Friday, 26 June 2015

In praise of me

On Tuesday evening I met the owner of a British company, who was thinking about building a sizeable factory in Romania, and several of his associates. This evening he wrote to the group of us and some others to say he has made the decision to invest here. 

This is very good news but that's not why I'm blogging. I cannot resist quoting what he said in his mail about me.

Paul Wood, as a seasoned traveller of the world I have the privilege of meeting many amazing people from interesting back grounds and with tales of joy, woe or general frustration. Generally the last person I want to meet abroad is an Englishman. If they are not moaning about the country they are in,  they are moaning about something they left behind, or they are covered in tattoo`s and wearing a stupid football shirt, which is normally at least two sizes too small covering a body that has never played football moaning about the English breakfast they ate in the afternoon.

Then we met Paul! An English gem, full of joy and an infectious positivity and zest for life, clearly very comfortable in his own skin and indeed even more comfortable in Bucharest. A joy to meet, a font of possibly useless knowledge along with some very useful knowledge in respect of recruitment in Romania. I urge you all to read his blog, if you read it with an open mind and accept it as opinion and  not fact it will make you chuckle and you will most certainly relate to many of the comparisons mentioned. It is excellent!

Finally comfortable in my own skin, huh? It's true but it took half a century.

The possibly useless information was about Rochester where he lives. I told him about the Prince of Transylvania  who’s buried in the cathedral but was an imposter. More here.

By the way I wrote that article, 25 Reasons why I Love Living in Romania, in about an hour and a half and it has gone viral. Every day another thousand clicks. It's reached 72,000 clicks and the rate never slows down. Here, providence is telling me, is the subject of my book. 

Sunday, 21 June 2015

Inequality in Romania

The Gini coefficient is a measure of the variation in incomes within a country. A value of 0 means absolute equality, a value of 100 absolute inequality, though I do not know what absolute inequality means. 

Romania scores 27.4, much the same as Bulgaria. Hungary scores 31.2. The average for rich countries is around 31.5. Russia by contrast scores 40.1 and the USA 40.8. The USA is the exception here, but the UK is more unequal than most rich countries at 36.0. Norway scores 25.8, Germany 28.3, Rwanda 50.8.

Romania has seen a clear rise in standards of living since I came here in 1998 but everyone complains about how expensive things are and many older people (over fifty) say things were better under Communism.

The very rich are very rich indeed in comparison to the average and spend their money ostentatiously, though they know very well the malice and envy riches provoke. This is why the rich often prefer to entertain in restaurants, not at home. The very rich first emerged soon after the 1989 revolution, but there were far fewer of them then. Before the revolution some people were rich, it's true, but they were very careful about not displaying the fact. 

One of the reasons for the revolution and the changes throughout the Soviet bloc was that leading apparatchiks had power and money but nothing to spend it on. The revolution, which began with an outbreak of fighting in Timisoara and spread to the crowds assembled by the Communists in the centre of Bucharest, triggered a coup plan that was already being organised by the KGB. The plotters wanted to replace Ceausescu with reformed communists well disposed to Gorbachev and the Soviet Union. At some point before or after Ceausescu was killed it suddenly became apparent to powerful people in the Communist power structure that the end of Communism would not be the end for them, but instead a liberation for them. So it proved. The revolution was in effect a management buy-out. 

But the oligarchs, many of whose names are unknown but who wield great economic and political power, are only part of the story. Former secret policemen and party officials grew rich and so did entrepreneurs who were not in the party. Some were crooks, some shysters, some hard working entrepreneurs who may have cut corners and given bribes but grew businesses that sold things people wanted. A few were even completely honest. The numbers of very rich grew enormously as the Romanian economy grew in the 00s. But the growing middle class of professionals and employees of international firms is also increasing inequality.

Income inequality is changing Romania, in good ways - a middle class is what she most needs - but noticeably in bad ways. Romania is becoming consumerist. Dark satanic malls sprout everywhere. They are depressing places and the amount of shopping that is being done depresses me too. What human activity, after all, is less life-enhancing?

