The Americans are Coming

Motto:

If it works here, it ought to work there

United States & World Affairs

Professor: Philip Golub

Student: Sarah Musaev

ID number: a87712

The American University of Paris

Contents:

Abstract

1. Democracys Preconditions & Romanias Transition to Democracy

2. Romania in the context of Eastern Europe

3. Conclusions and Critique

Abstract:

This paper intends to reflect numerous aspects of Romanias post-communist journey to democracy within the larger context of the Eastern Block. It will exemplify the role of the United States throughout its first crucial transition years (primarily from 1989-1998).[footnoteRef:1] Numerous modifications adhered to the economic and legislative sectors during that time, which had visible long term repercussions. These adaptations were noticeable through the coalitional approach that the United States took towards democratizing the region, attempting to instill progressive and western principles. To fully comprehend the situation, the structure of this essay will take you through an analysis of the required preconditions, the overlooked social and structural factors which have proven to be pivotal for a functional democratic society. It will be followed by a section emphasizing the United States influence and interests until 2004, and include a comprehensive analysis of the economic sector starting 1989 until 1996. This papers purpose is to exemplify the strategies that were applied throughout the region and concur the unfounded approach that the United States took within the region (focusing primarily on Romania). This will be proven by examining dynamics and tactics that the US used within the 3rd wave of democracy and propose a more inclusive and lucrative method that should have been regionally applied rather than locally. [1: Note*- These will be the only years discussed as I am primarily focusing on US involvement- IMF agreements began in 1998 (when Romania accepted Article VIII obligations) - European Union began in 1999. The argument highlights the USs approach and why its policies towards the region were not uniform and what they should have been, hence the emphasis on those years. ]

1. Democracys Preconditions & Romanias Transition to Democracy

This section is included to delineate the numerous prerequisites for a western democracy and why Romania adjusted these principles through a unique application. Moreover, this segment will put Romania within the context of alternative forms of democracy and show why applying this model, without adhering to the transcribed principles, alters the functionality of the state. Moreover, it will highlight the external and internal motivations towards democracy, as well as the numerous mistakes and impasses the country reached from 1989- 2000.

December 25th 1989 marked a historical tipping point and paved the way for the future of Romanias social and political arena. It was the last removal of a communist ruler under the Warsaw Pact and exemplified one of the most violent uprisings in Eastern Europe. This event marked the beginning of a long and tedious process of political, social and economic reconstruction meant to comply with the mechanical conditions of competition in a rapidly globalizing world. Beyond the formal features of the new political ordinances, we should emphasize the substantial characteristics of Romanian democracy, as understood and applied within the society (which somehow contrasts with the western model).

Originally, most political science researchers accept the idea that: throughout history, democracy has not been a systematically imposed regime; instead, it can be viewed as accidental manifestations in the elongated timeline of undemocratic regimes. In many cases democracy was established and seen, as an alternative to authoritarian or totalitarian regimes; this may be described as the "waves of democracy. This 3rd wave that Huntington refers to is the emergence of the Eastern block and the various structures adapted within different states.

The particularity of the Romanian case offers a unique perspective on democracy and how its configuration varies. After the devastating experience of communism (which was renowned for prohibiting any rights and individual freedoms), Romanians saw democracy as a faultless regime alternative. They viewed this as a chance for great potential opportunities, personal and collective aspirations, and an end to domination over the masses and a classless society.

However, history proved that democracy was not as impeccable as the Eastern Block had imagined; but it was perfectible, meaning that, through continuous efforts, collaboration, development and advocacy for open dialogue between the state and civil society, a version of faultlessness could be achieved. Thus, the state & civil society faced a complex and tedious process with various dimensions that eventually took the form of democratic consolidation.

What was the common image of democracy, framed in patterns and stereotypes, according to the Romanian communist perspective? The post-communist experience illustrates a somewhat distorted image. Democratic consolidation was largely and systematically confused by the media with transition towards capitalism, therefore presented in a negative light, as a process that will continue "indefinitely". Transition refers only to the transition from one regime to another, whereas democratic consolidation is associated with a number of characteristics of an effective and substantial democracy, which exceeds formalism and is rooted in the collective mind through a series of institutionalized practices and beliefs: free elections, rule of law, civil society, political society, pressure & interest groups.

