Ceausescu keeps the money

mack8

After borrowing money from IMF and other western institutions for various economic projects, Romania got in trouble economically due in large part to the oil prices exploding due to the Iran revolution, which caused great difficulties with re-paying in the early 1980. IMF came up with all sorts of demands (mostly centered on austerity, much decreased imports, and limiting industrialization) to reschedule the payments. But Ceausescu found this an affront to Romania's independence and internal affairs, and decided to pay everything ahead of scedule.

For this there were severe consequences for the people (which previously enjoyed prosperity in the seventies), due to drastic cuts on power, heating, food etc, as well as on military so that everything possible be exported to raise money to pay the IMF. This he did by 1989, as much 21 billion, including loans, interest and penalties for paying early (?!) has been paid, leaving Romania with zero debt. This considering Romania's GDP at the time was in the region of 40 billion. But it was too late as the so called revolution happened.

But what if, instead of paying all that huge amount of money, Ceausescu decides to tell the IMF to shove their demands where sun doesn't shine, and keeps all that huge amount of money?

Sure, the western (primarily US as IMF is their tool) bloc will be pissed, but what are they going to do? Romania might be cut off from the western bloc, but there is still the WP as well as China and many other friendly countries to do business with. Most importantly, all those cuts for the people won't happen, so romanians will continue to enjoy relative prosperity. Romania was quite self-sufficient in basic necessities such as food, and indeed they did just fine, as far as a communist country goes, without any significant dealings with the west before the 1970s. So this will remove a large part of the reasons for the 1989 revolution.
 

Ramontxo

Donor
Just a minor question. "The so called revolution" Really?
Ceausescu was an dictator, that is an son of a bitch. And any regime change that send him to meet his creator was (imho) the way to go
 
Nell_Lucifer

Nell_Lucifer

Ramontxo said:
Just a minor question. "The so called revolution" Really?
Ceausescu was an dictator, that is an son of a bitch. And any regime change that send him to meet his creator was (imho) the way to go
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I think he is referring to how the revolution replaced Ceausescu and the Old Guard with Iliescu and the Old Guard.
 

Domrémy-Scorniçesti Axis

Banned
mack8 said:
After borrowing money from IMF and other western institutions for various economic projects, Romania got in trouble economically due in large part to the oil prices exploding due to the Iran revolution, which caused great difficulties with re-paying in the early 1980. IMF came up with all sorts of demands (mostly centered on austerity, much decreased imports, and limiting industrialization) to reschedule the payments. But Ceausescu found this an affront to Romania's independence and internal affairs, and decided to pay everything ahead of scedule.

For this there were severe consequences for the people (which previously enjoyed prosperity in the seventies), due to drastic cuts on power, heating, food etc, as well as on military so that everything possible be exported to raise money to pay the IMF. This he did by 1989, as much 21 billion, including loans, interest and penalties for paying early (?!) has been paid, leaving Romania with zero debt. This considering Romania's GDP at the time was in the region of 40 billion. But it was too late as the so called revolution happened.

But what if, instead of paying all that huge amount of money, Ceausescu decides to tell the IMF to shove their demands where sun doesn't shine, and keeps all that huge amount of money?

Sure, the western (primarily US as IMF is their tool) bloc will be pissed, but what are they going to do? Romania might be cut off from the western bloc, but there is still the WP as well as China and many other friendly countries to do business with. Most importantly, all those cuts for the people won't happen, so romanians will continue to enjoy relative prosperity. Romania was quite self-sufficient in basic necessities such as food, and indeed they did just fine, as far as a communist country goes, without any significant dealings with the west before the 1970s. So this will remove a large part of the reasons for the 1989 revolution.
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Romania likely defaults on its debt, causing Ceausescu to adopt the austerity measures anyway.
 

AzureShogun

Ceaucescu was, like a lot of Dictators, inflicted with a vastly inflated sense of his own competence. I do not think there was a single project or decision he took into his own hands which didn't end up measurably worse off for it.

I'm sure whatever alternate decision he took would have been equally fucked up by experiencing the effects of his incompetence one way or another.
 

Magnum

there would be an economic collapse caused by retaliatory measures:
1698938251898.png

Source: Bogdan Murgescu, România și Europa - Acumularea Decalajelor Economice 1500 -2010

Romanian trade in 1980 was basically split in a 3-way tie between eastern block nations, developed capitalist nations and ”developing nations” (both capitalist and socialist). One of the biggest reasons for the fall in trade with western nations were uncompetitive exports. If Romania defaults on its IMF debts, expect this trade to plummet.
 

mack8

First, i would appreciate if some who post here refrain from political posturing. I'm romanian and i'd like to believe that i know a bit more about the history of my country than someone from far abroad who just reads about Romania from the internet or the CNN or whatever.

In reply to Magnum, interesting table, thanks. But on the issue of trading with the west, since the imports have been drastically reduced (this was also demanded by the FMI), most of the trade was about selling everything and anything of value, to raise money to pay the FMI. This is why there was no food, no power and no heating because everything was sold abroad!