Inequality has been widening almost everywhere for thirty years and in the former Communist countries the process is much more striking, although it's fair to say that the disparity in power and life-chances under Communism between a member of the secret police and someone with a 'bad [political] file' was wider than between rich and poor today. 

In Romania porters, ill paid old men whose function is to sleep in cubicles on the ground floors of blocks of flats, say 'Respect, respect, dom'l!' to the occupants and tug imaginary forelocks. Hierarchy is everything here, based on class, universities, culture and command of Romanian grammar, as well as money. I find I like this and I even more like the way Romania, like all ex-Communist countries, is strikingly egalitarian. The kind of people - even hot girls - who in England would expect fancy restaurants go to cheap dives and terraces with their friends. Waitresses are friends with television stars, multi-millionairesses with bank tellers. 

Economists keep arguing that inequality is bad for economies. An OECD report last month contrasted unequal Britain with much more equal France. I am not convinced that inequality does much harm. Certainly the French economy and polity seem in disastrous difficulties, while Britain is doing reasonably well. Nor do I think that inequality weakens social cohesion. 

Romania, from one point of view, lacks cohesion or any sense of a public space or public-spiritedness. Charities - it's purely my subjective impression -seem to get most of their support from foreigners. From another point of view, social cohesion seems to me the most remarkable fact about Romania - people take pride in their country and her history, identify Romania with Orthodox Christianity and have shared values that you only get in relatively poor countries, without much pluralism and with very few nonconformists. 

In fact, it's a bit like 1930s England, with a very small number of very rich people, a smallish middle class, a mass of poor people and only a tiny number of bohemians or free spirits. Under Communism, the pre-war upper class and bourgeoisie fled, were imprisoned or sidelined and a Communist bourgeoisie was created. Nevertheless Romania has many of the cohesive qualities 1930s England had: deference, homogeneity, a natural acceptance of hierarchy and very little crime. 

Wednesday, 10 June 2015

Victor Ponta and the deep state

Yesterday the Romanian Chamber of Deputies, as expected, voted not to lift Prime Minister Victor Ponta's immunity from criminal prosecution. 

Mr. Ponta, leader of the Social Democrats (PSD) has a skin as thick as a lizard's, that quality politicians most need. His unexpected defeat by a large margin in the Romanian presidential election last November meant most people expected him not to last long as Prime Minister. But he's still there. Now Mr. Ponta intends to carry on, despite being charged with 17 offences by the Anti-Corruption Authority (DNA). He pointed out that corruption allegations have been made by the DNA against leading opposition politicians too.

Klaus Iohannis, Romania's ethnic German President, had demanded that the Prime Minister resign for the sake of the country but I wonder whether the President really wants Victor Ponta to go. Romanian 
presidents have to pretend to sever all party ties when they take office but none do and Mr. Iohannis wants his 'former' party the Liberals to come to power. If I were in the President's place, I think I should prefer Mr. Ponta to remain, with the accusations hanging over his head like a sword of Damocles. If Mr. Ponta is still Prime Minister when next year's Parliamentary elections take place I imagine he has small chances of leading his party to victory. 

There is, I suppose a chance that enough PSD legislators will switch sides to enable an early election, but the legislators have paid large amounts of money to their parties for their seats and are very reluctant to pay again sooner than is necessary. Politics is very 18th century here, though Romanian politicians have much less Latin and Greek than the Whigs and Tories of Georgian England. A lot of them aren't even much good at the fiendish complexities of Romanian grammar, which is as complicated as most things in Romania.

The PSD is not really a national party. It is a confederation of local county machines, each controlled by so-called 'barons', popularly believed to be thoroughly corrupt. The party leader is leader so long as he can offer the barons a chance of winning elections and the fruits of office, particularly in the form of contracts. The PSD's only purpose is to win elections but it seems pretty bad at doing so. 
Mr. Ponta cannot offer them much chance of winning the 2016 election. 