The revival of Romanian democracy is closely related to the resizing of the political class. In a critique on "the democratic legitimacy of democratic transitions" Barabu notes that "after 1989, the Romanian society rediscovered the road of anomie as well as the lack of public accountability for decisions and for the common good, which was forcefully taken by totalitarianism."[footnoteRef:2] [2: Barabu, Daniel, The Absent Republic; Politics and Society in Post-Communist Romania, Bucharest, 2005, pg. 20]

In addition, "the remnants of totalitarianism did not give birth to democracy"[footnoteRef:3], but it rather resulted in a hybrid and fragile political regime, whose institutions had to continuously receive lessons in democracy and had not properly instilled them into the legislative and political arena. Politicians "resorted to the denial of communism, as a way to refuse acceptance of their re-modeled careers, which were initially appointed as a result of selection criterion based on their declared loyalty to ideology and/or the social state institutions.[footnoteRef:4] [3: Ibid, Pg.19] [4: Ibid, Pg. 15]

This resurfaced the topical issue of morality and ethics in politics, putting into question the right of those individuals to "serve" the theory of democracy and collective freedoms. Here lies the foundation and origin of the States political immaturity, the lack of democratic experience, acceptance and a destabilized governmental structure due to increased corruption inscribed within the culture.

"Rekindled lamps that shined across Europe"[footnoteRef:5] created the premise and precondition of Romanian democratic consolidation, although a major visible disadvantage persisted: the lack of a well-founded political class with aspirations attached to democratic principles. [5: Darnedorf, Ralph, After 1989, The Morals of civil society, Bucharest, 2002, pg. 70]

According to researchers Linz and Stefan, the factors that shape and reinforce democracy are: "the expansion of a free and vigorous civil society", "a relatively autonomous political society" an active existence and manifestation of the "rule of law" - which "protects individual freedoms and associational life, followed by the establishment of a state bureaucracy at the disposal of the new democratic government "and, not least," there must be an institutionalized economic society.[footnoteRef:6] The political arena and civil society have perceived and often applied these conditions in contradictory ways, causing a profound rift in conceptions expectations, and results of democracy, these two social entities are found mainly in conflict and exclude any form of mediation, communication and dialogue. [6: Juan Lintz & Alfred Stefan, Towards Consolidated Democracies, Wayne State University, 1996, pg. 2 ]

What is civil society and what role does it fulfill in a consolidated democracy? The theorists also refer "to the arena of society where individuals, movements and groups, with their own and relatively autonomous organization, attempt to articulate values, create associations and solidarity and promote their interests. Civil society can include many social movements (eg, feminist groups, owners' associations, religious groups and organizations of intellectuals) and associations from all walks of life (such as trade unions, business groups and professional associations)"[footnoteRef:7]. In Romania, the established civil society after 1990 was represented by the intellectual elite, who repeatedly preached towards detaching the communist nomenclature from the political arena; the materialization of these ideas was seen in the "Piata Universitati Phenomenon"[footnoteRef:8] (anti-communist riots, street movements which occurred months after the collapse of the Soviet Union) in 1990. Subsequently, the intellectual protest movements faded to an almost complete dissolution due to growing distrust and lack of hope in political representatives. In addition, the convictions, for which they had once campaigned for, found no echo within the greater public, whose freedom of thought and expression had been diminished and oppressed for many decades due to communist censorship. [7: Ibid, pg. 9] [8: Bogdan Voicu, Sociological Aspects of 1990 Piata Universitati Riots, University of Bucharest, 2011]

The second component of democratic consolidation is the political society, which reflects "the arena where political actors compete for the legitimate right to exercise control over the government and the state apparatus. By itself, civil society can destroy an undemocratic regime, but democratic consolidation (or even the whole democratic transition) should involve political society. Strengthening democracy requires publics to develop an appreciation for the central institutions of a democratic political society - political parties, parliament, elections, electoral rules, political leadership and alliances between parties."[footnoteRef:9] In this case, post-communist Romanian experience proves otherwise and shows a serious crisis of public confidence, in relation to the political class. An evident feature seen not only in Romania, but throughout Eastern Europe as a whole was the large capital trust in the Church; where government was not regarded as the backbone of society, but rather seen as an extremely flawed game of interests; for Romanians, politics was identified as a means of parvenu, not a means of representing the interests of the wider community through the act of governance and management. As stated by Barabu, "politicians are kept away from the presumption of responsibility" and do not understand their primary role, which is to serve public interests through legitimate means and established institutions. [9: Juan Lintz & Alfred Stefan, Towards Consolidated Democracies, Wayne State University, 1996, pg. 6]

