Energy shortages squeeze Romanian economy even more
In an effort to revive its troubled economy, Romania is signaling its hard-pressed people that they must tighten their belts yet another notch.
Energy is the catalyst of the current crunch.
Romania was an oil exporter until production peaked at 14.7 million tons in 1976 and 1977. Since then, the decline has been abrupt. By 1979 Romania was importing more energy than it produced from its own wells. The 1975-80 plan ended almost 8 million tons short of target.
At the same time, bills from heavy borrowing in the noncommunist world began to flow in. Debts to foreign governments and lending institutions stand at about
Japan, the United States, Canada, West Germany, and other Western countries have indicated grave doubts about Romania's continued credit-worthiness. And they are reluctant to provide new loans.
Romania could not have met its immediate obligations on time without the International Monetary Fund's June release of $500 million of credit arranged last year (and suspended due to doubts about Romania's financial stability).
But the IMF attached its usual conditions, requiring tough action to reduce the country's alarming trade deficit within the year. Bucharest had to comply, and it chose to make drastic cuts in energy consumption.
Although oil imports rose in the '70s, so did Romania's refining operations. With 80 percent of imports going to refineries that had a total capacity of 25 million tons, the industry remained an export gold mine until the world oil market slumped. Last year 30 percent of Romania's refining plant capacity lay idle.
The quest for more oil from domestic sources is backed by a new $100 million World Bank loan to help support a Romanian project to improve extraction techniques in two major oil fields. It involves:
* Reactivation of 240 wells previously assumed dried out.
* Sinking of 500 new wells over the next two years.
* Drilling to depths of 26,000 to 33,000 feet, as much as 10,000 feet deeper than any previous Romanian wells.
* More exploration and drilling on the Black Sea coastal shelf. Romania's Communist Party chief and President, Nicolae Ceausescu, sounded a euphoric note about Black Sea oil three years ago. But drilling has proved disappointing so far.
Assuming the technological difficulties of deeper drilling can be overcome, the new extraction project should produce more. Experts say it conceivably could save some $200 million annually in foreign exchange imports.
But sharp domestic problems, including low popular morale and little confidence in the government, could blow up if the regime pushes its hard-nosed recipes for recovery.
The new energy restrictions are only the latest in years of notch-by-notch tightening of ordinary Romanian belts. They affect both industry and individual users, but it is the people who will feel the pinch the most, since the government is hiking the price this time, instead of limiting supply. For several years now evening lighting and winter heating minimums have been reduced.
Last February prices of some 220 food items increased an average of 35 percent. Then there were higher charges for gasoline, housing, telephones, and newspapers. June 30 brought new charges for gasoline (up another 150 percent), coal and wood (up 40 to 70 percent), and electricity (up 30).
Like the Soviets, the Ceausescu leadership hampers its own efforts at better relations with the West because of its tarnished human-rights record.
Recently President Reagan, approving a further year of most-favored-nation status to Romania, warned Bucharest that tariff preferences could be in serious jeopardy without a significant increase in emigration. From 4,000 annually, the level of emigration fell last year to fewer than 1,000.
Forfeiting the MFN status would be a serious blow to trade with the US. It has almost quadrupled since Romanian goods first secured the lower tariffs in 1975.
Western leaders - including Pope John Paul II - have protested the persistent persecution of religious communities and political dissidents.
Romanian news media maintain a campaign against political ''reformism'' and ''liberalism.'' The public obviously is not impressed by the ever-more-frequent removal of ministerial and other scapegoats.
It is too conditioned by years of denial and austerity, and by such ironies as the recent official exhortation for ''improved diet structures,'' including consumption of ''more protein,'' at a time when meat and other basic foods are rationed even more strictly here than in Poland.
For longtime observers, the lack of public incentive looms even larger than the question of technology and financing for such efforts as the drive for more oil.