BUSINESS

Reuters: Corruption fight in Romania puts brakes on investment

Romania’s crackdown on corruption is having an unintended consequence: investment is slowing as many officials avoid approving projects lest they become the next target of the investigators, Reuters wrote on Wednesday in an ample article.

Civil servants and ministers who would otherwise sign off on projects, sometimes but not always in return for bribes, have become hesitant. Even honest officials fear the deals will attract scrutiny by prosecutors and that they will join a long line of public figures to be investigated or imprisoned, Agerpres writes, quoting Reuters.

In the long term, most observers say, rooting out corruption will bring huge benefits to Romania, the European Union’s second poorest country. For now though, Reuters writes, it is delaying both private investment and the signing of contracts for firms to undertake projects for the state.

The slowing of the decision-making process has contributed to the significant reduction of capital expenditure, with net public investment as a share of GDP being at a 7-year low, according to Eurostat (EU’s Statistics Office) data, Reuters points out.

“By and large if you talk to most of the businesses I have come across they believe the anti-graft fight was long overdue, some message had to be given,” Ahmed Hassan, Deloitte managing partner in Bucharest, stated for Reuters.

“The drawback of it – we have seen that in the last one year specifically, even vis-à-vis our projects – is that decisions are just not happening. Some people are waiting, maybe it’ll go away from me and someone else will do the approval. And that’s just not good. Sometime strategic projects could be delayed because of over-nervous bureaucrats,” Ahmed Hassan added.

Business executives are reluctant to discuss openly which of their projects have been held up, fearing that publicity will lead to yet more delays, the British press agency notes.

At any rate, Olguta Vasilescu, a prominent mayor, said local administrators are on a “signature strike.” Aristotel Cancescu, the suspended chairman of the Brasov County Council, agrees.

 

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