If President Iohannis truly wants Mr Ponta to go I presume he will agree with the grandees in the PSD to replace Mr Ponta with someone else from the governing coalition. This would be good for the country but also good for the PSD, who thereby would be rid of an electoral liability. On the other hand, if President Iohannis wants to help the Liberals then he would favour creating a coalition from the opposition parties or leaving Mr Ponta in place.

As the Guardian in London picked up today, after interviewing Mr. Ponta (you could be forgiven for missing it if you only read the Romanian press) Mr. Ponta's immunity from prosecution only covers him for prosecution for conflict of interest while in office, not for forgery, money-laundering and tax evasion back in 2007 and 2008, the bulk of the DNA's charges. He can still therefore be prosecuted.

Ion Cristoiu, the political commentator, argues that the money with which the Liberal party paid for the demonstrations against Victor Ponta (demonstrators are often paid to demonstrate in Romania) is money that came from bribes paid in the EADS and Microsoft scandals. In fact, bribery in Romanian politics has two aspects: bribery to enrich politicians and bribery to pay the costs of running political parties. The public does not understand this distinction and in most cases politicians who receive money in bribes give some to their party and rake off some for themselves, so the distinction is unclear.

I think the young prosecutors of the DNA are doing very well indeed the job for which they are paid and uncovering corruption. They are engaged in cleaning the Augean stables. The secret service, an organisation which had immense power under Communism and still does, is the source of the information which leads the DNA to bring its charges. The secret service is, naturally, very secretive, highly political (they report to the president not the Government, an enormous source of power for the former) and pragmatic, not idealistic. 

The anti-corruption revolution which has led to so many politicians of all parties being accused of corruption and in many cases being imprisoned thus has a dual aspect. It is a very welcome sweeping out of a corrupt political class. It is also an assault on some politicians by an institution which is part of, perhaps is the centre of, what is called in Romania 'the structure of power' - the deep state that rules the country from behind the scenes.

But anyone who doubts that the DNA is a force for good should look at the other big news. Ovidiu Tender, one of the richest and most powerful men in Romania, has been sent to prison for twelve years and seven months and ordered to pay back EUR 41 million to the state. An associate has received a longer sentence. Someone else has received a lengthy term for huge corruption in the rail sector. 

The Mayor of Bucharest's personal adviser was arrested on Thursday for corruption. And so it goes.

Saturday, 6 June 2015

What will Victor Ponta do next?

It seems timely, since he has been accused of seventeen counts of corruption, to republish the article on Victor Ponta that I wrote shortly after he lost the presidential election last November. Like the commentators in the press, I didn't expected Victor Ponta still to be in office seven months later, despite his party's parliamentary majority and despite the fact that there is no reason in principle why losing the presidency should means he loses the premiership. There is a strong reason in principle why plagiarising his doctoral thesis means he should have stood down, but he didn't, so I do not expect him to resign now unless, or rather until, forced to do so.

19th November, 2014: What will Victor Ponta do next?

What will happen in Romania next, after the surprise election of Klaus Iohannis (his name is really Johannis) as President?

What will happen to Victor Ponta, who lost the presidency to almost everyone’s surprise?
Nothing, for the time being. He will continue being Prime Minister, despite the change of president. It is the Government not the president that rules Romania. Like his mentor Adrian Nastase, who was the PSD candidate for the presidency ten years ago (and who is now out on parole), Victor Ponta never wanted to be president and wanted to continue as prime minister. So everything is peachy. Except it’s not.

Victor Ponta though a clever man is not leader of the Social Democrat party (PSD) or Prime Minister because of his own strength of personality or sheer stature. He is not what in British politics is called a big beast of the jungle. Only two Romanian politicians really qualify for that description: Ion Iliescu, who overthrew Ceausescu and had him shot, and Traian Basescu. Victor Ponta, by contrast, was chosen as a young (too young to have been a communist) and telegenic front man for the PSD.

