(story to be published in tomorrow’s issue, March 28)
Bucharest officials seem to be realising what foreign investors have been saying for long: the reluctance of foreign capital and Romanians’ fear of starting their own business is explained in the jungle of permits, authorisations and approvals required, in the slowness and corruption of many public servants in charge of issuing them, and in the snowfall of taxes, too many and too complicated. Prime Minister Isarescu has made an inventory of 85 taxes and fees and, after three months of government, declares that it is difficult “to unwind so many quirks.” In their recent report called “The path toward stability and prosperity in Southeast Europe,” World Bank experts counted no less than 1,821 institutions subordinated to government ministries and agencies. Is the taxpayer better served by such a sizeable administrative apparatus? Ask any citizen, and the answer will be no. He will then continue with daily stories of public servants in the city hall, financial administration, police, etc., who prove that the most insignificant information or piece of paper issued by these providers of public services costs the regular citizen a lot of time, nerves and money. In fact, unless you have in your family a sufficiently patient and healthy retired person to stand for hours before doors or in unending queues, you will barely manage to get a job done. The absurdities do not stop here. The World Bank report gives the example of the Ministry of Interior, where, to obtain a pencil or a paper clip, 10 to 15 signatures are needed. If a simple citizen has to go through so much trouble, for an entrepreneur, the number of papers to authorise, time to waste and money to pay for “tokens of attention” grows exponentially. Practically, a regular person cannot make it in the legal jungle by reading legislation, for instance, ordinances and decisions on taxation. The costs of starting a business have become prohibitive even for a large foreign company. Who can afford today, in the era of online transactions, to send a team of experts to Romania for who knows how many days-weeks-months, to spend money on transportation-boarding-fees, while they are meeting with dozens of officials, one more important than the other, but none able to make a decision; to hire who knows how many lawyers who are beginning to understand something in the stack of Romanian laws, and when the business plan is ready, to see the law change again? This kind of costs has become so exasperating that there are slim chances that any economic signals, even those that normally give a boost to investments, such as a lower profit tax or lower interest rates, or even a possible “green light” from the IMF, will have any effect on Romania. Since the entrepreneurial spirit lingers and has to be expressed, we will get to organise a genuine Disneyland for the fans of “horror business,” where everything is “alive and natural”: non-stop action with successive controls by the Financial Guard, DGCFS and economic police, thrillers with inspectors chased by taxpayers dying to pay their tax, the merry-go-round of authorisations, water decor polluted with cyanide and heavy metals. If it is true that extreme sports are gaining popularity, we could collect, on ticket prices alone, more money than from direct foreign investments, which in the first two months of the year barely crossed the $25 million threshold.