Dynastic Socialism and the Economic Downturn

Dynastic Socialism and the Economic Downturn

The Eleventh Party Congress in 1974 signaled the beginning of a regime based on "dynastic socialism." Ceausescu placed members of his immediate family--including his wife, three brothers, a son, and a brother-in-law--in control of defense, internal affairs, planning, science and technology, youth, and party cadres. Hagiographers began portraying Ceausescu as the greatest genius of the age and Elena as a world-renowned thinker.

Having assumed a cloak of infallibility, Ceausescu was unchecked by debate on his economic initiatives. He launched monumental, high-risk ventures, including huge steel and petrochemical plants, and restarted work on the Danube-Black Sea Canal. The government boosted investment and redeployed laborers from agriculture to industry. Central economic controls tightened, and imports of foreign technology skyrocketed.

In 1971 Romania joined the General Agreement on Tariffs and Trade, and in 1972 it became the first Comecon country to join the International Monetary Fund (IMF) and World Bank, which broadened its access to hard-currency credit markets. Romania also supplied doctored statistics to the UN, thereby gaining the status of an undeveloped country, and, after 1973, receiving preferential treatment in trade with developed countries.

Halfway through the Sixth Five-Year Plan (1976-80), the economy faltered. All manpower reserves had been tapped; shortages of consumer goods sapped worker enthusiasm; and low labor productivity dulled the effectiveness of relatively modern industrial facilities. After decades of growth, oil output began to decline; the downturn forced Romania to import oil at prices too high to allow its huge new petrochemical plants to operate profitably. Coal, electricity, and natural-gas production also fell short of plan targets, creating chaos throughout the economy. A devastating earthquake, drought, higher world interest rates, soft foreign demand for Romanian goods, and higher prices for petroleum imports pushed Romania into a balance-of-payments crisis. In 1981 Romania followed Poland in becoming the second Comecon country to request rescheduling of its hard-currency debts, notifying bankers in a telex from Bucharest that it would make no payments on its arrears or on the next year's obligations without a rescheduling agreement.

Ceausescu imposed a crash program to pay off the foreign debt. The government cut imports, slashed domestic electricity usage, enacted stiff penalties against hoarding, and squeezed its farms, factories, and refineries for exports. Ceausescu's debt-reduction policies caused average Romanians terrible hardship. The regime's demand for foodstuff exports resulted in severe shortages of bread, meat, fruits, and vegetables--Ceausescu even touted a "scientific" diet designed to benefit the populace through reduced meat consumption. The authorities limited families to one forty-watt bulb per apartment, set temperature restrictions for apartments, and enforced these restrictions through control squads. Slowly, however, Romania chipped away at its debt.

Romania's foreign policy in the 1970s and early 1980s consisted of propagating its message of autonomy and noninterference and explicitly rejecting the "Brezhnev Doctrine," named after Soviet leader Leonid Brezhnev, who asserted the Soviet Union's right to intervene in satellite countries if it perceived a threat to communist control or fulfillment of Warsaw Pact commitments. In 1972 Romania redirected its military defenses to counter possible aggression by the Warsaw Pact countries, especially the Soviet Union. Romania continued to express resentment for the loss of Bessarabia, condemned the Soviet invasion of Afghanistan in 1979, and ignored the Soviet-led boycott of the 1984 Los Angeles Olympic Games. Soviet leaders used proxy countries, especially Hungary, to criticize Romania's foreign and domestic policies, especially its nationalism. Romania's intensified persecution of Transylvania's Hungarians further aggravated relations with Hungary, and Ceausescu's bleak human rights record eroded much of the credibility Romania had won in the late 1960s through its defiance of Moscow.

Despite the population's extreme privation, at the Thirteenth Party Congress in November 1984 the PCR leadership again emphasized order, discipline, political and cultural centralism, central planning, and Ceausescu's cult of personality. By then the cult had gained epic dimensions. Ceausescu had assumed the status of Stephen the Great's spiritual descendant and protector of Western civilization. In the severe winter of 1984-85, however, Bucharest's unlit streets were covered with deep, rutty ice and carried only a few trucks and buses. The authorities banned automobile traffic, imposed military discipline on workers in the energy field, and shut off heat and hot water, even in hotels and foreign embassies. Shoppers queued before food stores, and restaurant patrons huddled in heavy coats to sip lukewarm coffee and chew fatty cold cuts. Although the Romanian people endured these hardships with traditional stoicism, a pall of hopelessness had descended on the country, and official proclamations of Romania's achievements during the "golden age of Ceausescu" had a hollow ring.

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