REMEMBRANCE IN TIME - Index of

łĂRANU: Romania Economic Opening To The West And External Debt … 327
The leadership from Bucharest did the large imports of machinery and equipment
modern Western manufacturing, supported by foreign loans from IBRD or other
Western banks. As a result, external debt soared.
Most of the loans were contracted for developing medium and long term, but some of
these loans contracted in the years 1976-1978 have become due in the years 1980-1981.
Due to large amounts payable to Western creditors, without having to cope with current
revenues of Romanian exports, the Romanian government reached in spring 1981, the
arrears (late payments) totalling U.S. $ 1.143 million.
In addition to the late payment of credit, "oil bill" to be paid by Romania for imported
oil at a price increased by oil crisis of 1979 and short-term borrowing (which rose as a
share from 4% to 22% in 1980), all contributed to what economists have called "the debt
crisis". The trigger held by the external context: Poland, an important state of the socialist
bloc, came in 1980, to the default payment. The result was not much expected: Western
banks have become very cautious in relation to the CMEA countries, cutting them
effectively, access to finance.
Although management of "high" Romania was advised to begin discussions with all
Western creditors to reschedule debt, in order to prevent an anticipated cessation of
payment, Ceauşescu refused or delayed any dialogue on the subject. The inevitable
happened in the autumn of 1981, and the Romanian state had to start negotiations with
the IMF and Western creditor banks.
It must be said that those in charge of the finances of the country had experience of such
negotiations, the first time when Romania called for a rescheduling of debt. There is
however a great advantage, unique in the communist bloc, that Romania was a full
member of the IMF, World Bank, International Bank for Reconstruction and
Development. Romania was the only country in Eastern Europe that have this quality and
a capital of 500 million dollars made to the IMF.
Romania's position in the IMF was not negligible. In late 1981 the IMF had 145
member countries and the amounts deposited in the Fund at that time reached 60,000
million SDRs (special drawing rights) that was equivalent to approx. $ 600 billion. The
votes of each country were directly proportional to the percentage derived from the total
share capital deposited to IMF. For example, in 1982, the U.S. had 19.64%, England
6.80%, France 4.51%, 5.08% Federal Republic of Germany, Japan 3.92%, Canada 3.20%,
Italy 2.94%, Popular Republic of China 2.84%, Sweden 1.09%, Yugoslavia 0.68%,
Romania 0.61%. Thus, our country after the capital paid, ranked 31, behind us, with
smaller capital, the number of 114 countries including South Korea, UAE, Greece, Israel,
Portugal, Turkey etc.
A Board of representatives of member countries provided the IMF operation, a Board of
Directors consisting of 22 members and a CEO. Based in Washington, the IMF was
actually led by the Board that five countries had one permanent representative: USA,
England, Germany, France and Japan. The other 16 representatives were elected every
two years, each representing a number of countries.
In 1982, IMF Managing Director, was Jacques de Larosière, of French origin. He was
who extended a friendly hand Romania's representative in that difficult time, Petre Gigea.