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For Romanians, prosperity may be years away

More than three years after Communist leader Nicolae Ceausescu and his wife, Elena, were executed, economic reform has been slow coming to Romania, and prosperity for most people remains a distant dream.

Romanians earn an average of $50 per month, one-fourth the average Czech wage, for example. Unemployment stands at 9.6 percent and inflation was 200 percent in 1992 with optimistic government forecasts this year running between 70 and 80 percent.

Badly needed foreign aid and investment have only trickled in to this country of 23-million. Total foreign investment since 1990 is just $600-million, far below the $3-billion-plus figures for both Hungary and the Czech Republic.

Many Romanians say they or some of their relatives are leaving the country to seek jobs elsewhere.

"The process has moved slower than we expected," conceded Cristian Popa, a government adviser on privatization. "But we believe we are about to turn the corner."

After the revolution of 1989, many analysts held high hopes for Romania. Blessed with plentiful farm land and developed oil and steel industries, the country was thought to have a good starting point for restructuring its economy. Most important, international economists pointed to Romania's small foreign debt _ almost nonexistent compared to Poland and Hungary _ as a hopeful sign.

But in its quest to pay off its foreign debt, the Ceausescu regime sold domestically produced goods abroad far below cost to obtain hard currency. In doing so, the country ignored renovating factories and increasing wages. Product quality and worker productivity now suffer.

"Our economy is going down and down and down," said Trajan Dobrej, editor for social issues at Romania Libera, a Bucharest newspaper. "Many factories in Romania can't work because they have no market. This is our biggest problem."

Romania's privatization scheme differs greatly from those in other Eastern and Central European countries. Leaders have purposively chosen a slower pace of reform than the Czech Republic and Poland. Prices of most goods have been freed since the beginning of May, but wages have been indexed to the inflation rate. Inefficient industries are still subsidized by the government, and privatization of state property will stretch through the 1990s.

The reforms could be hampered further by a restless labor force, uneasy over price hikes and growing unemployment. More than 1-million Romanians are out of work, and Popa predicts the jobless rate could reach 14 percent by year's end.

Hindering foreign aid is Romania's international image as a backward Balkan country. Citing fundamental human rights abuses such as the government holding a monopoly on television, the Council of Europe has withheld full membership for the country. The European Community has put other former Soviet bloc countries ahead of Romania for full admission.

President Clinton, as did his predecessor, George Bush, supports granting most-favored nation status to Romania, but the Senate has refused, preventing Romania from obtaining the reduced tariffs that go along with it.

"I'm not so sure the view the West has is based on reality but based on the situation here 10 years ago," said Marcel Dinu, state secretary in the Ministry of Foreign Affairs. Dinu points to the presence of more than 100 political parties and hundreds of publications as proof of a lively, developing democracy.

Popa, the government adviser, calls 1993 "the most crucial year" for Romania's economic reforms and thinks Romania is about to cash in on lucrative foreign investments. Poland, Hungary and the Czech Republic are saturated, he said. Popa thinks Romania will attract between $1-billion and $2-billion in foreign investment annually by 1995.

To lure Western capital, the government is billing the country as a place offering a well-trained work force and an untapped consumer market. Experts say the comparatively low wages Romanians earn are an incentive for Western entrepreneurs. But inefficient industries, particularly the petroleum and steel industries, will need to be eliminated, they say.

"A lot of tough choices have to be made this year," Popa said. "There are many inefficient companies that are a drain on the economy."