"Rule of law" is the third factor that shapes democratic consolidation. It is still (for the most part) a largely underdeveloped domain unknown (un-respected) by a majority of the social and political class. For this principle to prosper both areas of society are responsible for respecting and adhering to certain laws and norms, whose purpose was to maintain individual freedoms without infringing upon others and impose the states authority. Replacing arbitrary structure with cohesive laws was a vast challenge for the society, although the initiative should have fully belonged to the politicians. This disorder and unbalance reflected the need for Rechtsstaat, as an organizing element for social relations. The concept of rule of law should be instilled in the bureaucratic structure because "the more state institutions operate on the principle of rule of law, the higher the quality of democracy and social satisfaction"[footnoteRef:10]. The term "bureaucracy" often means a difficult operation of public institutions, a specific aspect of local post-communist democracy. [10: Ibid, pg. 8]

Establishing a coherent system of checks and balances of bureaucratic bodies within the rule of law is paramount, as "constitutionalism and the rule of law must decide what public office positions shall be filled by electoral procedures, as well as a clear definition limiting their power so that the public will trust, participate and accept the results of the democratic game."[footnoteRef:11] Nevertheless, if this principle is not respected, as seen in Romania, the consequence is a dramatic drop in citizens' interest in politics and governance. [11: Ibid, pg. 11]

In fact, this disinterest stems in unfounded public expectations of each party to deliver what the previous political party could not; otherwise, there is no continuity: in all election campaigns, each party proposed to remove the "evil" created by the predecessors, criticizing indiscriminate mistakes made by others and speculating lack of maturity of the electorate. In addition, Romanian voters gave "public good" an extremely general sense, every government waiting for a complete fulfillment of electoral promises, without taking into account the socio-political and economic conditions; hence the constant disappointment of the electorate.

Another pillar of democratic consolidation is a "usable bureaucracy" meant to ensure optimally functioning state institutions and their relationship with citizens. The object of all public policies developed by the powers of the state is the citizen (or in this case should be), who, as noted by Barabu, is "an unidentified political object in the horizon of government practices".[footnoteRef:12] Romanian politicians overlooked their responsibility of using their power of decision, for the common interest of the citizens who elected them and whom they represented. [12: Barabu, Daniel, The Absent Republic; Politics and Society in Post-Communist Romania, Bucharest, 2005, pg. 28]

The last condition essential for a consolidated democracy is the economy, which is an arena that should be called economic society. This expression is used to draw attention to two statements that are considered theoretically and empirically sound. First, there has never been and there can be a consolidated democracy that has a command economy (except during periods of war). Secondly, there has never been - and probably never will be a modern democracy that has consolidated a pure market economy. Modern democracies require a consolidated set of rules, institutions and regulations modeled according to a socio-political level - that Linz and Alfred call "economic society"[footnoteRef:13] which mediate the relationship between the state and the market. In Romania, the transition from a command economy to a market economy, from a communist regime to a democracy presented serious difficulties, such as: the dubious privatization of large industrial enterprises, uncontrolled growth of inflation, the lack of an effective social security system and slow dispersion of foreign capital, due to the improper involvement of politics in the economy. Efficiency of the market economy is guaranteed by the institutionalization of the proper operating rules, for the supervision of economic operators of the state and ensuring free enterprise within comprehensive laws. [13: Juan Lintz & Alfred Stefan, Towards Consolidated Democracies, Wayne State University, 1996, pg. 5]

Every way we analyze the problem; democratic consolidation requires political institutionalization of a regulated market. This demands an economic society which, in turn requires, an effective state.... Understood correctly, democracy is more than a political regime; it is a system based on interdependence."[footnoteRef:14] It is about political and economic cooperation, in which the first element creates a framework of operation for the second. Since 1989, Romania has faced a gradual liberalization of the economy, reflected in the decline in state intervention and massive economic diversification. On the other hand, an influence of politics on the economy, especially from the doctrinal perspective was inevitable: leftist governments primarily focused on social measures, whereas the conservatives aimed at developing free enterprise and competition, with varied effects on diverse social classes. [14: Ibid, pg. 6]

Romanian democratic consolidation was clearly influenced by externally driven economic developments, as it will be seen within the following sections. "The widely held opinion is that, economic reform and privatization can legitimize new democracies; these claims are based on the hypothesis which argues that economic improvement can be achieved by simultaneously installing and legitimizing democratic institutions.

