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. 


  1. Interesting as usual. Nice touches, the equality between waiters and millionairesses, the old man porter who sleep in tiny rooms and say "respect, domnul," slightly bowing. A couple of comments.

    One, dining out rather than having people round is mainly a cultural thing, European even, whereas the English tend to invite people to our houses, cook the food we will eat (not cater), indulge in DIY etc. After communism ended, most people's homes were a bit shabby, small, or conversely suspiciously rich 9where did that painting come from?), so eating out in the new restaurants that appeared after Ceausescu's rule ended was the norm. In recent years, Romanians have bought shiny new houses, updated their flats with mod cons, and may invite people round partly to show off. But you are right in that it is a culture where they prefer to eat out, in neutral territory perhaps. Home is for the people they trust (in a suspicious society), their families?
    For example, when my kids were younger, I'd put on a birthday party at home, home-prepared food (some of it from England like French fondant fancies), blow up some balloons and and let them play in the garden, which is very un-Romanian..
    The Romanian way is hiring a venue (starting from McDonalds) which provides sub-mediocre food and entertainment.
    If they do the party at home, food will be catering and there will be hired entertainment for the kids, clowns, musicians etc.

    The mall thing. A lot of them aren't buying, it's entertainment walking around the mall, keeping warm in the winter months without having to heat the home all day, like a town with a roof over its head, where people people watch, window shop and don't necessarily buy. Girls (teenagers) who hang out a lot at the malls are called "mallista" (well, my daughter was called that a year ago).

    there is a hierarchy as you say; it's also a patriarchal society.


  2. "The revolution was in effect a management buy-out" will definitely remain one of my all-time favourite phrases to describe what happened in Romania in 1989.

  3. As so often in your blogs, I find here very little to disagree with - so annoying! Such ready acceptance of someone else's views makes me feel that my critical faculties have atrophied, but if your opinions accord so closely with my own, that's how it is. Frustrating, but nice to see someone else articulate things that I have also observed but not put into words myself. Maybe I should start to write blogs too??