Monday, June 20, 2011
Since I first began the long application process to be a volunteer in the Peace Corps in 2009, I've cringed whenever someone makes a comment about my "adventure." I know being a PC volunteer IS in the broad sense, an adventure ("an unusual experience," "a risky undertaking"), but in my mind there is a distinct difference between adventure and service. Adventure is something I do for myself. Service is something I do for others. And as corny as it sounds, service is the reason I joined the Peace Corps, leaving family and friends and a comfortable life to serve where I'm needed. So when news of a recent government study showing the low level of need for volunteers in Romania came to my attention last spring, I had to admit to myself that--in my particular village in my particular region--I had already reached that conclusion. This may not be true currently at all sites, but in a village where the school has perfectly competent English teachers and the mayor's pockets seem unusually deep, my presence is at best one of ambassadorship. At the same time, unplanned developments in my family and with some of my friends have created greater need for me back home. So when I put it all on the scale, the tilt was obvious and I just couldn't justify staying on in Romania to continue my "adventure." But oh, the difficulty of saying goodbye! I've repeatedly thought I'd like to be two people--one to go and one to stay. Because there are so many reasons I'd like to stay in this beautiful and complex country, enjoying its people, countryside, food, music, and traditions. I liked my Red House apartment, the big-sky sunsets, and many special people in my village and in the city. I became very close to my counterpart, a superb person professionally and personally. I'll miss my PCV colleagues, especially the Westsiders, and several others with whom I bonded during the training months. I sincerely hope my 60 blog entries have given my readers a good sense of what life here is like and that I've represented my country well in my association with Romanians. I arrived back in America last Saturday night after teary goodbyes in Oradea to find teary hellos at the Atlanta airport. My heart is full and I know I'll be gleaning poems from this experience for a long while to come. Happily, I'll be returning to Romania in September with fellow Unitarian Universalists on a tour, so I was able to say "so long" instead of "goodbye" to several people I know I'll get to see then. And that trip will certainly be an adventure, something I'm doing for myself, a pleasure I look forward to.
Sunday, June 19, 2011
I can think of no better way to answer people's questions about the economic situation in Romania and what needs to happen than to share Ambassador Mark Gitenstein's speech to the Bucharest Stock Exchange this past March. ***** BUILDING EQUITY MARKETS AND REFORMING ENERGY MARKETS IN ROMANIA Talk by U.S. Ambassador Mark Gitenstein at the Bucharest Stock Exchange, March 31, 2011 Distinguished Guests, I want to thank you all for joining me here today at the Bucharest Stock Exchange, to talk about something we have all discussed many times: the future of Romania, especially its future economic growth. As many of you here already know, I am the proud descendant of Romanian immigrants to the United States more than a century ago, and this country is dear to my heart. Since my arrival here a little over a year and a half ago, I have had the privilege of working with many of you on a variety of issues that are not only important to the United States, and to our bilateral partnership, but which are important to the future of Romania because they affect each and every person in this country. These include our joint endeavors to strengthen Romania’s rule of law, support for reforms to stabilize the economy and spur a return to growth, and promote Romania’s assets and opportunities to potential investors. The key to Romania’s future is building enduring institutions that under gird your democracy and free markets, transparency, rule of law and predictability. These reforms which began in the early part of the last decade helped to attract over 10,000 RON of foreign direct investment for every man, woman and child here in Romania. Furthering those reforms as your current government has been doing in the last two years is the only way to keep that foreign investment flowing and to generate more domestic investment here in Romania. The most recent assessment by the IMF declared that these measures have succeeded in stabilizing and reversing the economic decline, and if the reform agenda moves forward, Romania can expect a return to positive growth this year and beyond. That is why I am speaking to you today from the Bucharest Stock Exchange. You have not yet harnessed your equity markets in this effort. Why are equity markets important? Growth cannot happen without a reliable energy supply and supporting infrastructure, and the energy sector here will require significant amounts of new investment if the sector is to be a driver for, and not a drag on, Romania’s recovery. Equity markets can play a critical role in attracting investment from here and abroad. Romania’s infrastructure, roads, bridges and rails and especially the energy sector need capital but you must keep your deficits within IMF and EC limits. Just in the energy sector alone you need something in the range of 10 billion Euros to modernize the sector and thereby unleash your most important strategic assets. That CANNOT be accomplished with tax revenues alone. And it will not happen as