mercredi 23 février 2011

Sfaturi pentru FMI - incetati sa promovati politici expirate

Fondul Monetar International (FMI) ar trebui sa isi diversifice metodele, sa nu mai dea sfaturi depasite de vreme, sa inceteze sa promoveze politici expirate, sa coopereze cu guvernele tarilor cu care are acorduri pentru imbunatatirea guvernantei intreprinderilor private si de stat, sustin economistii Yvan Allaire si Mihaela Firsirotu, intr-o scrisoare deschisa catre Jeffrey Franks, seful Misiunii FMI pentru Romania.

Citeste articolul pe

lundi 21 février 2011

Advice to the IMF: An open letter to Mr. Jeffrey Franks, IMF representative for Romania

Advice to the IMF
An open letter to Mr. Jeffrey Franks, IMF representative for Romania

Dear Mr. Franks

Here’s some advice to the International Monetary Fund (IMF) which loves to give advice and instructions to all and sundry governments about how to run their affairs. That advice always draws from the same fountain of ideologies, orders the same old, tired, discredited set of prescriptions.

For instance, large scale privatization and deregulation, inspired by the dominant Reagan-Thatcher era ideology, have produced mixed results. Even in the best of circumstances such as in the UK, the outcome has often been disappointing and led to several failures. The British railways are privately run but government-subsidized; the French railways are State-owned. Guess which country has the better railway system. British airports were privatized; yet Heathrow has a dismal performance  record (but investors who bought the shares at the time of privatization made piles of money).

Remarkably, even in the wake of the financial crisis, which has cast a permanent pall on the supposed virtues of “free markets” and “market efficiency”, there remains pockets of ideologues (and self-interested promoters) advocating wholesale privatization of State-owned companies in the developing world.

The IMF has been a haven for these ideologues, a loud and truculent promoter of massive privatization of State–owned enterprises.

Your strategies and tactics are rightly condemned by scholars and practical people for their callousness, inefficiency and the unacceptable harm they visit on populations.

Whenever the IMF has leverage over a government, it prods, pushes and cajoles it to implement its stale, even poisonous, recipe of yesteryears: free all markets, generate cash by quickly selling national assets to foreigners, privatize everything the State owns, essentially get rid of the government’s ability to steer the country’s economic development (they will only make a botch of it, is the IMF’s condescending view of any government dependent on its assistance).
Of course, if the country is a postulant or a new entrant in the European Union, its government will be further constrained and shackled in setting its economic, social, fiscal policies and, ultimately, having joined the Euro zone, even in its monetary policies.

The Romanian government, under pressure from the IMF, is considering a second wave of large-scale privatization of its remaining SOEs. The Casa de Economii si Consemnatiuni (CEC), essentially the only large Romanian retail bank not in foreign hands, should be privatized, says the IMF. CEC has 3.4 million clients, EURO 3.1 billion in assets and operates the largest network of branches; in fact, out of the 1000 bank branches serving rural areas of Romania, CEC operates 870 of them! (Roland Berger Consultants, 2010).

The Romanian government has been trying to stall or postpone the process of privatization in this case, looking for ways to shore up the capitalization of the CEC but the EU and the IMF are adamant that no public funds should be channelled to the CEC.
Of course, almost all banks, Austrian, Irish, Spanish, German, British, whether private or State-owned, have received equity injections and loan guarantees from their governments, often drawn from European emergency funds and IMF funding provided to the country; these funds are usually managed by the IMF, the enforcer of the European Union.
For instance, the Austrian banks Erste Group and Raiffeisen International, which own or control the largest banks in Romania, received from the Austrian State capital injections of EUR 1.22 billion and EUR 1.75 billion respectively. In addition, the Republic of Austria is guaranteeing bonds issued by these banks up to EUR 6 billion and EUR 10 billion respectively. All these private banks and privatized banks brought about the worst financial crisis in half a century. Several private banks had to be nationalized to save the financial system from collapse. Great empirical support for the IMF dogmas!