It is believed that in countries with command economies in order have, in the past, collapsed from the inside, therefore democratic politics can and should be in place, legitimized by a variety of other reforms that are to be made before the possible benefits of a market economy could fully materialize. (...) Thus, the measures taken in Central and Eastern Europe, strongly sustain the argument that satisfaction and confidence in the future are possible even when there is a delay in a recognized economic improvement.[footnoteRef:15] [15: Ibid, pg. 13]

Rapid simultaneous results seen from the economic and political sector are indeed difficult, although within the region they are not widely perceived as a necessity. These statements are valid in the case of Romania, where there are parallel reforms both economic and political, but citizens' expectations are very broad and vaguely expressed, they are mainly related to raising the living standards and the accountability of politicians, rather than national economic growth. The natural evolution of the economy was and still is overshadowed by widespread corruption; this is manifested in all social constructs, decision-making power is hindered by traffic of influence within the political arena. This is primarily due to the lack of motivation and existence of comprehensive lobbying laws, which would instill a limit and define the relationships between the politicians and interest groups.[footnoteRef:16] (There were 5 consecutive inefficient attempts at modifying this discrepancy, and currently in 2015 there are still no descriptive laws in place monitoring this area). [16: Please refer to Lobbying Regulations in Romania by Sarah Musaev]

Unfortunately, Romania has only mildly adapted some of these norms and consequently has severe structural issues, which are visible in a lengthy analysis. The root of the problem lies in the fact that, for a country to progress towards democratization it must first resolve the core organizational aspects in an all-encompassing fashion; otherwise, adhering and altering according to international or any external concessions before resolving this, disturbs the fabric of the model and becomes further damaged. Accordingly, the following section will reflect the bilateral relationship between Romania and the United States; this part will concentrate on the rapid and unfitting agreements between the two nations. Moreover, it will reflect the various effects that the US influence and approaches have had throughout the region.

2. Romania in the context of Eastern Europe

As seen in the past century, Romanian and United States relations have progressively deepened; they officially began in 1890, diminished during the cold war and rebirthed after the end of the communist regime. To better understand this section, please refer to Annex 1 for the timeline of events, Annex 2 for the bilateral agreements, which have transcribed until 2004 and Annex 3 for the yearly trends of imports-exports, inflation, debt & GDP to better understand Romania situation. The correlation is explicitly stated at the end of Annex 3. This section will also highlight the dimension of US involvement throughout Eastern Europe at the time. This segment is paramount to better understand USs approaches within the Eastern Block and how they were disjointed.

After the collapse of the Soviet Union and revolutions throughout the Eastern Block, the drastically dissimilar countries faced a pivotal moment, which determined their future. Over the transition years, countries such as Hungary, Czech Republic, & Poland, faced a more rapid de-communization process and progressed at higher rates than Romania.

15 years after the fall of the Berlin wall, many of the ex-communist countries have made remarkable advancements towards a free market economy and a pluralistic economy. Nevertheless, even within the countries that have attained the highest success rates during the transition process, there is still need for structural, political and economic reforms, as those aspects have never been fully accounted for, within the primary years of the changeover (as seen in all Eastern countries). Although economic growth in the region grew at a constant rate, recorded progress within the domain of economic reforms drastically varied, as each country adopted different approaches, policies and aid programs.

For Romania & Bulgaria; notable reforms were made to create a free market economy, these two countries achieving great steps towards banking, infrastructural reforms and privatization; although they lagged behind on many aspects of organizational measures, they mainly focused on economics rather than socio-political relations. One of the reasons for this similarity between Romania & Bulgaria is due to the fact that they both had the most oppressive and harshest communist system within the region (much like North Korea).

Now, where does the US fit into all of this? The United States were and still are the only country in the world that declared their duty to globally spread western principles and democracy in its purest form. At the time, this part of the world faced a dilemma when choosing between adhering to progressive capitalism or alternative governmental structures based on their existing incapability of competing with the real capitalist countries. Western actions and involvements within- South America, South East Asia, the Middle East and Eastern Europe- were intended to promote change (ex. Privatization programs, fiscal controls, aid programs, tax laws, etc.) for better democracies. Those regions faced an external push and massive pressures for policy change, as it is widely known that generally, policy diffusion alters payoffs for non- adopters.[footnoteRef:17] Furthermore, Eastern countries looked for guidance from the worlds most efficient democracy; this was the underlying reason for their eagerness to trade off short-term benefit policy vs a long term one. [17: Jeffrey Kopstein & David Riley, Geographic Diffusion and the Transformation of the Post communist World, 2000, pg. 32]

The US were known to have varying approaches towards the region, ranging from- coalitional, inspirational, subsidiary, depending on the respective field of influence.[footnoteRef:18] Many of the tools the US used to perpetuate and assure their position were broadcasted on a local or state level, tools such as: financial aid, expanding markets, normative pressure, partnerships, purchasing state industries, technical assistance, push for lending credibility and promises of membership benefits; these were strategies used to persuade states into adhering to favorable outcomes. Moreover, few theorists have discussed democracy building and economic programs within the region, such as Carothers and Wedel. [18: Marc Howard, The Weakness of Civil Society in Post Communist Europe, New York, 2003]

