The danger of forced sale auctions (by Marian DUSAN)

IMF Romania mission chief Erik de Vrijer, said at the end of his August visit that Romania will not get a letter of intent for a new loan unless the public companies of Oltchim and Transgaz go private.

In other words, IMF has been blackmailing the Romanian government: either you sell those companies or you won’t see a dime. In the case of Oltchim, going private is a good thing for Romania has the company has registered a € 165 Mil loss in the last three years alone. These losses were covered with money from the state budget, meaning our money. By doing some simple math, we can see that each Romanian citizen made an early payment to Oltchim of 3 euros. By way of comparison, we can easily see that during the last three years each Romanian has received form Petrom nearly 4 euros in contributions to the state budget. Therefore, from this point of view, the privatisation of underachieving companies becomes a must.

However, there is also a problem. Economy is governed by the unwritten rule of supply and demand: when the demand is bigger the price grows, whereas when the supply increases, the prices decreases. When IMF put their foot down and say “Sell NOW”, basically the supply increases a lot. Therefore, any investor interested in Oltchim will make a smaller bid because they know the State MUST sell. Instead of making a sale for 10 ROL, we will be making a forced sale for 2-3 ROL.

I believe this to be a harsh lesson for Romania and for our political classes. The crisis is still rampant, and delaying any necessary measures is a costly alternative. Either we do what must be done when it must be done, or we risk of being scolded by Romania’s creditors who will force us to do the right thing, but under their terms, who may or may not be in our best interest.

Pericolul licitatiilor fortate (de Marian DUSAN)

Seful misiunii Fondului Monetar International, Erik de Vrijer, a declarat la sfarsitul vizitei din august ca nu va inmana scrisoare de intentie decat cu conditia privatizarii Oltchim si Transgaz.

 

Cu alte cuvinte FMI a santajat guvernul: vindeti companiile sau nu vedeti niciun ban. In cazul Oltchim, privatizarea este un lucru benific pentru Romania pentru ca doar in ultimii trei ani pierderile cumulate au fost de 165 mil Euro. Aceste pierderi au fost acoperite de la bugetul statului, la care contribuim toti. Facand un calcul simplu (si foarte aproximativ) in fiecare an, fiecare roman platea catre Oltchim cam 3 euro pe an. Daca facem o comparatie, in ultimii trei ani, fiecare roman a primit de la Petrom aproape 4 euro reprezentand contributii la bugetul de stat. Cred ca, privit din acest punct de vedere, privatizarea companiilor neperformante este obligatorie

Totusi, exista si o problema. In economie exista o lege nescrisa a cererii si ofertei: cand cererea este mai mare pretul creste, iar cand oferta este mai mare, pretul scade. Cand FMI bate cu pumnul in masa si spune „vindeti ACUM”, practic, oferta creste mult. Orice investitor interesat de preluarea companiei va oferi mai putini bani, pentru ca statul TREBUIE sa vanda. In loc sa vindem pe 10 lei, vom vinde fortat pe 2-3 lei.

Cred ca este o lectie dura pentru Romania si pentru mediul politic. Suntem inca in criza, iar amanarea masurilor necesare este o masura paguboasa. Ori facem ce trebuie cand trebuie, ori creditorii Romaniei ne vor trage de urechi si ne vor forta sa facem ce trebuie, insa in conditiile impuse de ei si mai putin in dezavantajul nostru.

A necessary step – connecting to the national network of electricity(Marian DUSAN)

Within last month, Romania’s national currency has steadily strengthened itself in relation to the EURO, descending from 4,65 lei for one EURO in August to its current exchange rate of 4,45. Although this is a favorable evolution for the financial sector and for those owing currency, the actual cost for this increase is not to be neglected and we are all going to pay for it in the following months.

The main reason for the appreciation of the Romanian LEU is the decreased ratio of the interbank market liquidity caused by RNB[i]’s intervention. Its effect can be recognized in the 1% increase of the interest rates on the interbank market which in turn has already affected the costs of state financing and will become even more apparent to all economic players in the months to come.

In a nutshell, sooner or later financing will get more expensive for everybody and interest rates will grow and grow. Since the Romanian State cannot indebt itself too much due to IMF restrictions, the only way to boost Romania’s economic growth is through stronger involvement of private initiative, preferable in large-scale projects.

This however, brings about another issue: the amount of foreign direct investment in Romania has greatly decreased by comparison to the previous year, and the main trend is still plunging.

