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Funny: A Romanian ghost feints… the IMF!

This is the kind of story that those who live in a normal, not insane, country, will never see.

Some Romanian journalists and bloggers discovered last year (in 2009) that in 2008 one of the biggest “contributors” to the Romanian economy was a company from Brasov county that reported zero employees, zero spendings, zero investments and almost… $700.000.000 revenues! All generating a net profit worth of … $700.000.000!

The journalists tried to investigate this marvellous company and they discovered that the company’s “official” address is somewhere in a marginal village from Brasov county, in the house of some poor family that never heard about this company. In a word, in Romanian law this is called “illegal headquarter” and it was a sufficient reason for the authorities to investigate and eventualy close this company. But the authorities decided to take no action.

Recently, the Romanian Ministry of Treasury published all the financial data for 2009. In 2009 Romania had a deep economic fall, with (officialy) -7,2% economic growth y-to-y. This was a little surprise because everyone expected the fall to be somewhere between -9%-10%. So, the official data contradicted somehow the popular feelings.

With the crisis so deep, the Governement decided in February 2009 to take $20.000.000.000  (twenty billions) in loan from IMF (International Monetary Fund). But, of course, the IMF asked for some reforms and some economic parameters (such as budgetary deficit) to be reached. Very difficult task for a Government whose main task was to ensure the (fraudulent) re-election of Traian Basescu as President!

So, speaking again about that company, the journalists discovered that in 2009 the Ministry of Treasury considered the Brasov company as a … “big budget contributor” and that this ghost company reported now … $4.000.000.000 (four billions) as revenue, equal to profit! This equals 2,5% from Romanian GDP and it is bigger that the combined profit of Orange, Vodafone, Carrefour, Cora Hypermarche, Petrom OMV (the oil company), Erste-BCR Bank (biggest bank), Coca-Cola Romania and many other big Romanian businesses.

However, one mystery remained. Was it, or not, taken into account this “company” when calculating the GDP? Because, if this company’s turnover was taken into account for the GDP’s calculation, the implications were huge:

  • In 2009, Romanian GDP fell not with -7,2%, but with almost 10% !
  • The Romanian authorities have lied the IMF regarding the budgetary deficits that were well over the agreed limit !
  • The state of Romanian economy is worst than reported!

This is why some journalists have immediately phone to the head of statistics and asked whether the officials took into account this company when they calculated the GDP for 2009.

And shock: initially, the answer was YES !

Then, only few hours later, when the answer was already published in several newspapers, a lot of State representatives (from Treasury, Statistics etc.) started to bombard the press with “explanatory” press-releases stating that this company was never included in GDP calculation. Even the head of statistics motivated that, when questioned about this problem, he was in… holiday and he answered yes, but in fact it was no!

Now the authorities have promise that they will conduct a very thorough investigation and, if needed, they will close this company. But this is crazy. It’s almost sure that the authorities used this ghost corporation to “improve” the statistics and to trick the IMF. And the Romanians. And themselves!

Conclusion: You should never underestimate the resources of Romanian bureacracy to produce lies. Since the inception of the national state, in the XIXth century, Romania was one of the most bureacratic countries in the world. In the XIXth century Romania had more state employees in office jobs (public clerks) than Germany or France. This situation continued during the XXth century. In Romania the sanitary or educational systems are lacking personnel, but town halls in villages with 2.500 of inhabitants have frequently 15-20 employees (and they are often relatives).