Indeed, Michael Lewis might have been describing the IMF’s policies when he wrote that what we have now is socialism for the banks and capitalism for the rest of us (in his book The Big Short, 2011).

But the Romanian government is “ordered” by the IMF not to support its only remaining retail State-owned bank. Let’s remember that half of the banks in Poland are State-owned or controlled. China, India, Brazil and countless other countries refuse to cede completely the control of their banking sector to “market forces” and are even more adamant not to let their banking sector pass into foreign hands.

Even Canada and the USA, generally market friendly countries will not let foreigners control their banks. In Canada, there is no State controlled retail bank but no single shareholder (or a group of related shareholders) may own more than 10% of the voting shares of a chartered bank and foreign investors, collectively, may not own more than 20% of the voting shares. Yet, Canada is renowned to have the best banking system in the world, a rare one to have weathered the 2007-2008 financial storm unscathed.

What are the policy options for CEC

First and foremost, the Romanian government should declare that the CEC will not be fully privatized. To the extent that retained earnings are not likely to raise sufficiently quickly the level of the bank’s capital to meet international (Based III) standards, the government should partly privatize the bank but only to the extent needed to raise sufficient capital. Its shares should be listed on a stock exchange.

The government should state that only Romanian individuals and entities owned by Romanians will be authorized to own shares in the CEC.

But, let’s be clear: the IMF does not understand, or want to understand, that the alternative to full privatization is better corporate governance of State-owned and State-controlled enterprises.

“Perhaps the most notable change in the practice of state-owned enterprises is the fact that corporate governance has changed significantly in the last decade and a half. Many SOEs have changed their charters to improve internal governance, include outside directors on their boards, provide incentives to managers for good performance, and professionalize management…
In the first place, companies that privatized part of their shares through issues of stock had to induce investors to buy shares by self-imposing limits on the capacity the government had to extract resources from the company. In order to do that, management was professionalized, outside directors were invited to the boards to monitor the company, and financial reporting was improved. Listing on a stock exchange, either to sell shares or bonds, forced companies to comply with high accounting standards, to report financial statements quarterly, and to hire auditor companies like PricewaterhouseCoopers, Ernst & Young, and KPMG. With the monitoring of shareholders, the oversight of stock exchange regulators (like the Securities and Exchange Commission), and the hiring of auditing companies, it became harder for the managers of SOEs to steal profits or to follow fraudulent accounting practices—not impossible, but much harder…
The end result has been a significant improvement in corporate governance and financial reporting and control.”
(The Return of State-Owned Enterprises: should we be afraid?, Francisco Flores-Macias and Aldo Musacchio, Harvard International Review, April 4, 2009)

“State-owned banks should be required to operate on a commercial basis. This requires competent staff and efficient internal systems…[The] governance measures…can ensure that competent senior management are retained with the mandate and freedom to implement the same kinds of systems and controls that would be adopted by any prudent commercial bank[1]”. (“State-owned Banks…Practical Policy Decisions in a World Without Empirical Proof”, A.Michael Andrews, IMF Working Paper, October 2005)

Everywhere governments seek to improve the corporate governance of their SOEs. The balance of advantages and disadvantages of privatized companies over State-owned ones shift in favour of the latter, if and when SOEs are well governed. A well-governed and well-run State-owned enterprise brings the benefit of efficiency in the interest of all citizens of a country, not merely for shareholders.

Of the 100 largest Canadian companies (by revenues) fully 13 are State-owned. Of the largest corporations of the world, on the basis of stock market value, four are State-controlled enterprises.

At Davos 2011, the Chinese and Indian representatives were openly condescending towards the neo-liberal economic model so dear to some western countries and promoted with such touching fervour by the IMF and the World Bank. However all smart governments know that they must improve the governance of their SOEs.
What pressures may be exerted on SOEs to improve their governance and ensure their viability and efficiency:
1.     Whenever possible, open the market to competition; the SOE, having to compete, will adopt the governance and management practices to succeed.
2.     Turn SOEs into hybrid enterprises where private investors may buy a percentage of the equity capital but the State retains control; a State enterprise which becomes partly owned by private investors and which lists its shares on a stock market will have to implement all the rules and regulations of securities commissions and stock exchanges. If it wants to raise additional capital through share or debt issues, it will have to demonstrate that it operates with a high quality of governance.
3.     Finally, if the SOE fails to improve its performance, the option of privatization may be re-activated.