I can tell you from personal experience that the amounts mentioned in Romania for various projects and business ventures are actually pocket change for large foreign investors and international funds. Romania’s main problem is not so much the lack of money, but the lack of confidence and information proven by large investors, who either don’t know what to do in our country, or who have already made up their minds about it, and, based on foreign press titles of political crisis, corruption, breach of democratic principles etc. it’s clearly not in our favor. All the hubbub and commotion are definitely not helping.

What is to be done? Turnkey projects may be great in terms and impacts and very cost-effective at the same time. This type of projects involve identifying the essential investments Romania needs, writing a business plan to match and then pitching those projects to big international investors together with an international consulting company as partner. Like a sort of blue board for all business available in Romania, if you will.

One such project could very well be the transformation of Transelectrica and the Romanian electrical grid. Lately there have been several articles in the press regarding investments funds that have been building windfarms in Dobrogea. Windmills provide cheap electricity, but for now there is another crucial issue: Transelectrica does not have the means to transport nor manage all the power produced in Dobrogea. This situation closely resembles the chaotic developments from the real-estate boom era: whole neighborhood having built without having the access routes to reach them.

Just like hundreds of millions were found for building these windfarms, money can still be found the same way in order to now connect them to the national power grid. This is just one of the many type of investment projects Romania greatly needs and for which international funding

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[i] Romanian National Bank

Un pas necesar – conectarea la reteaua nationala de electricitate (Marian DUSAN)

In ultima luna, moneda nationala s-a intarit substantial fata de Euro, de la un maxim de 4,65 atins in 3 august la 4,45 in prezent. Desi evolutia este favorabila pentru sectorul financiar si pentru cei care au datorii in valuta, costul acestei aprecieri nu va fi deloc neglijabil si il vom plati cu totii in perioada urmatoare.

 

Cauza principala a intaririi Ron, este scaderea lichiditatii din piata interbancara ca urmare a interventiei BNR. Efectul a fost cresterea cu peste 1% a dobanzilor in piata interbancara, evolutie care s-a simtit deja in costul finantarii statului si care se va simti in lunile viitoare si de catre toti actorii economici.

 

Pe scurt, mai devreme sau mai tarziu, pentru toata lumea finantarea va fi mai scumpa si dobanzile mai mari. In conditiile in care statul roman nu se poate indatora foarte mult din cauza limitarilor FMI, singura sansa pentru a accelera cresterea economica a Romaniei este o mai mare implicare a mediului privat, preferabil in proiecte de anvergura.

 

Constatam insa ca si aici avem o problema mare: investitiile directe in Romania au scazut foarte mult anul acesta fata de anul trecut, iar trendul principal este in continuare unul descendent.

Va pot spune din experienta personala, ca sumele vehiculate in Romania pentru diferite proiecte si afaceri sunt bani de buzunar pentru fondurile si investitorii mari din plan extern. Nu lipsa banilor este marea problema a Romaniei, ci lipsa de incredere si cunostinte a investitorilor mari, care ori nu stiu ce pot face in Romania, ori si-au facut o idee cat de cat despre tara noastra, insa ea nu este favorabila, pentru ca titlurile din ziarele externe vorbesc de criza politica, coruptie, incalcarea principiilor democratice, etc. Zgomotul si scandalul nu ne ajuta deloc.

 

Ce se poate face? Un lucru cu un impact semnificativ, dar un cost foarte redus este crearea de proiecte „la cheie”. Acest lucru presupune identificarea unor investitii esentiale de care Romania are nevoie, alcatuirea unui business-plan pentru ele si apoi, in parteneriat cu o firma internationala de consultanta, prezentarea lor la mari investitori internationali. Daca vreti, un fel de avizier unde sa se gaseasca puse toate afacerile disponibile in Romania.

 

Un exemplu de astfel de proiect poate fi dezvoltarea Transelectricii si a retelei de electricitate din Romania. In ultima perioada, in presa au aparut multe articole legate de fonduri de investitii care au construit parcuri eoliene in Dobrogea.  Morile de vant ofera electricitate foarte ieftina, insa deocamdata au o problema esentiala: Transelectrica nu are capacitatea de a transporta si gestiona toata electricitatea care este produsa in Dobrogea. Situatia este similara cu dezvoltarile haotice din perioada boom-ului imobiliar: s-au construit cartiere intregi, dar nu exista drumuri catre ele.

 

Asa cum s-au gasit sute de milioane pentru infiintarea acelor parcurilor eoliene, se pot gasi in continuare bani si pentru a le conecta la reteaua nationala de electricitate. Este doar una din multele investitii de care Romania are mare nevoie si pentru care pot fi atrase investitii internationale.

