The World Bank has sent the clearest message ever to Nastase Cabinet, asking it to choose between quick reform, rewarded by financial aid in the amount of $995 million throughout 2002-2004, and a hesitating policy to lead to a drastic cut in loans, to only $60 million over the same interval.
The Executive Board of the World Bank early this week approved the strategy for assisting Romania, as well as a $50 million loan for the development of the social sector.
The comments of the executives however, did not leave out "the volatility" of the Government's commitment to reform and highlighted the fact that the Bank would not be convinced to keep helping Romania, unless the latter produces solid proof of having conducted structural reforms and of using a "healthy" macroeconomic management.
The assistance strategy has two agendas and two sets of goals to allow including the Government's performances in the optimistic scenario or in the pessimistic one. The documents are to be released next week. The analysts say that what Romania really lacks is a clear plan of development actions and the capability of turning the plan into effect.
Although various economic development strategies have been drafted over the past eleven years, there was no clear vision as to how they should be applied.
The World Bank requested that the development objectives be prioritised and turned into concrete action, according to a strict agenda.
The message the World Bank sends out by the assistance strategy brings nothing new: the Government's priorities must be speeding up privatisation and curbing those astronomical arrears accumulated by the state-run companies, to ease the burden they put on the state budget.
The point is that only a bold persistent reform policy could help enlist the Bank's financial support, which is willing to allot up to $550 million for structural adjustment.
Fully aware of the past ten years' history, the World Bank has come up with two assistance scenarios, two opposites in terms of the amounts of money that can be obtained.
That is why, aside from a "maximum" assistance scenario, the executives approved a "minimal" assistance pessimistic scenario, to be put into effect in case the Government stumbles in enforcing reforms or, the worst that is, it regresses in certain fields.
Such a scenario is not totally ungrounded. In spite of positive economic developments, that is a downward inflationary trend against the background of a GDP increase, the reform measures applied by the Government leave the impression of a limited progress in the field, according to local analysts and international rating agencies analysts. This is only verified by certain mixed signals sent out by the Government.
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