New Western Aid Hints Shift in View of Romania as Outsider

BRITAIN has at last admitted Romania to a list of countries whose reforms qualify them for its "know-how fund" for technical assistance, according to a recent news item. It was a first crumb from the Western-aid table for the successors to the Ceausescu dictatorship toppled in December 1989. It was also a hint of changing attitudes on both sides.

Since its revolution, Romania had been excluded by the West from the list of those former Communist countries deserving aid. Its first year was marked not by reform, but by nonstop civil strife, political violence, and strikes against a supposedly reformist but suspected quasi-communist government.

This year started badly. Now, turbulent street protest has subsided but opposition is unabated.

The population at large - suffering less now from shortages than from freed market prices - remains as wary of government assurances as the West has been about its democratic credentials.

Despite a big election majority a year ago, the leaders of the ruling National Salvation Front have yet to win credibility, either at home or abroad.

When Bucharest requested entry to the Council of Europe and "association" with the European Community, both said no - until there is substantive evidence of reform.

Two watchdog groups in the United States were equally cool. The leaders' prime concern, they said recently, seemed to be staying in power rather than promoting democracy.

But several major developments last month - little noted by the Western media - suggest a distinct turn in the right direction.

First was a widely comprehensive foreign investment law, which Western businessmen in Bucharest were quick to say is a "very good" one. It was followed by a related accord with the International Monetary Fund (IMF) for a big aid package.

THEN came an ace for Bucharest - a visit by French President Francois Mitterrand, the first Western head of state to visit since Nicolae Ceausescu's overthrow. Mr. Mitterrand met also with opposition parties, but was apparently unimpressed. He said publicly, "I feel there is a definite return to democracy here, and nothing I have seen or heard causes me to modify that opinion."

Coincident with his visit, a French construction firm announced it was joining seven Romanian companies in building a $110 million international trade center in Bucharest.

Eastern Europe's leaders in democratic reform and transition to a free market already have earned considerable Western support in terms of debt rescheduling and IMF backing (though all are irked by Western slowness with credit and investment).

Politically, Romania is well behind Poland, Czechoslovakia, and Hungary. Its opposition parties, for example, reject government power-sharing offers.

Economically, however, the picture improves. The foreign investment law really does look the most potentially acceptable and least bound by red tape of its kind in the whole area.

Investors may hold 100 percent equity, form new companies or take stakes in existing Romanian ones, and repatriate hard-currency profits. Tax on profits is waived for up to five years.

It is an established Western truism that the two arms of reform, economic and political, are and must be co-dependent, that anyway a market economy just won't work without human rights and an extended political spectrum.

Romanian Prime Minister Petre Roman says his reforms are obstructed by managers and workers who prefer "safe," set ways rather than accepting the price of transition to something more efficient and of ultimate general benefit.

This is nothing new. The East Europeans all face this problem. In a Balkan country it is, inevitably, simply worse. In that context, Mr. Roman's realistically open door to investment warrants perhaps more Western encouragement than just "know how."

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