The Clinton presidency partially integrated some of these strategies into the South East Europe Plan which was split into three categories: extending bilateral cooperation on a political, economic, social and military plan; push for regional cooperation and thirdly building a plan with the EU countries for eastern integration and thus strengthening Euro-Atlantic relations.[footnoteRef:19] Lending credibility was a technique widely used during that time, which persuaded the IMF to soften conditions for countries such as Poland, Hungary, Czech Republic and the Baltic States that received considerable aid in the early 90s. [19: Radovan Vukadinovi, U.S. Policy in the Southeast Europe, Vol. XXXV, Zagreb, 1998, pg. 92]

The IMF cooperation with Romania was regarded as an alternative for a much-needed internal reform (that largely decreased its credibility at the time), whereas Russia and Ukraine had slowly progressed, as external subsidies and massive aid eliminated the motivation of adhering to reforms.[footnoteRef:20] Moreover, many countries struggled with meeting the conditions for admittance within the European Council and the Organization for Security and Cooperation in Europe. Although aspects such as: minority rights, education laws and penal codes were overlooked, countries were permitted to join due to the USs push. These conditional tactics proved later to be beneficial in the short term, regional policy was decentralized and it drastically varied; and it is nowadays reflected in the unresolved setbacks that each country currently faces. [20: Elaine Stone, Transition Banking: Financial Development of Central and Eastern Europe, 2000]

Wedel argues that US aid was rather parsimonious, disjointed, inept and fixed therefore she considers it to have been an inappropriate third world aid model.[footnoteRef:21] This aid essentially substituted local reform that all countries lacked (some more than others). The approaches mentioned above have had notable effect on Russia, due to the monopoly of USAID with president Yeltsin, that was built on the oligarchy of elites (which is still a prominent aspect of Russian society today), gradually deepening the gap between classes. The western vision and uninspired domestic reforms adapted in Russia visibly damaged the economy and democracy process (the Yeltsin government adopted fiscally irresponsible reforms which led to a dramatic fall of the Rubble in 1998)[footnoteRef:22]. [21: Jeanine R. Wedel, Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, 2001, pg. 25] [22: Donald N. Jensen, How Russia is Ruled 1998, George Washington University, 1998, pg. 32]

On the other hand, a successful example at the time can be seen in the Czech Republic where the US intervention helped build core institutions and paved the way for long-term progress.[footnoteRef:23] US programs established decentralized aid, and a coherent Rule of Law in the country. This was possible due to the countrys history, traditions and pre-established legislative system, which is unlike any other in the region. [23: Thomas Carothers, Aiding Democracies Abroad, 1990, pg. 6-8]

Fundamental differences in the region are also critical to understand why the USs approach in the region was flawed and why it wasnt sustainable long-term. Poland has always had a privileged status in the eyes of the US; as a Catholic nation it received substantially more aid from the Catholic Church and US institutions. Eastern Germany (DDR) was a special case as well, as it successfully integrated and was assimilated within the progressed Western German system, the unification therefore made the transition much less difficult. Hungary deviated and adapted extreme right policies attempting to reestablish its historical roots in the Austro-Hungarian Empire.

Romania on the other hand was the only Eastern Latin country that was Greek Orthodox, therefore unlike Poland, it did not receive similar treatment, and therefore it is an atypical example. Moreover, Romania had no enlightened, reform-oriented faction within the party elite to promote a negotiated transitionhad no collective leadership, no inner-party life and no genuine feedback from lower to higher echelons. Ceausescu had isolated Romania from both the East and the West.[footnoteRef:24] [24: Vlad Tismaneanu, Romaniss First Post-Communist Decade: From Iliescu to Iliescu, Global Europe Program, 225, Wilson Center]

Conclusion & Critique:

To conclude these findings, as Linz and Stefan discussed, there are six aspects of democratic consolidation, which cannot be omitted before engaging to external and international demands. For a state to function and prosper it must first have: a prosperous & free civil society, a relatively autonomous political society (with clear communication & trust between the two), Rechtsstaat, an establishment of state bureaucracy & an institutionalized economic society. These prerequisites create the foundation and guidelines for a progressive and modern state; if one of those conditions is missing the state develops small fractures that would collapse the system from the inside out.

As seen in the case study of Romania (and then extended to the Eastern Block) the United States delineated drastically different approaches, focusing mainly on attaining geostrategic, military and economic advantages. Their policies and requirements from the region were fragmented, which had subliminally paved the way for massive dependence on US aid and policy advisory. Dependency theory and Dahls theory of power are undeniably visible in this case as: A gets B to do C which B otherwise wouldnt have done, also known as voluntary submission.