The CEC can play a vital role in the economy of Romania as a State-owned or controlled bank. Several programs of financial assistance to small and medium size enterprises as well as for the agricultural sector resort to government guarantees of bank loans. These programs were devised to help Romanian businesses and farmers access the large European sums available for Romania under various programs of “convergence”. Yet, little has been done. These large amounts remain unclaimed and unspent, a real scandal for a struggling country like Romania.

The CEC should become, on government orders, the prime mover of a dynamic program of financial and technical assistance for entrepreneurs and agri-businesses applying for these European funds.
By law (“a law on modernization of State-owned enterprises”), the government should mandate the CEC and SOEs to adopt state-of-the-art governance principles and processes:

1.     The government should appoint a majority of independent board members; independence means that a board member, or any person related to him/her, has no personal interest in the decisions of the company, receive no monetary incentives other than publicly divulged fees as board members;
2.     All related-party transactions (i.e. between the company and any entity or individual connected to the board or management) must be publicly divulged; the interested member of the board may not participate in the discussion and decision on this transaction.

3.     Mandate the creation of an audit committee as well as a governance and ethics committee; impose on SOEs to be audited by internationally recognized auditing firms;

4.     Require the board to adopt a code of ethics and to publish the code on its Web site and in its annual report;

5.     Give the board the responsibility to appoint and set compensations for senior management but with the approval of the government.

6.     Mandate full transparency, in particular all SOEs should:

·       Publish an annual report available on their Web site containing all relevant information on their operations, measures of their performance, audited financial statements; total compensation of board members and senior management, experience and expertise of board members, their status as independent (or not), the code of ethics, any related-party transactions, etc.
        The annual report must be deposited in parliament within three month of the end of the SOE’s fiscal year; the chair of the board and the chief executive must appear before relevant committees of parliament to respond to all question and issues raised by their performance.
The Proprietatea Fund, in its bid to become listed on the Bucharest stock exchange, has adopted several governance measures along the line of what is proposed here. It could go further in some areas of governance. For instance, the independence of board members is not well established and several board members have serious conflicts of interests.
Nevertheless, the Proprietatea Fund has taken a giant step in the right direction. Given the sizeable stakes in several State-owned companies (as well as in many private companies) the Proprietatea Fund should push all of these companies to adopt quickly (within a year) the governance principles the the Fund itself has put in place.

The message to the IMF is simple: get on board; stop advocating passé policies; work with governments in improving the governance of State-owned enterprises.
For governments of eastern and central Europe, our message is clear: your well governed SOEs are your only remaining grasp on some control over your country’s economic and political sovereignty.

It is your moral and fiduciary duty to retain control of that lever!
Prof. Acad.  Yvan Allaire, Ph.D. (MIT)
Chairman, Institute for governance of private and public organizations (Canada)
Prof. Mihaela Firsirotu, Ph.D. (Mc Gill)
School of Management, UQAM (Canada)

(The opinions expressed here are strictly those of the authors).

[1] Obviously written before the collapse of the private banking system in 2008-2010; the author might have been less confident in the practices of “prudent commercial banks”

vendredi 11 février 2011

Saving Rosia Montana: it is now or never!

Saving Rosia Montana: it is now or never!

Mihaela Firsirotu, Ph. D.

A new coalition of Romanians from all over the world is circulating the attached PETITION against the development of the Rosia Montana Mining Project by Gabriel Resources/Rosia Montana Gold Corporation.

As you may know, the project has been stalled for almost three years due to a number of administrative and legal actions in the Romanian courts by a number of Romanian and international NGO’s opposed to the project. Recently, the Romanian Authorities, including the Supreme Court of Romania, have signalled their firm intent to accelerate the approval process. Several hurdles have already been cleared.