Marian DUSAN: Nu trebuie sa spunem NU investitorilor

RBA atrage atentia ca impunerea unor conditii nejustificate investitorilor va scadea si mai mult cuantumul investitiilor straine in Romania. Pentru relansarea Romaniei si asigurarea unui climat economic competitiv este nevoie ca deciziile adoptate de partile implicare sa fie minutios calculate si prioritatile trebuie stabilite cu discernamant.

 

“Pozitia guvernului Ponta si conditiile impuse posibililor investitori prin prioritizarea pastrarii locurilor de muncă risca sa reduca prezenta capitalului strain in Romania. In conditiile in care investitiile straine in Romania au scazut in primul semestru al anului 2012 cu 30% fata de prima jumatate a anului trecut si nu se intrevede o crestere spectaculoasa a acestora, este periculos sa impunem investitorilor conditii nejustificate“, crede Marian Dusan, presedintele Asociatiei RBA.

 

Multe dintre companiile in care investitorii straini ar putea sa plaseze capital atat de necesar economiei tarii noastre sunt ineficiente in mare parte din cauza supradimensionarii angajatilor.

Prin impunerea unor conditii de pastrare a salaritilor si implicit a ineficientei, pretul la care se vor vinde companiile va fi mult mai mic decat pretul la care s-ar putea vinde in conditii normale. Asta deoarece “ecuatia economica se pastreaza, investitorii vor oferi un pret mult mai mic tocmai pentru ca trebuie sa ia in calcul niste cheltuieli mult mai mari”, concluzioneaza Marian Dusan.

 

Asociatia RBA este o initiativa privata, infiintata de catre Marian Dusan, antreprenor, investitor si economist. Organizatia isi propune sa contribuie activ la imbunatatirea mediului de afaceri din Romania si sa accelereze atragerea de investitii in tara noastra. Misiunea membrilor asociatiei este de a pune laolalta antreprenori, investitori, politicieni, societate civila, cu scopul de a reporni motorul economiei romanesti si de a scoate in evidenta modele de succes din business-ul autohton.

Marian Dusan: The Secret of Debt

Last week we saw Romania’s assessment mission, headed by IMF’s Eric de Vrijer, come to a close. Our country’s review was a fairly positive one, although we did get a lot of homework, not to mention a low grade on the subject of proper conduct.

The majority of the initiatives suggested by our government were either rebuked, or postponed for 2013 or later.

IMF’s main objective is easily understood: starting this year, Romania will have to begin making back payments from the 20 Billion EUROS loan taken in 2009. The most difficult will be the year 2013 when our country will have to reimburse up to 5 Billion EUROS, which means almost 4% of Romania’s GDP. IMF cares for one thing only: not to lose out on the amounts loaned, and therefore they will be keeping us and our expenses under a tight leash so that we may pay back our debts as soon as possible.

From an ethical standpoint, this is the right thing to do, since we should return all the money we have borrowed. However, from an economic standpoint, it is easy to see that the payback will slow down our own economic growth. I am not speaking against the decision to take out this loan – at the time, it was the only option. 2009 was a critical year, with enormous pressure on the Romanian and international banking systems, and therefore at the time, this loan was the only thing keeping the Romanian currency from collapse.

However, I’d like to let you in on a little secret: smart countries ALMOST NEVER pay back their loans. You may find this strange, but money has two values: a nominal value and a real value. The nominal value of 1000 RON for instance, will remain fixed in let’s say 30 years’ time, when 1000 RON will still mean 1000 RON.  The real value on the other hand, is a completely different matter: right now with 1000 RON one can purchase a cart full of grocery goods. 30 years from on, we’re lucky if we’ll be able to afford just the cart, without any groceries; because as time passes, all monetary value is decreased due to inflation, and the purchasing power for each monetary unit is constantly decreasing with it. But how can one not pay back a loan? Simple: you just roll over the debt until its nominal value will be so low that it will mean next to nothing. There are however, two essential conditions that have to be filled: the interest rate has to be lower than the inflation rate, and the amounts borrowed would have to be invested in organic growth. If I’m only borrowing money for domestic spending, then I am heading straight for bankruptcy.

So what should the Romanian government do? Obviously, to refrain from pushing the country to meet the payment deadlines in the coming months. Furthermore, this step has already been taken as a new credit line has been opened to Romania and I bet that it will be already used by 2013, at the latest. And please remember that next year we have to pay back 5 Billion EUROS. In my opinion, the IMF debt should never be paid back, but permanently rolled over until inflation can “take care” of the problem for us.

