Radu Magdin, Contributor
Consultant și analist de risc politic, CEO Smartlink, fost Policy Manager la Google Bruxelles
Top of the list for 2020: the economy as strategic priority
The effort put into convincing the population that it should really care about these marginal topics is tremendous. There is a huge cost of opportunity here: little is done to economically prepare the country for what lies ahead and to smartly adjust, so that the 2009-2010 deep recession would not be repeated. I am hereby joining others in saying that we should wake up and really act as if the economy is our strategic priority, and not an ever delayed topic on the stakeholder agenda.
In the past, I have tried to make the case for #GlobalRomania, an attempt to understand and, to the best of our ability, shape global trends. It was a call to go beyond our natural, inward-looking approach and to pay attention to the changes that are creating waves of economic change across the world. As globalization enters a new age, as global values chains and technology transform our labor markets and societies, as the call of interventionism is becoming mainstream in the West, and as the 4IR is shaping up, Romania can remain detached from these debates only at its own cost.
The Orban government is following in the footsteps of other Cabinets in admitting the thorny problem of fiscal evasion. Yes, our capacity to collect revenue is abysmal and it negatively impacts on the public services the state delivers. But this issue can be tackled not only from the standpoint of declaring the digitalization of ANAF as a matter of national security. The framing – and the underlying mindset – should be a different one: what our priorities are, how we find resources to fund them, how we grow the pie. In the medium- to long-term, it is totally unproductive to turn social classes against each other or to focus on scapegoats. Ambitious growth – not where do we recover or cut from – should be the focus, or to put it more concretely: how do I get 25 more billion euros in 2020 for example, rather than where do I optimize 5 or 10. The answer lies in us looking again outwards, improve image, influence and impact, in exports, networks, foreign policy. Hungary, Serbia are examples in this sense, among our immediate neighbors, with Ukraine accelerating.
Even at the time when the economy and the consumption are robustly growing, Romania is unable to secure a positive trade balance – and, again, we are out of sync with other countries in the region. We cannot stand idle and wait for the re-equilibration to happen naturally. There are some good ideas about how to stimulate the exports and now is the time to push for them and to show support for those who are just about to become regional and global and they only need a friendly push from the state. Yes, Dacia is beating record after record, but it takes more to reverse current negative trends. We need to seriously think about the internationalization of our businesses and about setting the stage for national champions that could next assume more responsibilities at the regional, European and global levels. Otherwise, we will not diversify (remember the “putting all eggs in one bag” proverb) and our “own” national market will be too difficult in time for local players in their competition with foreign actors who have become more agile in time by doing more to adjust to global needs.
It all starts with the ambition of our leaders and decision-makers to reconnect with the external reality, to make a deliberate and constant effort of assembling and promoting a coalition of top Romanian businesses. Please also use 20% of your energy on ambition and implementation of a vision, not just infighting. Let’s not lose 2020 by getting stuck in the debate about snap elections – let’s ask more from ourselves (in general, this should be our national New Year’s resolution). The fact that the EU targets more strategic autonomy or that the experts announce a potential global recession starting 2021 (see the recent statement by the Managing Director of the IMF) should shift our focus to the economy and emphasize why there is no time to waste with petty political bickering. Our region has been and will remain complicated and will not make our life as a country easier. The automatic pilot mode we are on is unlikely to deliver. CSAT assembled leaders should act before it’s too late, including by framing the money debate properly, on (external) growth not hole-management: it’s smarter and better, including in terms of popularity, to do expansion leadership rather than (continued) frustration management.