The Supreme Court has ordered the Ministry of Environment to issue the dam safety permits and a new Urbanism Certificate has been issued. Recently, the Minister of the Environment declared to the press that the project is close to final approval…The last obstacle is for Gabriel Resources/Rosia Montana Gold Corporation to obtain an Archaeological Discharge Certificate from the Ministry of Culture and National Heritage.

 Thus, the purpose of this petition, which is:

Ø   To ask the Ministry of Culture and National Heritage of Romania to refuse to issue a new Archaeological Discharge Certificate to Gabriel Resources/RMGC, as a replacement for the Certificate Nr.4, which was annulled irrevocably by the Romanian Courts. This certificate must not be issued if Rosia Montana is to be saved!
Ø  To ask the Romanian Authorities, including the Ministry of Culture and National Heritage to ask UNESCO to declare Alburnus Maior at Rosia Montana as a World Heritage Site. This is not a pie in the sky! Here is the official statement of UNESCO’s relevant organization (the International Council on Monuments and Sites) regarding the Roman site of Alburnus Maior at Rosia Montana : “an outstanding mining settlement and cultural landscape in Romania, as a potential World Heritage Site”. (October 2008);

Furthermore UNESCO has urged the Romanian Authorities “to protect the site,” and “to collaborate with its various relevant organizations to evaluate the significance of the site of Rosia Montana as a cultural landscape and its archaeological, architectural and ethnographic heritage together with its spiritual values in the context of the cultural heritage of Europe and the world”.

And last, but not least, as Prof.Dr. Ioan Marza, an international authority in geology and on the Rosia Montana’s geoarchaeological treasures, writes: “acordarea avizului de exploatare  ar fi o greseala catastrofica, deoarece in inconstienta noastra, ne-am distruge cel mai de pret argument istoric al latinitatii poporului roman, ilustrat prin lucrari miniere bine conservate(subterane si de suprafata), datate ca fiind de peste 2000 de ani…(galerii romane trapezoidale sapate cu dalta si ciocanul)”[1] 

As Romanians and citizens of this world, we cannot be deaf to this call!
If you want to try to save Rosia Montana before it is too late, to see it protected and declared a World Heritage Site, I urge you to register your support by visiting:    

Please act as soon as possible and circulate the petition to your Romanian friends and acquaintances.


[1] Source: Rosia Montana –Panteonul Istoriei Neamului Romanesc, 22 Martie, 2010,

Inauguration of a new site

Country Report on the IGOPP site

lundi 7 février 2011

Merkel şi Sarkozy vor să impună statelor membre UE o politică economică, fiscală şi socială comună

