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September 17, 2021
BUSINESS

SAR report: Corruption, the main threat to economic recovery

Political clientelism and corruption prejudiced the budget of Romania and represent the biggest threat to economic growth, the Academic Society of Romania (SAR) affirms in its latest report that will be launched tomorrow, hotnews.ro informs. The report contains evidence based on Eurostat data that countries with significant corruption, like Italy, Greece or Romania spend public money in a pattern totally opposed to Scandinavian countries, which are the best governed on the continent. The money is spent on discretionary projects, stadiums, cathedrals or parks, while key sectors for development, like health and education, remain chronically underfinanced.The less a country controls corruption, the more its deficit increases, SAR warns in its report. The states that have the lowest control on corruption, such as Romania, Bulgaria, Latvia, Lithuania, Slovakia also have the lowest tax collection rates.Romania implemented none of the suggestion made by the International Monetary Fund (IMF) and only pretended to make economic reform during 2009-2012, economist Florin Citu thinks following the analysis presented in the report.The only objective met, from the accord with the IMF, was the budget deficit, but even here the target was reached by increasing the arrears of the government, local authorities and national companies. The dramatic increase of arrears, the higher taxes, the doubling of the public debt and the revising in favour of the Bucharest administration of all targets made economic growth unlikely – even the growth optimistically predicted by the IMF.

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