr. Marius Băcescu, University Publishing House, 2009, "Practical solutions to halt the crisis and national economic recovery," Academy of Scientists in Romania, 2010 "," Romania deindustrialisation radiograph, the root cause that triggered the economic crisis current ", Academy of Scientists in Romania, 2010," and now "Romanian Reform Reform", Academy of Scientists, 2011.
Perhaps, dear readers, you ask why after 75 years of age Mr. Fota demonstrates such a mature scientific approach macroeconomic issues? The answer is simple: because he is a man who is limited to work, fight, idea and faith, he is trying hard, which concentrates in itself a part of human pain. For him, man must be a man in any society they are and any nation would be. The author of this paper are at least two people: a man of ideas and human senses (mind and heart). Separation of human society in which it experiences is a procedure contrary to science, in contradiction with the facts and the science in hand flare should sit him where nature has placed at the head people "card".
We are facing a new book so interesting and original (for a number of features that includes unknown or disregarded in our country), which is worth reading because the simple instructions from the national president and make generally available remedy for suffering endured all the same.
Finally, I consider normal to congratulate the author for his efforts at this book and we want to continue with other works about how to be regarded and treated the national economy development.
We thank also Mr. prof. Dr. Dr. (general reserve) Vasile When, president of the Academy of Scientists in Romania, a lifetime supported everything new in the creation of scientific and Publishing Academy of Scientists in Romania for the effort made this book to see the light the pattern. The only thing more must be done is that this book will reach those who have a role in recovery of the Romanian economy.

 

prof. univ. dr. MARIUS BĂCESCU

AOSR founding member, President Department of Economics, legal and sociological