For those who do not follow Romanian politics, I should explain that the PSD is not a political party in the sense understood in Western Europe. It is the continuation of the old Communist Party by other means and without the left-wing ideology. It is not monolithic or genuinely national but is a federation of parties organised in each Romanian county. Each country organisation is in effect a business, a conspiracy or, if we are to call spades spades, a criminal network. Mr. Ponta is leader as long as he can balance the competing interests of the leaders of the party in the countries (the so called ‘barons’) and offer them a chance of winning the 2016 parliamentary election.

Mr. Ponta said that any PSD candidate for the presidency would get 40% of the votes. It was up to him to get another 10%. The fact that Mr. Ponta won only 45% of the votes and therefore lost the presidency does not mean he cannot lead his party to victory in 2016. The way he lost Sunday’s election probably does. 

Victor Ponta fought a very old-fashioned campaign that seemed to be tailored to the unsophisticated, nationalistic Romanian electorate of the early 1990s, offering pension increases and public works. Playing the racial and religious cards against his German Protestant opponent is what everyone would expect him to do, though it seems to have been ineffective. No one was surprised by his shameless campaign to bribe electors with public money Electoral fraud which may have stolen up to 900,000 votes has not made a big impact here, through it certainly should have done. But the sight of very long queues of Romanians outside embassies and consulates, queueing all day in the cold, in many cases never to be allowed to vote, were crucial for winning the election for Mr. Iohannis and will permanently tarnish Mr. Ponta’s image. And these things happened not only on Sunday but in the first round of the election two weeks before. They happened because the diaspora is overwhelmingly opposed to the PSD. Those people were not queueing all day to vote for Victor Ponta. Mr. Ponta defended the way in which voting took place abroad on television in his debates with Mr. Iohannis. The contempt for the viewing public was unmistakable.

Remember that Mr. Ponta was discovered to have plagiarised his doctoral thesis. Then there are lurid, melodramatic allegations on the net about his connection with a young prosecutor who committed suicide back in 2002, while investigating Adrian Nastase. If I held stocks in Mr. Ponta I should sell them. That is what the barons are thinking too.

Anti-corruption revolution in Romania may be about to overthrow the government

Laura Codruta Kovesi, the young prosecutor who heads Romania’s National Anti-Corruption Directorate (DNA), yesterday staged her most dramatic coup. She charged the Social Democrat Prime Minister, Victor Ponta, with seventeen offences including money laundering, forgery, embezzlement and tax evasion. Forgery is a much more serious matter than plagiarising ones doctoral thesis. If found guilty, the Prime Minister faces gaol and the DNA are painstaking people, whose allegations rarely fail to stick in court.

The study of Romanian politics since the 1989 revolution properly belongs not to historians or political scientists but to criminologists. Bribery, blackmail, spying and prostitution have been the pillars on which post-1989 Romanian politics rested. Romanians know that and, if some trusting people didn’t, the revelations of the last six months will have convinced them. 

Miss Kovesi is the Joan of Arc of Romania, doing battle with the, often very high-profile, corrupt politicians and officials whose stranglehold on public and business life in Romania everyone thought was impossible to break. Not entirely but largely due to her a remarkable revolution is taking place in Romania. A real revolution, comparable to the one in December 1989 that was stolen by the Communists. 

Four party leaders have been put in prison and very many other famous politicians and businessmen. Arrest follows arrest. So many of the country’s most famous and powerful men and a few women have been investigated, arrested, found guilty and sent to gaol that even people who follow the news avidly find they can’t remember who’s in gaol and who’s in Parliament. 

The Microsoft scandal, in which large numbers of politicians allegedly took sometimes huge kickbacks for contracts at hugely inflated prices, implicates so many people that it reads like a Who’s Who of Romania, a sort of arriviste-criminal-Romanian version of the Almanac de Gotha. 

