The privatizations required by the IMF - an impossible mission

• Aurelian Dochia: "The number of opponents to the sale of the profitable companies is growing"

• Cristian Ionescu: "Privatization is difficult due to uncertainty"

• Daniel Ionescu: "No more privatizations will have to take place under this government"

According to analysts consulted by BURSA, the likelihood of meeting the schedule for the privatization of minority stakes in several state owned companies, which was agreed with the International Monetary Fund, are minimal, according to the economic analysts consulted by "BURSA".

Economic analyst Aurelian Dochia doesn't think that it will be possible to move to the privatization of some of the assets owned by the state. According to him, it needs to be considered that next year is an electoral year, meaning it will be unfavorable. Mr. Dochia said: "Privatizations are expected to take place in the first half of the year, and the second half of the year. As the privatization process is lengthy, there are plenty of signs that it is rather unlikely that it will be achieved". Also, the attitude towards privatization itself has changed, he added. "The sale of profitable companies has an increasing number of opponents, and the privatization of those that are posting losses is being considered to be made after they become profitable", the quoted analyst said. Under these circumstances, Aurelian Dochia considers that the introduction of private management is a compromise solution, which is more easily acceptable politically.

Nici Cristian Ionescu, country cluster manager "Coface Romania", doesn't have much faith in the odds of success of the sale of stakes in state owned companies.

He said that no matter how real the political interests for privatization are, the latter will be difficult due to uncertainty: "The odds are very precarious, as investors have a low appetite for risk, and the speculative element predominates".

Economics Ph. D. Daniel Ionescu considers that privatization is not a goal in itself. He said that "privatization must be a process which would lead to an increase in the efficiency of management and of companies; the intention of the Government is nothing more than an attempt to conform to the "recommendation" of the IMF, which has nothing to do with Romania's real needs". In his opinion, privatization was "Romania's biggest failure after December 1989" and the cause of the disappearance of over 3.5 million jobs: "Privatization must take opportunities into account, not reflect points of view and foreign pressures which mistake Romania for one of their fiefs. Any sale of majority stakes must meet and serve Romania's interests, not those of the current government and of foreign interests. First of all, we are talking about contractual guarantees ex-ante the actual privatization, which would reflect the effective demand for development of the privatized economic activity in terms of social efficiency, namely on agreeing with the investors to increase and consolidate the number of jobs". In his opinion, "no further privatizations should take place under the current government, which became illegitimate based on the way it has served the interests of the foreign overlords".

Mark Gitenstein, US ambassador to Romania, said that state owned companies represent a resource with significant, but untapped potential. Present last week at the session for the opening of the 37th Annual Conference of the a European International Business Academy (EIBA), he spoke about the role which state owned companies should play in Romania's economy, that of a source of growth, in particular in the energy sector, as Romania has 760 state owned companies whose value accounts 11% of the GDP. But, as these companies are losing money, reforms are needed to turn them into profitable companies, the ambassador said.

The American diplomat saluted the intention of the Government to sell minority and majority stakes in the bringing of private management. He said that he would prefer the complete privatization of these companies, but the privatization of their management could prepare them for that. However, for the process to be successful, the measures taken need to ensure the that management would be independent from political influence and their responsibility towards the accomplishment of objectives.