The analysis of Romania's loan from the International Bank for Reconstruction and Development and International Monetary Fund between 1973-1989

Tiu Ilarion

Impact of Socio-economic and Technological Transformations at National, European and International Level (ISETT), 2015, vol. 7

Abstract: Between 1973-1981, Romania benefited for loans from the IMF amounting to USD 1667.263 million (excluding interest), money that helped balance the balance of payments deficits. Because the Romanian has consistently refused to provide certain information confidential to the Fund, staff of the IMF imposed conditionality clause , which obliges the government in Bucharest to adopt stabilization programs. After 1982, Nicolae Ceaușescu considered policy conditionality as “interference in internal affairs†of Romania, and has decided to discontinue credit relations with the Fund. The loan agreements with the International Bank for Reconstruction and Development, signed during the period 1974-1982, Romania has received a loan amounting to USD 2182.8 million (excluding interest) for 33 investment projects. Bank has agreed to co-finance investments included in Romania's five-year plans, thus relaxing performance criteria when authorized loans. Socialist economy was unable to comply with the new construction plans for industrial- agricultural objectives, and therefore have not provided timely investment foreign currency necessary for the payment of due installments. In the early 80’s, Romania's external debt exceeded nine billion dollars.

Keywords: Industrialization; Economic development; Foreign Loans; IMF, IBRD; Foreign Debt; Communism. (search for similar items in EconPapers)
JEL-codes: A30 (search for similar items in EconPapers)
Date: 2015
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