With that being said, Huntington sustains that American ethics combine issues of security with ethical ones, as it generally tends to maintain equilibrium between defense capabilities and arrangements. The US is an influential and dominant country, whose foreign policy is primarily focused on economic interests and lobbying groups rather than geopolitical strategies. Brzezinski disagrees claiming that a majority of Americas actions within the region were geopolitical, as Eurasia is the most geostrategically important area and that the USA wouldnt have the same impact on the world as a whole, if it didnt pursue that angle.

At the time the US claimed that they aimed to enhance profit, power and prestige and spread democracy throughout the region; although it seemed more as a form of capitalist colonization, as their promoted policies focused mainly on progressing economic reforms (and military agreements) more so than any other. After 1945 the United States acted in a rational, geostrategic and opportunist fashion to spread their reign of global hegemony (thus both Huntington & Brzezinski were right). Nevertheless, by overlooking the structural, historical, cultural, economic and all-encompassing view of domestic factors (I.e. engaging in AID programs and pushing for particular reforms within certain areas), the US legitimized the respective governments actions. Thus, the approach was erroneous, as they overlooked what could have been a momentous historical opportunity in the region.

The unheeded prerequisites caused fragmented divergences, which each country still struggles with like: Russia and its elitist oligarchy, Romania Hungary, Serbia, Croatia, and Bulgaria with corruption, lack of transparency, & discordance between the civil and political class. The United States pushed for change and reform in those countries, but they lacked the proper vision, knowledge of historical grounds, therefore the will and the potential outcome. Instead of pushing for the spread of democracy it seemed as though they were primarily focused on spreading the economic capitalist model within countries that seriously lacked the structure to withstand and compete in the rapidly globalizing world.

This is the end result when external actors push reforms directly and bypass all domestic intermediaries; the consequences were both unavoidable and disastrous.[footnoteRef:25] Likewise, multiple theorists such as Hughes and Phillips agree with this claim, that Western intervention was deemed unnecessary, contested and ineffective. [footnoteRef:26] External influence has real effects within domestic policy, especially in developing countries. [25: Janie Wedel, Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, New York, 2001, Pg. 251] [26: James Hughes,Gwendolyn Sasse &Claire Gordon, Europeanization and Regionalization in the EU's Enlargement:The Myth of Conditionality, 2005, pg. 230]

Moreover the US faced a mentality problem due to a unique model approach- If it works here, it ought to work there. External help (such as the SEED program) can only make so much of a difference; it merely provides a small push for change, whereas if there were qualifications to abide by, perhaps the result would have been different (or set criteria for admission for Eastern Aid program like the Maastricht criterion).

The largely shared opinion within the region is that the angle in which the United States viewed this challenge was unfitting. Feasibly the most logical and enduring model would have been to create a system much like the Marshal plan, with additional qualification material before directly engaging within those states. This model would have influenced an internal push in each country to modernize and adopt suitable legislation in order to adhere to a larger democratization process. Furthermore, an equally fair and regional approach would have been undoubtedly more comprehensive and would have provided more chances for uniformity within Eastern countries, promoting mutual progression and inter-reliance in the region. Reform strategies are empirical and outweigh the importance of actual aid mechanisms. This strategy could have been an all-encompassing solution with large long-term mutual gains, although seemingly it wasnt.

Annex 1: The following annexes are included to highlight the relationship between the relations between 89 to 2004, and correlate them with agreements and adopted reforms. The green represents the connection between the visits and occurrences to laws adopted- the blue section connects visits and occurrences to bilateral agreements between the US & Romania. (Please Note that the information in this timeline was adapted fully from the Romanian Embassys website http://washington.mae.ro/en/node/534) It is merely included to prove the thesis argument.

89'- Dec. 25th marked the end of 42 years of communist rule in Romania- it was the last removal of communist regime under the Warsaw pact, and had a very violent revolution which lasted 15 days.

90'- Feb. Former Secretary of state James Barker visited Bucharest to meet with former P.M Stolojan (from the National Salvation Front- the liberal communist party which instilled itself into power following the revolution until the official May elections- Stolojan remained in office until November of 1992) this meeting was arranged to discuss the impending political and economic reforms

90'- May. Iliescu became elected the first president of Ro, he won with almost 90% of popular vote

90, June. U.S. financial assistance was provided to Romania through the SEED Program, Support for East European Democracies Program, this was administered by the U.S. Agency for International Development and other offices

92'- Mar. Former PM Stolojan commenced some fiscal developments to extend trade relations with the US

93'- US congress supported to restore Ro Most Favored Nation status- This status was granted to highlight evolvements within the governmental and monetary alterations. This status had specific conditions which Romania had accepted

96'- US granted Ro permanent MFN status- This solidified and extended bilateral relations between the two countries

97' - President Clinton visited Bucharest to meet with president Constantinescu- to further discuss cooperation and wide range goals including economic, political and defense reforms

2002- President Bush visited Romania- As its policies became unequivocally pro-Western, the United States moved to deepen relations after Romania joined the War on terror following the 2001 Sept. 11th attacks. This accelerated Romanias entry into NATO providing the US with troops to show support in Afghanistan.