Vineri 4 februarie, 27 de şefi de guverne ale unor state membre ale Uniunii Europene s-au întâlnit la Bruxelles pentru a discuta propunerile cancelarei germane Angela Merkel şi ale preşedintelui Franţei, N. Sarkozy, privind modul în care ar putea fi salvată moneda euro.
Este cunoscut deja că, în mai 2010, guvernele zonei euro au creat un fond de 700 de miliarde de euro, din care 440 de miliarde vin de la statele membre, iar restul de la FMI. Acest fond are ca scop finanţarea de urgenţă, în caz de nevoie, a ţărilor din zona euro. Fondul, numit Mecanismul European de Stabilitate Europeană (the European Financial Stability Facility – EFSF), este necesar pentru a spori încrederea investitorilor în moneda comună, euro. Atât Merkel cât şi Sarkozy sunt ferm hotărâţi să apere, cu orice preţ, moneda europeană. „Euro este Europa şi Europa este 60 de ani de pace pe continentul nostru“ a declarat preşedintele Sarkozy la Davos. Vorbind şi în numele cancelarei germane, el a adăugat în discursul său că „nu vom întoarce niciodată spatele acestei monede, nu o vom abandona niciodată“.
Problema este că pentru ca acest fond să obţină o cotaţie AAA pentru împrumuturile pe care le-ar face, el trebuie să fie supragarantat de către statele zonei euro. Dar, la cererea Germaniei, fondul nu este garantat în mod solidar, ceea ce înseamnă că ţările mai slabe sunt obligate să-şi garanteze propria datorie publică. Ca atare, capacitatea reală de împrumut a fondului este estimată la numai 250 de miliarde de euro. Cum fondurile nu sunt suficiente pentru a obţine încrederea investitorilor în moneda comună, Angela Merkel a propus la Bruxelles, vineri 4 februarie, celorlaţi şefi de guverne membre ale Uniunii Europene o mărire a fondului de stabilitate, cu condiţia ca ţările zonei euro să accepte o integrare economică mai puternică, incluzând întâlniri regulate între şefii statelor membre.
Un document în formă preliminară, pregătit de unul dintre ministerele germane, identifică, conform International Herald Tribune din 4 februarie 2011, următoarele priorităţi:
– abolirea sistemului de indexare a salariilor;
– recunoaşterea reciprocă a calificărilor profesionale;
– crearea unei baze comune pentru stabilirea taxelor corporative;
– ajustarea sistemelor de pensii;
– formularea unui plan naţional de gestiune a crizelor bancare;
– crearea de măsuri legale care să forţeze ţările să adopte politici fiscale dure, printr-un mecanism numit „debt alert mechanism“.
Conform planului, ţările vor fi evaluate pe baza unor indicatori economici bine stabiliţi, verificarea urmând să fie facută de către Comisia Europeană.
Amintim cititorilor că mare parte din acest plan franco-german a fost iniţiat şi promovat de către Comisia Europeană încă din toamna anului trecut, cu scopul de a întări guvernanţa economică şi politică europeană. Amintim de asemenea că pentru nerespectarea obligaţiilor, Comisia Europeană prevedea sancţiuni în valoare de sute de milioane de euro, aplicate ţărilor indisciplinate.
Conform ediţiei online a revistei Financial Times din 4 februarie 2011, planul franco-german prezentat la conferinţa de la Bruxelles s-a lovit de rezistenţa celorlalţi lideri europeni, dispuşi să apere politicile lor naţionale, atât economice, cât şi cele privitoare la piaţa muncii sau la sistemul de ajutor social. raportează că mai mult de jumătate din cei 27 de şefi de guverne, incluzând aliaţi tradiţionali ai Germaniei ca Austria şi Olanda, au criticat initiaţiva, văzând în ea o încercare de extindere a Comisiei Europene în zone de politici care în mod normal ţin de jurisdicţia parlamentelor naţionale.
În faţa unei opozitii ferme, preşeditnele Sarkozy a ales să nu emită un document oficial cu propuneri specifice, delegând preşedintelui Cosiliului Europei, Herman Van Rompuy, sarcina de a tatona ţările membre asupra şanselor de a ajunge la un acord.
Interesantă este soluţia mai simplă şi cu riscuri politice mici, propusă de Jean-Pierre Chevenement, fost ministru al Apărării şi al Afacerilor Interne al Franţei, actualmente senator, oferită într-un interviu acordat ziarului francez La Tribune.
„Nu ar fi mai simplu să lăsăm Banca Centrală Europeană (BCE) să cumpere masiv obligaţiunile emise de diversele guverne europene în scopul finanţării datoriei publice?
S-au conturat deja regulile care interziceau BCE să facă avansuri statelor. De ce nu s-ar merge mai departe, oferind posibilitatea intervenţiei directe pe piaţa financiară a obligaţiunilor, dând astfel o lovitură şi speculaţiilor cu datoria publică?“ ( La Tribune, 4 februarie 2011, p. 7).
Dacă propunerile axei Berlin–Paris vor fi adoptate de ţările membre în luna martie, când se prevede o nouă întâlnire, ne putem întreba ce mai rămâne din autonomia acestor state.

mercredi 2 février 2011

Davos 2011

În aşteptarea lansării Centrului pentru o Românie Integră şi Prosperă (CRIP), patronat de profesorii canadieni Yvan Allaire şi Mihaela Fîrşirotu („a forum for the promotion of ideas and actionable policies to bring about a fair and prosperous Romania. Our mission is to help salvage Romania from its misguided politics and dead-end economic policies“) reproducem comunicatul de presă al IGOPP despre scopul participării prof. Yvan Allaire la Davos.