long as these assets are tied up in inefficient state-owned enterprises run by inexperienced political cronies making decisions based not on what’s best for the company but what serves their own interests. I believe that the right model for Romania is Poland whose government announced in 2009 that it would undertake a program to raise over 10 billion Euros by selling part of its interest in state enterprises. Poland did it without the government losing control of critical assets. Imagine what that would mean for your budget, your energy sector and average Romanians – not just making energy cheaper and more abundant, but also building highways and bridges which would generate businesses and jobs for Romanians and perhaps even reverse some of the difficult budget cuts undertaken in recent years. Poland did this not by giving preferential deals to political allies who bought the assets below their fair value, but by using its equity markets. Under the supervision of reputable financial managers these assets were offered on a transparent open market to the highest bidder. Ultimately many of these state companies will be owned by average Polish shareholders themselves. That’s what should happen here. Average Romanians should own these companies. In Poland there are over 1.5 million retail investors, average Poles who get up every morning, drive their own car to work, and earn a salary. In Romania there are probably less than 10,000 retail investors. That has to change. Shares listed on the Warsaw Stock Exchange are worth over 200 billion Euros. The value of shares on the Bucharest Stock Exchange is less than 13% of that amount. So the market here has some distance to go. In 2009, Poland was the only EU country to report economic growth, in part thanks to the country’s solid capital market. Last year, the PZU Group, one of Poland’s largest financial institutions, gave a successful initial public offering of 2 billion euro in the middle of an economic crisis. Through the first 11 months of 2010, Poland had 81 initial public offerings. Only China (442) and the USA (101) had more. That’s one of the reasons that a recent survey listed Poland as one of the 10 top emerging markets in the world. Just this last year several of the top investment banking firms opened offices there. They see the potential. That can happen here in Romania but not with the current proposed path. The on-going effort to reorganize state-owned energy companies into two “national energy champions,” instead of exploring full or partial privatization options, is not only an inefficient use of valuable resources, but as one outside expert commented, “contrary to government claims, the policy would significantly impede competition, crowd out private investment and raise prices.” It is as we would say in America an effort to “rearrange the deck chairs on the Titanic” because it does not deal with the basic problem of state owned energy companies – that they are not run like real businesses. Media reporting has shown that for at least ten years, more than 50% of Hidroelectrica’s output has been directed to preferential energy contracts at rates significantly lower than production cost. This has resulted in significant profit loss and lack of investment in the company, forcing the government to divert scarce public funding to keep the company afloat. Similar allegations have been made against other energy complexes. While giving wholesale energy discounts to large volume customers is not necessarily an unfair business practice, a state-owned company extending this benefit means subsidizing only a few users at the expense of all other consumers. An important distinction in Romania’s case is that access to these kinds of special discounts often seems to be a function of political connections rather than sensible business practice. Other abuses include at least two examples in the recent past where the government literally used these state-owned enterprises as a “piggy bank” to deal with short term cash flow problems. For example, this past year Romgaz was asked to make a “donation” of 100 million Euros to the government to meet its budget exigencies, and government representatives on the board were directed to approve the “request.” Your government also needs to move on the commitment it made to deregulate its energy price markets if Romania is to fully develop its energy resources. I understand the concern about the impact on individual consumers, especially those below the poverty level. But you can deal with this the way we do in the U.S., with effective regulation, and as in the U.S. and your neighbor Hungary, through targeted social subsidies for the poorest among you. It simply is no longer acceptable to keep all energy prices artificially low even for those who can afford it. As long as Romania chooses to refuse market pricing for gas and electricity, new investment in exploration and production will stay away. Romania will have chosen unnecessarily broad subsidies instead of new jobs, and imported resources instead of increasing its own supplies and potential exports. But there are some good things happening in your equity markets and even in your energy sector. Just two months ago, to great applause, shares from the Property Fund (Fondul Proprietatea) were listed on this very stock exchange, capping years of preparation and anticipation. I believe this listing holds far greater significance for Romania’s economic future than most people realize. The Property Fund holds stakes in 83 private and state-owned Romanian companies, with energy companies comprising