- Moreover, Bush congratulated the Romanian people on their progress towards building democratic institutions and a market economy following the fall of communism.

2004- Romania formally joined NATO, in 2004 Romania agreed to contribute funding of 2% of their GDP per year (whereas the US funded 73% at the time). Share agreements have changed bi-yearly following their accession. Currently Romania is currently the 16th highest contributor to the NATO budget after Denmark.

Annex 2:

Official agreements between the US and Romania 1989-2001 + Romanian Economic/ Legislative reforms

Note*- The sections highlighted in blue reflect the agreements, which have seemingly correlated with either: decreased GDP, increased inflation, Increased unemployment shown in Annex 3.

Law nr. 15 passed in Parliament in August 1990 (adopted 6 months after former secretary of state James Barkers visit, and after US financial assistance through SEED program) - on the reorganization of state economic units as autonomous and relations with international companies. This law was the first adopted to delineate regulations of privatization

Agreement on Peace Corps programs in Romania (signed at Washington, January 24, 1992)

Agreement between Romania and the US on stimulating investments (signed in Bucharest on 30 June 1992)

Agreement between Romania and the US on trade relations (signed in Bucharest on 3 April 1992 entered into force on 8 November 1993)

The bilateral treaty on encouragement and mutual protection of investments (signed in Bucharest on 28 May 1992 entered into force on 15 January 1994)

Law nr. 58 passed in Parliament in July1993 (adopted after the 3 previous economic agreements, and after MFN status) - empowered the Government to issue ordinances, contracting licenses and guarantee of external loans and contracting of state loans. Law 15 & 58 created the foundation for foreign investment and privatization- in 1995 these laws were applied in full effect and mass privatization of local and some state companies had progressed- the process is continuing to this day.

Agreement between Romania and the US for the protection and preservation of cultural goods (signed in Bucharest, July 8, 1992)

Agreement between the Romanian Government and US Government assistance programs on economic, technical and related matters (signed in Bucharest on 24 October 1995 entered into force: 1 November 1996)

Agreement between Romania and the US in countering the proliferation of weapons of mass destruction and promotion of defense and military relations (signed in Washington on 30 March 1998)

Agreement between Romania and the US Air Transport (signed in Washington on 15 July 1998 entered into force: August 19, 1999)

Agreement between Romania and the US on peaceful applications of nuclear energy (signed in Washington on 15 July 1998 entered into force: August 25, 1999)

Agreement between Romania and the US on mutual assistance between customs administrations (signed in Washington on 15 July 1998 entered into force: June 1, 1999)

Agreement between Romania and the US on scientific and technological cooperation (signed in Washington on 15 July 1998 entered into force: April 5, 2000)

Agreement between Romania and the US on educational and scientific exchanges managed by the Romanian-American Fulbright Commission (signed in Bucharest, October 26, 2000)

Treaty between Romania and the US on Mutual Assistance in Criminal Matters (signed in Washington on 26 April 1999)

Additional Protocol to the bilateral Treaty on encouragement and mutual protection of investments (signed in Brussels on 22 September 2003, entered into force on 9 February 2007)

Agreement between Romania and the US on the status of US forces in Romania (signed in Washington, October 30, 2001)

Annex 3: These graphs portray Import-exports, Inflation, external debt and GDP until 1996. At the bottom of the graphs there is a brief explanation on the correlations between agreements/ legislation and changes within those respective areas.

GDP and Inflation from 1989- 1996

In the chart above, you may notice the direction in which the Romanian economy went after the revolution. By 1992, GDP fell by almost 40 % and industrial production fell by over 45 %. The economy had recovered slightly after 1993 but after 1996 it followed a rapid fall. Until 1989, Romania's external debt was paid almost entirely, but during this period, it increased to more than eight billion USD within 7 years. Inflation had reached alarming proportions. The Leu (which is the currency used prior to 2001) to the $ rose from 14 lei to 1 USD in 1989 to 3,000 lei to USD in 1996