In the second half of last year a great number of leading names were arrested. When I asked people why I was told it was because Laura Kovesi, who became head of the DNA in 2013 and electrified the organization, was rushing to finger as many people as she could while President Traian Basescu was still in office. Everyone expected that Victor Ponta of would replace him and would prevent the DNA continuing its work. Instead, unexpectedly, he lost to Klaus Iohannis. 

After that, the DNA went into overdrive, making one high-profile arrest after another. I ask well-informed Romanians in all walks of life why this is happening suddenly and everyone gives me the same answer: 
I don’t know.
Mr. Iohannis had become president pledging to clean up the political class but, without his doing anything, it seems like the political class is about to be swept away, swept in many richly-deserved cases into prison.

Victor Ponta’s party, the PSD, is home to more of the people incriminated by the DNA than the other parties. One reason is because it is the largest, one because it is notoriously corrupt, one might be because the other parties have more swing with the secret service that provides the DNA with evidence, but this, though possible, seems inherently unlikely. 

Whatever the reason, Mr. Ponta has up to yesterday given the DNA his support and ensured that the parliamentary immunity of most PSD members of parliament implicated in crimes has been lifted. In February he assured the Economist that those accused of corruption would not be permitted to enjoy parliamentary immunity. Now he is relying on parliamentary immunity himself. 

In the case of Elena Udrea, a political opponent of both the ruling party and the main opposition party, parliament met on Saturday to lift her immunity. She was taken off in handcuffs to a prison cell which, the press said, she shared with several others including a porno actress and a rat. Handcuffing well-known politicians, who are unlikely to run from the police to make a getaway, is one of the operatic things about Romanian politics. We shall see if Mr. Ponta is led off in handcuffs to a prison cell. His predecessor Adrian Nastase was, twice. 

Parliamentary immunity was lifted for most PSD politicians but not for two or three and not for Dan Sova, the Minister of Transport. The struggle to lift Mr. Sova’s immunity has been the big political story here for some time and thereby hangs our tale. 

Mr. Sova and Mr. Ponta, who are both lawyers, go back a long way, but Mr. Sova didn’t keep his immunity because Victor Ponta has a soft spot for his old confrere. Mr. Ponta does not have soft spots for people. He’s not that kind of man. It's true that both men come from Oltenia and regional loyalties are important in Romania's semi-tribal society (think Saddam Hussein trusting people from Tikrit). Still, that was not a reason. It was much more likely that Mr. Sova was protected because he knew things. 

Yesterday the DNA suggested what those things might be and accused him of making payments to Mr. Ponta back in 2008 against receipts, but without Mr. Ponta having done any work in return. Money-laundering, in other words. According to the DNA, in 2011 he and Mr. Sova then forged documents purporting to show that Mr. Ponta had done some work in exchange for the money. 

As soon as the DNA made its accusations and summoned Mr Ponta to answer questions, President  Iohannis asked Mr. Ponta to step down. The Prime Minister has refused. The President could suspend the Prime Minister from office (he cannot dismiss him) but has chosen not to do so. We’ll see how long this stand-off lasts. If Mr. Ponta resigns the President chooses his successor and the President  is from the opposition Liberal Party, so the Social Democrats are supporting the Prime Minister faute de mieux.

Mr. Ponta once compared the DNA to the Securitate, Nicolae Ceausescu's feared secret police. That was years before he lent the DNA his insincere support. Yesterday, he said that only Parliament could depose him. He was eerily reminiscent of Mr. Ceausescu saying at his trial, twenty-five years ago,
I do not answer, I will only answer questions before the Grand National Assembly. I do not recognise this court. The charges are incorrect.
History repeats itself, first as tragedy, then as farce, as Marx said of the French revolution of 1848. Victor Ponta will not die before a firing squad, like Mr. Ceausescu, but his political life is probably up. 

I said that after he lost the presidential election last November, but this time I am right. I think.