a major component of its portfolio. Successful listing of the Fund is prompting fund manager Franklin Templeton to broaden Romania’s exposure to global equity markets and to showcase Romanian investment opportunities to a vastly expanded global audience. This positive impact can be seen on the upward trend of the stock exchange since January. This is a terrific starting point to introduce more private capital to other potential growth areas, such as transportation, infrastructure and retail services. However, all investors will evaluate the risk of investing in Romania, including Government policies toward business, their stability, and how they are implemented. The Property Fund and its presence on the boards of these state owned companies is having a perhaps even more important function. Property Fund board representatives are holding these companies and the Romanian Government accountable for bad decisions. For example, the Fund has challenged the so-called “donation” by Romgaz to the government. It is fighting the ill-conceived energy champions idea. It will fight the cronyism in the state companies and insist that they be run like real companies for the benefit of all shareholders, not just government bureaucrats. They are determined to get real value out of these strategic assets. If the government would sell even larger portions of these assets in the market, like Poland is doing, the Property Fund would have more allies in this fight and in all likelihood those shares would eventually fall into the hands of average Romanians. And then average Romanians would not only own these companies but benefit from the increase in value that would come as these assets attain their market potential. I cannot overstate the benefit that the “self policing” role that real equity ownership in these state companies would bring to Romania. As I said in the beginning, the real challenge for Romania is to build self- sustaining independent institutions which preserve the values of transparency and the rule of law that are critical to free markets, democracy and ultimately to personal autonomy and prosperity. Healthy equity markets, combined with representation of Romanian shareholders on the boards of these companies, is the best guarantee that the companies will act like modern businesses. I am very impressed with the efforts you have taken since 2000 and especially in the last year or so, at great political cost, to reform the state. But it is not enough to reform the pay and pension laws; the Labor Code; the anti-corruption laws; to recruit good police and prosecutors and to start to reform the judiciary. That’s been difficult and it’s good. You should be proud of it. But it is not enough. It is not enough to undertake these reforms to satisfy some bureaucrat in Brussels that you have complied with the CVM or that you should get into Schengen. It is more important and more lasting to empower average Romanians to insure transparency, predictability and to end corruption. In fact empowering average Romanians and offering them a brighter future might help you comply with CVM and gain Schengen entry. More important than any single law or reform, the international community is seeking proof that that drive for reform is coming from inside Romania – not being imposed from the outside. I can think of no better means of demonstrating this commitment than privatizing your energy sector with the highest standards of corporate governance. By kick-starting your equity markets and disbursing more wealth and power to individual investors you empower these investors to block abuses. Individual investors, average Romanians or their representatives, judged by how much value they bring to Romania not how many political points they score, sitting on these boards would do more than even the best prosecutors to end these abuses. Lest you think I am being patronizing in these suggestions I hasten to add that we have been through all of this in the United States. It took us over 100 years to figure out that we needed to do the things I am suggesting here. Our Constitution was ratified with a Bill of Rights in 1789 and a hundred years later we were struggling with exactly the same issues you are here a mere 20 years after your revolution. We still have greedy people in America too and we’re still working on it. In the 1890s we had wealthy railroad barons who ran their companies like political empires, owning newspapers, political parties and politicians. They benefited from generous hand outs from the federal government. Sound familiar? We passed powerful new antitrust laws and created equity markets. Through stock ownership these companies eventually came to be run by independent shareholders. President Teddy Roosevelt’s bust appears on our most revered memorial, Mount Rushmore, because he had the courage to use those laws. The New York Stock Exchange became the most powerful equity market in the world once it was freed from the control of the barons of industry. And even more important we realized the real value of America’s assets and with the help of free markets redistributed wealth to average Americans instead of concentrating wealth in a few oligarchs. You can do this in Romania, like we did it in America and like your friends in Poland are doing. We are here to help, not simply because it is good for you but because it is good for us. Good for us because we will invest along with your citizens in these projects but also because it will make you even more reliable allies and trusted friends. Thank you for listening and let us know how we can help.