And as can be seen from the table, stopping the trading with the west wouldn't have been a calamity, it would just have to be reoriented towards WP and other friendly countries like it was in the 1950s. But by far the most critical aspect would be NOT selling all the food and coal and so on to get money to pay the FMI. So the people would not experience lack of food, power and heating, since Romania would have been mostly self-sufficient in these domains. This reason alone should have induced Ceausescu to do as my OP suggests.
 
GeekyOwl

GeekyOwl

Banned
mack8 said:
First, i would appreciate if some who post here refrain from political posturing. I'm romanian and i'd like to believe that i know a bit more about the history of my country than someone from far abroad who just reads about Romania from the internet or the CNN or whatever.
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Well as someone from Romania, I think I can speak in saying thay yes as the others have stated Ceausescu was a baboon that more than had the revolution coming, even if it's outcomes were less than ideal due to FSN and Ilici.

mack8 said:
And as can be seen from the table, stopping the trading with the west wouldn't have been a calamity, it would just have to be reoriented towards WP and other friendly countries like it was in the 1950s. But by far the most critical aspect would be NOT selling all the food and coal and so on to get money to pay the FMI. So the people would not experience lack of food, power and heating, since Romania would have been mostly self-sufficient in these domains. This reason alone should have induced Ceausescu to do as my OP suggests.
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You don't just reorient a third of your fucking exports overnight.

Also, not paying your loans is a terrible idea as no one will ever lend you money again. This is a problem given how much loans are important to a modern economy.

If you want what good old Ceasca should have done is not pay the loans off like a maniac in his insane quest for autarky but rather slowly as the IMF actually wanted. That would have prevented the economic issues, though let's be real he would still be doomed come 1989.
 

Catspoke

Ultimately if there is less austerity imposed on the people in the late years of the regime, maybe best case, his regime gets overthrown a month or two or a year later, maybe more peacefully, and he is allowed to live or can flee someplace.

Times being what they are with regime change everywhere else in Eastern Europe, I don't see how Rommania doesn't change as well.

Once Hungary is a free country it seems the issues with the Hungarian minority will get worse as well.

Sure he's got a solid secret police force but is it enough to hold out.

Who really survived the fall of communism. Vietnam maybe, Cuba, China, but their sort of Han Chinese dominated oligarchy thing now.
 

Ramontxo

Donor
mack8 said:
First, i would appreciate if some who post here refrain from political posturing. I'm romanian and i'd like to believe that i know a bit more about the history of my country than someone from far abroad who just reads about Romania from the internet or the CNN or whatever.

In reply to Magnum, interesting table, thanks. But on the issue of trading with the west, since the imports have been drastically reduced (this was also demanded by the FMI), most of the trade was about selling everything and anything of value, to raise money to pay the FMI. This is why there was no food, no power and no heating because everything was sold abroad!

And as can be seen from the table, stopping the trading with the west wouldn't have been a calamity, it would just have to be reoriented towards WP and other friendly countries like it was in the 1950s. But by far the most critical aspect would be NOT selling all the food and coal and so on to get money to pay the FMI. So the people would not experience lack of food, power and heating, since Romania would have been mostly self-sufficient in these domains. This reason alone should have induced Ceausescu to do as my OP suggests.
Click to expand...
I don't know how old are you but I am old enough to have lived in an dictatorship up to my teen years and it was shit. Rumania is very very lucky to have get out of its one.
 

Arthur1994

mack8 said:
First, i would appreciate if some who post here refrain from political posturing. I'm romanian and i'd like to believe that i know a bit more about the history of my country than someone from far abroad who just reads about Romania from the internet or the CNN or whatever.

In reply to Magnum, interesting table, thanks. But on the issue of trading with the west, since the imports have been drastically reduced (this was also demanded by the FMI), most of the trade was about selling everything and anything of value, to raise money to pay the FMI. This is why there was no food, no power and no heating because everything was sold abroad!

And as can be seen from the table, stopping the trading with the west wouldn't have been a calamity, it would just have to be reoriented towards WP and other friendly countries like it was in the 1950s. But by far the most critical aspect would be NOT selling all the food and coal and so on to get money to pay the FMI. So the people would not experience lack of food, power and heating, since Romania would have been mostly self-sufficient in these domains. This reason alone should have induced Ceausescu to do as my OP suggests.
Click to expand...
By mid 70s it was already too late to pivot the economy back to the eastern european countries simply because most of them were also in recession and dependent on western loans to keep their economies running. The only communist economies still standing on their feet by that point were the USSR and Czechoslovakia which were alienated by Ceausescu's previous actions. China was half a world away and still too poor to matter much economically.

The best bet for Romania was to either pay the loans slowly and try to introduce mixed economy reforms like China and Vietnam did latter or remain a typically eastern european communist economy like Bulgaria, subsidized by the Soviet Union. and not take the loans in the first place to heavily industrialize at the worst passible time(the raw materials price highly exceeded the output price)
 
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