There is one more issue: using at least some of the borrowed funds to create economic growth. This means that the government has to redirect money towards investment. Unfortunately, this is the very chapter where our government has had very poor results, at least thus far. The economic scandals, the campaign socialist promises (luckily they were only promises), the disrespect of state institutions have created an anti-business image for the USL government. The current Romanian debt is not very large, but it cannot be paid back without significant economic sacrifices. The management of said debt entails wisdom and a long-term strategy. Its failure will mean sentencing Romania to a long, long time of economic standstill, as we cannot grow out of debt. Its success will mean a rate of economic growth superior to that of inflation rates and paid interest rates.

So to all you decision-makers and voters out there: choose your actions wisely, especially on

Marian Dusan: Secretul datoriei

Saptamana trecuta s-a incheiat misiunea de evaluare a Romaniei de catre FMI condusa de catre Eric de Vrijer. Tara noastra a trecut in mare cu bine testul, insa a primi multe „teme” de facut pentru acasa plus si o nota scazuta la purtare.

Majoritatea masurilor pe care le-a anuntat guvernul au fost fie respinse fie amanate pentru 2013 sau mai tarziu.

Principalul scop urmarit de FMI este insa usor de inteles. Din anul acesta, Romania va trebui sa ramburseze din creditul de 20 mld Eur luat in 2009. Cel mai dificil moment va fi in 2013, cand vom avea de returnat 5 mld Eur, aproape 4% din PIB. FMI doreste un singur lucru: sa nu piarda creditele acordate, asa ca va „pune bicul” pe noi si ne va mentine cheltuielile la un nivel suficient de scazut cat sa putem sa ne achitam obligatiile.

Din punct de vedere etic, este un lucru corect, pentru ca am luat bani pe care ii vom returna. Din punct de vedere economic, ne va incetini insa cresterea economica. Nu contest decizia de a ne imprumuta, la acel moment fiind singura solutie. 2009 a fost un an critic, in care presiunea pe sistemul bancar a fost imensa atat in Romania cat si international, asa ca la momentul respectiv creditul acesta a fost singura solutie pentru a preveni o prabusire puternica a leului.

Vreau insa sa va spun un secret: Tarile inteligente nu returneaza aproape nici o data valoarea sumelor imprumutate. Poate vi se pare ciudat, insa exista doua valori ale banilor: valoarea nominala si valoarea reala. Valoarea nominala a 1000 de lei se mentine constanta si peste 30 de ani, 1000 de lei vor fi tot 1000 de lei. Valoarea reala este insa cu totul altceva: acum, cu 1000 de lei putem cumpara un cos de produse. Peste 30 de ani, cu 1000 de lei vom fi norocosi daca vom mai putea cumpara doar cosul, fara produse, pentru ca in timp, valoarea reala a tuturor monedelor este erodata prin inflatie, iar puterea de cumparare a unei unitati monetare, scade constant. Cum poti insa sa nu returnezi sumele imprumutate? Simplu: rostogolesti datoria pana cand valoarea ei nominala va fi suficient de mica si nu va mai reprezenta nimic. Exista insa doua conditii esentiale: dobanda sa fie mai mica decat inflatia si sumele imprumutate sa fie folosite pentru dezvoltare organica, adica investitii. Daca ma imprumut doar pentru a consuma, atunci nu fac decat sa ma indrept cu pasi mari spre faliment.

Ce ar trebui sa faca guvernul Romaniei? Evident sa nu forteze tara sa ramburseze sumele scadente in perioada imediat urmatoare. De altfel, acest pas a si fost facut: o noua linie de finantare este disponibila Romaniei si as paria ca cel mai tarziu in 2013 va fi folosita; nu uitati, la anul avem de rambursat peste 5 mld Eur. In opinia mea datoria catre FMI nu ar trebui platita ci permanent rostogolita astfel ca in timp inflatia va rezolva „problema”.

Mai ramane doar un singur aspect: folosirea macar partial a sumelor atrase pentru a genera crestere economica: adica, guvernul trebuie sa canalizeze bani spre investitii. Din pacate, la acest capitol actualul guvern a produs performate foarte slabe, cel putin pana acum.  Scandalul economic, promisiunile (bine ca in mare doar promisiuni pana  acum) electorale socialiste si nerespectarea institutiilor de drept au creeat o imagine profunt anti-business a guvernului USL. Datoria actuala a Romaniei nu este una foarte mare, insa nu poate fi platita fara sacrificii mari din partea economiei. Gestionarea ei presupune inteligenta si un plan de actiune pe termen lung. Esecul va insemna condamnarea Romaniei la o perioada indelungata de stagnare eocnomica, pentru ca nu vor reusi sa crestem din datorie. Reusita ar fi o crestere economica peste nivelul dobabzii platite si al infaltiei.

Asa ca alegatori si guvernanti: alegeti-va bine pasii, mai ales cei pe termen lung, pentru ca miza e foarte mare.