Monday, June 13, 2011
June is bustin' out all over--that's for sure! So many recent events. I'll give you the highlights and links to albums of photos. First there was the amazing kindergarten production in my village on Youth Day (June 1st). The big class taught by only one well-organized woman presented songs, dances, and recitations all in elaborate story-book character costumes. Not only did they perform well, but they behaved themselves on stage for over an hour in a very hot room. It was an impressive program and very well attended, of course. (Photos) Then there was Hero's Day in my village. This seems to be Romania's version of Memorial Day, honoring fallen soldiers and living veterans. Our school children processed to the cemetery along with the priest and several veterans and what seemed to be widows of the fallen. The priest offered prayers, the children read short passages and sang, and the mayor hung a wreath on the memorial tombstone. It was a nice ceremony. (Photos) Also during that week Peace Corps' Habitat for Humanity build was occurring in the nearby town of Beius. Our volunteers came in shifts to complete the house in a week. I knew I had too much happening at my school to attend, so I made a donation and enjoyed some of the volunteers coming through the area. (Photos) It was great to visit with them in Oradea and a few spent the night with me in my village before and after their shifts and were even on hand for the community celebration of Youth Day, which was delayed until Sunday, June 5th this year. (Photos) It was in the park, a very nice venue with a fine stage at one end for all the dances, songs, skits, and music. The park was packed and everyone was having a great time--even with the heat. Fortunately, there was a steady breeze, too. My sixth grade students presented two narrative poems in English with accompanying skits. We worked on these after school several times and I spent much time on the head gear and props for the skits. Thank heavens for a Chinese import store a short bus ride away. Everything seemed fine, but the kids seemed to have stage fright when they actually had to perform on stage, and many in the audience who didn't understand English tuned us out and talked. So it wasn't the big success I had hoped for, but I'm hoping the experience was a positive one for them (they sure looked cute in their little bee antennae, bear ears, or flower wreaths!)and that they'll remember it with a smile...or a laugh. One bee wore high heels, the bears kept losing their noses, and the tree kept lifting the branches high over his head instead of in front of his face. Ah, but my paper bag beehive held up just fine. And finally the event I had been anxiously awaiting: the dedication of the Peace Mural at our school. Our mural, along with many others around the country is part of the celebration of Peace Corps' 20th anniversary in Romania and 50th anniversary around the world. (Photos) We encouraged the students to come up with a drawing to be used, but ended up using elements of four different drawings, cleverly interwoven by our documentarian Andrada. The chosen wall is right at the entance to the school and can't be missed! The mayor attended our dedication and cut the ribbon for us after two students read a little speech in English and Romanian. The design features the outline of the country of Romania with scrolls of music from both national anthems, doves, flowers, a peace symbol in Romania's colors and the Peace Corps logo. "But why blue?" our principal asked last week about the light blue dominant color. I think he had something brighter in mind. "It's what the students wanted. It's peaceful," answered Andrada. I like it. It looks for all the world like a big, happy, blue fish, trailing its music and doves through a peaceful sea of diplomacy.
Monday, June 6, 2011
The last of my mini portraits are of "Alina," one of my students, "Bianca," a sales person at a local magazine (convenience/general store), and "Razvan," the foster dad at the Roma Boys Home. Alina is a pretty seventh grader who has the quiet grace and kindness of one much older. She seems "tuned in" to me and makes thoughtful gestures that sometimes catch me off guard. Mostly, she likes to accompany me on my walk home--or at least to HER home, which is about half way to mine. She will approach me after class and say "walk with you"? or at times--on days I don't teach her, she'll simply be waiting a little way down the path. Sometimes her little brother, also a student, will be with her. I'm never sure if she's trying to help me with my Romanian or practice her English. We do both. I will ask "Cum se spune...?" (how do you say?) about many items or phrases. She will ask me questions in English or just make an accurate statement at times that surprises me. She's one of those students you always feel deserves more. I admit there are days when I'm tired and feel I could use a quiet walk home, but I find that I always feel better after walking with Alina, waving her on at the corner where we part, feeling a little unspoken benediction in the "la revedere."****I met Bianca the second day I was in the village, making my rounds to the magazines, introducing myself like a good little PCV. She seemed bemused and I immediately liked her bright, merry eyes and big smile. I know virtually nothing about this woman, but she has cheerfully helped me buy what I need two or three times a week. When I'm in the tiny store and others are there, she always introduces me if they seem curious--much smiling and nodding, and she gives me credit for learning Romanian "repede" (quickly--such a joke) when I ask properly for items, seeming to take a small measure of credit. We've had a few laughs, too. When I was doing some Christmas baking, I realized in the store that I was nearly out of baking powder and couldn't remember "praf de copt." Lee was with me and we both did numerous impressions of dough rising. Bianca thought we were hilarious (well, we were) and finally figured it out after pulling out nearly every little packet under the counter. She knows very well my taste in vin alb (white wine), the particular kind I like requiring her to fetch a little rickety ladder to reach it from the top shelf, and as she's reaching high (she's short) above her head, I and any number of other patrons are yelling for her to reach left or right to fetch it. I think what I really like about Bianca is her look of friendly expectancy, eyebrows raised and half-smile--as though my entering her little world could cause merriment at any moment. I live to serve.*****Razvan is the dad at the foster home for Roma Boys in my village. He's in his thirties, a family man whose wife and two little boys live with him at the American-built home. He is a calm and patient fellow, tall, husky, bespectacled, and earnest. He loves to sing--a tenor--and studied voice for awhile. He supervises the boys with a firm hand, but loves to present them with little surprises--a puppy and two canaries in the past few months. The birds get to fly free among the big potted plants in the living room. I don't know how the housekeeper handles this, but no one seems concerned, and the boys and birds are happy. Razvan and his family are Baptist; I was invited to the "blessing" of their infant son in April. He is simply a good, kind man--perfect for the job he's doing--and when he says, "May God bless you" as I leave the car, I feel God is probably listening.