Profesorul Yvan Allaire la Forumul Economic Anual de la Davos, 26-30 ianuarie
Întreprinderile trebuie să creeze valoare pe termen lung pentru toate părţile implicate şi nu să maximizeze valoarea pentru acţionari

Montreal, 23 ianuarie 2011 – Într-un document prezentat pentru Global Council on the role of business in the 21st century al Forumului Economic Mondial, preşedintele consiliului Institutului pentru guvernanţa organizaţiilor private şi publice (IGOPP), profesorul Yvan Allaire formulează recomandări pentru modificarea radicală a funcţionării capitalismului.
Aceste recomandări vor face obiectul discuţiilor la Forumul Economic Mondial de la Davos, între 26 şi 30 ianuarie. Global Council este compus din şaisprezece lideri mondiali ai lumii afacerilor din America, Europa şi Asia, ca şi din mediile universitare (inclusiv Harvard şi universităţi chinezeşti de top). Doamna Monique Leroux, preşedinte şi director executiv al Mouvement Desjardins, a intrat de asemenea în Consiliu.
„Trebuie revăzut modelul anglo-saxon de întreprindere, conform căruia aceasta are un singur obiectiv, acela de a crea valoare pentru acţionari. Întreprinderile trebuie să-şi câştige şi să îşi protejeze legitimitatea socială în comunităţile cărora le aparţin“, afirmă dl. Allaire, autor (împreună cu prof. Mihaela Fîrşirotu) al unei lucrări despre cauzele crizei financiare, Black Markets… and Business Blues.
Profesorul Allaire formulează propuneri concrete pentru schimbarea regulilor şi pentru instaurarea noului model economic mondial:

• Societăţile şi guvernele trebuie să-şi adapteze politicile pentru a favoriza structuri multiple de proprietate a întreprinderilor, mergând de la cooperative la firme de familie, de la societăţi de stat la societăţi cotate la bursă, cu acţionariat deschis sau nu.
• Pentru a întări stabilitatea acţionariatului, un acţionar ar trebui să deţină acţiuni timp de cel puţin un an pentru a căpăta drept de vot.
• Pentru a descuraja deţinerea de acţiuni pe perioade extrem de scurte, ar trebui impusă o taxă minimă asupra tuturor tranzacţiilor bursiere şi o taxă asupra câştigurilor de capital, variabilă în funcţie de durata deţinerii acţiunilor.
• Consiliul de administraţie trebuie să fie legal responsabil pentru bunul mers al întreprinderii şi nu pentru maximizarea valorii pe termen scurt a acţiunilor.
• Guvernanţa societăţilor trebuie să se sprijine pe administratori legitimi şi credibili.
• Guvernele ar trebui să elimine avantajele fiscale asociate acordării de acţiuni managerilor ca formă de remunerare variabilă.
• Mai mult decât atât, acordarea de acţiuni cadrelor de conducere ca formă de remunerare ar trebui abolită.
• Consiliul de administraţie ar trebui să plafoneze factorul de multiplicare a remuneraţiei conducerii în raport cu remuneraţia medie a angajaţilor.
• Marii investitori instituţionali ar trebui să încurajeze stabilitatea acţionariatului şi diversitatea formelor de proprietate asupra întreprinderilor şi să limiteze plasamentele în fonduri speculative.
• Guvernele ar trebui să impună principiul reciprocităţii în tranzacţiile internaţionale; o firmă străină ar trebui să poată achiziţiona o societate naţională numai în măsura în care reciproca este valabilă în ţara achizitorului.

Criza financiară a arătat slăbiciunile şi punctele slabe ale unei forme de capitalism financiar care a fost dominantă în ultimii 20 de ani. Trebuie să adoptăm politici pentru a crea un sistem economic şi social mai echitabil, mai moral şi mai stabil.