Romanian revolution illusory to some IMF loans in doubt along with reforms

BUCHAREST, ROMANIA — BUCHAREST, Romania -- German coffee and Mars bars fill shops that once held little but dust and dead flies. Pierre Cardin scarfs hang alongside window displays for Paloma Picasso perfume. But the Western glitz is failing to convince many Romanians that the Christmas Revolution of 1989 that overthrew Communist dictator Nicolae Ceausescu was anything but an illusion.

Ceausescu is gone. His massive folly palace, the House of the People, may be empty, but his followers are creeping back into power, and they are intent on doing things their way with only a wink to democracy.


Against this background, a decision by the International Monetary Fund (IMF) on whether to release pump-priming loans worth more than $1 billion -- suspended since June -- has become a cliffhanger. IMF officials have already met in Washington with pleading Romanian politicians, but the answer has been delayed.

Since elections just over a year ago, the only area in which IMF-desired reform has pushed ahead impressively has been in small businesses. Almost half of small shops are now in private hands.


But since private businesses are generally small retail shops, they generate little tax revenue. Moreover, most Romanians can hardly afford to buy Pierre Cardin suits or Lancome lipsticks. They are struggling on a salary of about $60 a month and inflation of about 300 percent.

The average citizen is only being kept happy for the moment by a curious chain-letter-type investment scheme operated out of the provincial town of Cluj, where it is sanctioned by local authorities. Investors can get a eightfold return in three months. One-sixth of the adult population is said to be investing, with hundreds of millions of dollars already poured in.

Similar schemes in neighboring Serbia did keep many happy for months -- and let the government off the economic hook -- before their inevitable crash.

More fundamental reforms -- including privatizing industry and creating a stock market and free exchange market -- stalled when the new government came in.

Since then, most of the 30 Ceausescu Politburo and other senior officials imprisoned after the Christmas Revolution have been released on health grounds. So has his son Nicu. Most made a remarkably quick recovery.

Members of the old ruling elite have been moving into jobs of influence with startling rapidity. The most recent attempt to dislodge genuine reformers has focused on the banking world. Sources say an effort is under way to remove the heads of the three key state banks who were appointed immediately after Ceausescu's overthrow and who are keen to implement IMF requests, including the stalled privatization of big industry.

The sacking of the bankers, which would have been viewed unfavorably at the Washington IMF talks, was blocked by intervention from President Ion Iliescu. But there are indications that the bankers have won only a reprieve.

One man has overseen Romania's political sputtering since Ceausescu's overthrow: President Iliescu, a former Ceausescu favorite and senior official whose career was sidelined in the 1980s (one rumor has it that he fell afoul of the dictator's wife, Elena).


Mr. Iliescu was elected president with more than three-quarters of the vote in the first elections, in May 1990. That majority was seriously diminished in the last round, and his party is in a coalition with an unlikely assortment of Communists, Nationalists and others.

What his role has been is a subject on which Romanians argue vehemently. Most agree that he had to rely on the middle echelon of Ceausescu's bureaucracy simply because there were other people with experience in running the state machinery.

But on his watch, there has been a lot of skulduggery. That began in 1990, when miners were frequently bused in to the capital to beat up students and the opposition. (They later admitted to being paid off.)

The effect was to alienate -- and frequently scare out of the country -- dissidents and intellectuals. They now complain that what happened in 1989 was not a revolution but a coup d'etat.

After the intellectuals faded from the political picture, the reformist Prime Minister Petre Roman was eased out in September 1991.

The democratic opposition has been unable to get its act together for a variety of reasons. They have only a tiny number of seats in Parliament. They themselves say their parties have been infiltrated and divided and that at least 200 tiny "mosquito parties" were created as a diversion.