Wednesday, June 1, 2011
"Anca" and "Crina" are women of my village whom I know through observation, interactions, and snatches of conversation and to some extent through their children. They know little English and so we limp along with my little Romanian, and still I feel I know the quality of their character, and I admire them both. Anca is a woman in her late fifties, a kindergarten teacher and the mother of two lovely grown daughters. She is a bundle of energy and her bright henna-dyed hair and big smile make her easy to spot in a crowd. She not only deals with a passel of tiny tots all day, but she also tends a huge garden, and does massive canning and preserving of the produce as it is harvested. Her home is welcoming and well-organized. I love the fact that she has a fully-appointed wash stand between her garden and kitchen door and that she uses for handy hooks broken twig stumps on trees in her back yard. Her husband cannot eat dairy products and one of her daughters and son-in-law do not eat red meat. Still, from my experience, Anca's meals are delicious, varied and healthful (if one discounts the fried pies, which I do!). At neighborhood celebrations she always has her kindergartners perform--recitations, dances, songs. I don't know how she trains them so well, but they're delightful to watch! At a performance of Romanian traditional music and dance in the city, Anca was the first on her feet, hand to her heart, when one of the singers began, "Rise, Romania, Rise," a rousing anthem. Having lived through the difficulties of her country's recent history, she holds dear her patriotism and pride. One of her daughters is in my adult class, speaks English, and is a very special young woman. Her intelligence and forward-looking attitude speak well for her up-bringing, and her affection and high regard for her mother are obvious.*****Crina is a neighbor, just a few doors down from the red house. I first met her when my landlady brought her up to meet me and make a request. We somehow communicated--neither of them speaking English and I with my baby-talk Romanian. She is a religion teacher (a mandatory subject here) at a school in the city, in her mid thirties, and her two children, Mihai (10) and Ioanna (7) attend schools in the city. She asked if I would spend some time talking with them. I explained that I cannot give private tutoring lessons (PC forbids it, rightfully), but that I would visit with them the next Saturday afternoon. What has evolved is a standing session at their house with her two children and often a few of their friends. I usually tailor for their level a lesson I presented that week to my classes. It became a highlight of my week, the children being precocious and delightful. Mihai is one of those children who seems to have an "old soul," and again and again I have been amazed at his sensitivity and maturity for one so young. Ioanna is impish and cute--a pixie of a child who is taking gymnastics classes and could be another Nadia. But getting back to their mother, Crina is one of the most poised people I've ever met. She is immensely attractive while being modest in her dress and demeanor. Her home is light and airy and aesthetically pleasing and her flower garden at the entrance to their home is nothing short of gorgeous. She speaks to me slowly and repeats as necessary, but (unlike me) she never uses her hands, keeping a very calm and serene tone. She has trained her children to be courteous and they always--on subtle command--present me with a little thank-you gift as I'm leaving--usually chocolates or other sweets. Crina always follows me out to the gate and many times picks a bouquet on the way to send along with me. I have stayed for dinner on a few occasions and been royally treated with traditional foods. She and her mother, who is often there, are both excellent cooks. Her husband, a businessman, speaks quite good English, and he and Mihai keep the dinner conversation going in English very well. She once said to me in the bleakness of January that I should come to see them any time and have a cup of tea, just visit, not be alone. I don't remember exactly how she said this to me, but I got it, and it endeared her to me, feeling that she saw me as a person a long way from home, and not just "the American woman."