Imports and Exports from 1989-1996

The lack of competitiveness of Romanian products on foreign markets and abolition societies had led to a declining state until 1991. Romanian exports fell by over 50 % and by 1996, imports increased by over 30%, producing a shortage of foreign currency.[footnoteRef:27] [27: Note*- in 1990, Romania: 1) Produced one of the only long distance airplanes in the world (the Rombac), 2) Had an advanced electronic industry- produced computers (Felix), 3) Manufactured two automobile brands sold throughout Europe (Dacia & Aro), 4) Produced Trucks, tractors, busses, trams, trains, 5) Prior to 89 t had the 3rd largest fishing fleet in the world and one of the largest naval construction sites on the Black Sea, 6) had one of the most powerful European petrochemical and chemical industries, 7) A very large pharmaceutical industry which exported throughout the Eastern Block during communism, 8) a prosperous agricultural sector which exported throughout Europe (no other country in Eastern Europe except Russia- had the know how & the industrial capacity as Romania). In less than 5 years all of the industry with the tacit accord of the US seemingly diminished as a systematic programed dismantling process due to competition with neighboring countries. Romania knowingly assisted in the destruction of the industrial tissue due to domestic structural and ethical discrepancies.]

Unemployment Rates From 89-present

Romanian Unemployment rate in 1989 was at 3.4% with a population of 23.16 Million at the time. By 1992 the rate doubled and the population declined to 22.97, 1993 unemployment triples to 9.296 % 22.76 million. But the unemployment rate in Romania was as high as 12% in 1999 with a population of 22.47 million [footnoteRef:28] [28: Note*- part of the issue was the fact that emigration grew, industries collapsed; unemployment rose and the demographic equilibrium had progressively changed (the Roma population remained and grew, whereas the intellectual and financially stable elite immigrated to bordering countries due to deteriorating conditions). Moreover, it is noteworthy to understand that the declared unemployment rates do not portray the reality, as thousands have not declared emigrating and many worked within the countrys large black market- not declaring their financial attributions or working status. ]

Ro's National debt following 89'

During these years the largest problems, which had affected the economy were those related to loss of markets for local products- especially agriculture. This was driven by external economic forces and a betrayal of national economic interests by politicians for their own private interests. Romania had lost large traditional foreign markets, such as the Russia, China, the Middle East, & some African countries, because they did not have the pre-requisites for an expansionist market. Hungary, Czech Republic and Poland all faced similar problems with their transitions to a free market. The United States as well as Canada have profited immensely from privatization in Eastern Countries during this time frame[footnoteRef:29]. Private investments went up and lobbying firms entered in the Eastern political arena, therefore states lost/sold valuable state resources. Currently Romanian National and private debt amounts to 94.2 billion (national debt is at 76.66 billion). Moreover, according to UNCTAD, World Investment Report, 2006 Romanias FDI increased drastically from 1989-98 due to economic reforms, privatization legislation and privatization within the state sector[footnoteRef:30]. [29: Note*- An example of US profits and lobbying groups are seen in the case with Dick Chaneys Halliburtons subsidiary company Bechtel. During the late 1990s (early 2000s) the corporation energetically destabilized Eastern countries (close to Russia) to create dependency and to have influence in those economies. Moreover it privatized Romanias largest highway Autostrada-1] [30: Maria Birsan & Anuta Buiga , 0FDI in Romania: Evolution and Main Types of Large Firms in the Manufacturing Sector March 2008, OECD report]

-------------------------------------------------------------------------------------------------------

Bibliography

Barabu, Daniel, The Absent Republic; Politics and Society in Post-Communist Romania, Bucharest, 2005

Darnedorf, Ralph, After 1989, The Morals of civil society, Bucharest, 2002

Juan Lintz & Alfred Stefan, Towards Consolidated Democracies, Wayne State University, 1996

Bogdan Voicu, Sociological Aspects of 1990 Piata Universitati Riots, University of Bucharest, 2011

Jeffrey Kopstein & David Riley, Geographic Diffusion and the Transformation of the Post communist World, 2000

Marc Howard, The Weakness of Civil Society in Post Communist Europe, New York, 2003

Radovan Vukadinovi, U.S. Policy in the Southeast Europe, Vol. XXXV, Zagreb, 1998

Elaine Stone, Transition Banking: Financial Development of Central and Eastern Europe, 2000

Jeanine R. Wedel, Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, 2001

Donald N. Jensen, How Russia is Ruled 1998, George Washington University, 1999

Thomas Carothers, Aiding Democracies Abroad, Washington D.C, 1999

Vlad Tismaneanu, Romainss First Post-Communist Decade: From Iliescu to Iliescu, Global Europe Program, 2002

Janie Wedel, Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, New York, 2001

James Hughes,Gwendolyn Sasse &Claire Gordon, Europeanization and Regionalization in the EU's Enlargement:The Myth of Conditionality, 2005,

www.mae.ro - Romanian Embassy Public database