Diary
Dan Visoiu

November 2004

''I came back to this ... Hey dog, get away from me!''

This is indeed quite a rare moment for me - sharing my thoughts with...well, a lot of people. For those who know me and my seemingly outgoing nature, I’m still a relatively private person - meaning that I stubbornly guard my privacy! But how many chances does one get to bore other folks with mundane facts, personal philosophies and theories, and above all, words about Romania’s immense potential! Seriously, let me try to make this at least a bit interesting. And since in my diary I don’t just write down facts, but philosophise quite a bit, you’ve been duly warned.

The 25th anniversary of my family’s departure from Romania passed quite recently – 5th October, 1979, to be exact. What is quite ironic is that I 'officially' just moved back for good on 4th October, 2004. Wow! Twenty five years, almost to the day. And I moved back just in time for Romania’s designation as a functioning market economy! But more on this later.

I should mention that since May 1997, I’ve been based in the Central and East European region (Budapest) working as an attorney (although I’m licensed to practice in Florida), and as I’ve worked on a number of projects in Romania, I’ve seen the changes and progress made since then. Better yet, I should say the lack of real change and progress, if we are to compare Romania’s progress with that of its former communist brethren. In fact, I first began working in Romania in the summer of 1996 (back when I was still a summer law clerk with an international law firm), a time when law firms were still practically non-existent, and the legal profession here in Romania was in its infancy (after all, real commercial and corporate law hadn’t been practiced for over 45 years). At the same time, the legal profession has evolved tremendously, and fortunately today there is a crop of bright Romanian attorneys who are professional and experienced enough to compete with lawyers in New York, London, Paris, or wherever. Even public officials are much more professional nowadays. Back in 1998, I remember spending about an hour arguing with a privatisation agency attorney that it was OK to indicate 'ROL' in the contract instead of lei, and that arbitration is usually a faster and more efficient means of resolving a dispute (she kept arguing that she couldn’t accept an arbitration clause because she had read in a newspaper that some arbitration procedures took over eight years!)

These things generally don’t happen nowadays.

Clearly, things are not what they used to be. Back in 1979, my folks would allow me to go and buy milk all by myself - my Dad’s official explanation was that as a 5-year-old it was time for me to learn the ways of the world - without even thinking that something would happen to me. It was that safe back then. Not so in today’s Romania. Back then, I was a model young pioner - having been inducted into this communist youth organisation in the fall of 1978 at the beginning of second grade (will this ever come back to haunt me if I ever want to have a political future?) Somewhere, there are incriminating black and white pictures of me with the standard red 'tie' and that old communist-insignia/emblem belt buckle. Pictures that my mother likes to bring out once in a while to show me that she’s got a dosar on me, meaning that I better behave myself. Of course I’m kidding about the dosar part, but the rest is true.

Getting back to the changes, many, many good things have happened in Romania since: the country is at most three or four years away from EU membership, it is a Nato member, there is a budding private entrepreneur class, and perhaps most importantly, the country will not be going back to the communist system. However, there are still many negative things lurking around. For example, a judicial system which is still not independent and where the rule of law is still a dream (or an empty promise made to the EU), and an economy which is not a functioning free market economy. I don’t care what some EU bureaucrats say. And I will not be convinced. As long as the amount of unpaid taxes owed by state-owned and private companies - which amounts to about 20 billion euros, roughly double the foreign investment Romania has attracted since 1990 - then you simply can’t convince me that this is a functioning free market economy.

These negative aspects are simply due to a lack of real reform. The biggest mistake that I’ve seen here is that comparisons are only made with how Romania was a few years ago. How many times have I heard such statements: ''Clearly Romania is on the right path because there are many more restaurants now, lots of villas are being built, so many more nice cars on the roads'' and so on. What a bunch of BS! A real comparison should be made with the other former communist countries like Poland, Hungary, and even Bulgaria. How is it, for example, that the Baltic countries - who were subjected to communist rule for a period much longer than Romania - were able to carry out real reform and thus join the EU on 1st May, 2004? These Baltic countries were not even sovereign in December 1989, when Romania 'officially' shed its communist past.

Such comparisons would point out glaring deficiencies in Romania’s reform process. In other words, while other formerly communist countries are taking three or even four steps forward, Romania takes one step forward, then half a step backwards. It all boils down to political courage. No matter what anyone says or tries to argue, the only way to progress from a centrally-planned economy to a free market system is to fundamentally change the system - and these fundamental changes require real reforms. It’s as simple as that. Arguing for a slow transition and the maintaining of completely useless and grossly unprofitable industries is fruitless and plain stupid - as only the real reform formula works! This attitude also betrays the fact that those schooled in the ways of the centrally-planned economy don’t understand fundamental free market principles. If you don’t carry out real reforms (as Poland did back in the early 1990s), the result is present-day Romania: less than 5 per cent of the population being well off, maybe another 5 to 10 per cent living OK, and the rest living month-to-month, week-to-week or day-to-day. In other words, a society much more similar to a Central and South American banana republic than an aspiring EU member!

But let’s not forget about the immense untapped potential that Romania has. Which reminds me of a joke I heard years ago. A person walks into a bar, orders a drink, and then he sees a sign behind the bar which says, 'free drinks tomorrow'; so, he comes back the next day, and proudly orders his free drink, but the bartender says, ''Hey Buddy, read the sign carefully, free drinks tomorrow!'' Untapped potential is the equivalent of a free drink tomorrow - as you’ll never get to tomorrow without real reform. Seriously though, I’ve noticed a profound change in the business and political environment over the past two years (as evidenced by the results of the local elections back in June). Romanians seemingly are starting to think for themselves, in the sense that they are much more critical of their political representatives, thus becoming a more politically savvy electorate. The sense of powerlessness - a communist hand-me-down which has been so pervasive over the past few years - seems to be lessening. Consequently, less powerlessness means greater empowerment, which logically will result in Romanians finally 'throwing the bums out' (a wonderful political expression meaning to get rid of those in power.) And then hopefully real reform will take place. The question is not if, but when. I truly believe this.

While I’m not a voracious reader (one day I hope to have time to read as much as I’d like), I recently came across a wonderful passage, which to me accurately describes what hopefully will happen in Romania over the next five to ten years: ''. . . later pleasures required earlier pain, and the creative, happy elements in . . . life now would not exist without the grace of former failures'' (from Thomas Moore’s Original Self). In other words, the bitter and frustrating past will allow for a better future, and the failures of today are a learning experience for all of us, allowing us to make progress when we will be in decision-making positions (and some of these positions will be at the EU level, where Romania will be the seventh most powerful country out of almost thirty once it becomes a full member.) I truly believe this.

So I very much look forward to the 30th anniversary in five years. In the meantime, the road ahead will be very, very tough, but one worth taking. After all, T.S. Eliot put it beautifully when he wrote that, ''only those who will risk going too far can possibly find out how far one can go.'' And for all of us repats, the questions arising from our choice to take this tough road seems to be: ''Is this worth the effort?'' and ''Am I making a difference?'' Well, if not our kids, our grandkids will surely be in a better position to answer these questions for us. But I do see the proverbial light at the end of the tunnel, and the time has come for Romania to start tapping its potential. I know some of you are laughing out loud at this, but I truly believe this.

Dan Visoiu is a Florida-licensed attorney, a managing partner of BAC Romania Investment Advisory Services as well as one of the principals of the Trinity Romania Investment Fund.