Ms. Anja Baum, Clay Hackney, Mr. Paulo A Medas, and Mouhamadou Sy
State-owned enterprises (SOEs) are present in key sectors of the economies around the world. While they can provide an important public service, there is widespread concern that their activities are negatively affected by corruption. However, there is limited cross-country analysis on the costs of corruption for SOEs. We present new evidence on how corruption affects the performance of SOEs using firm level data across a large number of countries. One striking result is that SOEs perform as well as private firms in core sectors when corruption is low. Taking advantage of a novel database reforms, we also show that SOE governance reforms can generate significant performance gains.
This paper discusses Romania’s Ex-Post Evaluation of Exceptional Access under the 2013 Stand-by Arrangement. Romania experienced strong economic growth in 2016, resulting in a closed output gap. Private consumption was boosted by an expansionary and procyclical fiscal policy and wage increases. The cyclically adjusted budget deficit grew by 1.5 percent of GDP in 2016, reflecting large tax rate cuts and wage increases. Growth is expected to reach 4.2 percent in 2017—supported by continued stimulus to private consumption from a new round of fiscal relaxation and wage increases—and to moderate to 3.5 percent in the medium term.
This paper highlights Bulgaria’s state-owned enterprises (SOEs) sector and to assess its performance in a regional perspective. A detailed and rich firm-level dataset of state-owned and private firms was compiled for this note to compare key performance indicators of SOEs to private firms in the same sector and to similar firms in Croatia and Romania for a regional comparison. In some network industries, such as energy, SOEs are heavily loss-making. Large amounts of debt have been piled up notably in the energy and transport sectors which, to the extent that it is classified outside the general government accounts, can pose significant risk to public finances in the form of contingent liabilities if the SOEs run into financial difficulties. SOE profitability and resource allocation efficiency largely lag private firms in the same sectors, even when isolating SOEs engaged in competitive market activities and hence classified outside of general government. Coupled with comparably poor output quality, these challenges have the potential to impair competitiveness and productivity across the economy.
This 2004 Article IV Consultation on Romania highlights commendable progress under its home-grown IMF-supported program. Economic activity is picking up after a four-year slump, inflation remains low, the financial sector is stable, and the fiscal and external positions are improving. The 2014 budget aims to protect the gains under the program, continue the downward debt-to-GDP trajectory, and advance the reform agenda. Debt has fallen considerably owing to completion of a large part of the debt-land swap, but remains high. The authorities have taken welcome steps to strengthen the nonbank financial institutions supervisory framework.
This paper on Romania was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on September 13, 2012. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of Romania or the Executive Board of the IMF.
Although the economic growth of Romania has resumed, it has boosted downside risks. However, the country has continued its strong performance under the new program in strengthening macroeconomic policies, accelerating structural reforms, and consolidating economic development. In conclusion, the authorities concur that the current precautionary Stand-By Arrangement (SBA) will provide additional security against unforeseen shocks, thereby setting the stage for strong and sustainable economic development while maintaining external and internal stability and thereby achieving the fiscal goals for 2012.
Romania’s economy has stabilized and growth is now resuming. The financial program’s objectives include structural reforms in the energy and transport sectors, and restructuring and privatization of state-owned enterprises (SOEs). The macroeconomic outlook is expected to improve in 2011–12 with a gradual pickup in growth, a stable current account, and inflationary pressures that are still high but will begin to recede after mid-2011. The authorities are also focusing on reducing the arrears of the rest of the public sector.
Mr. Tubagus Feridhanusetyawan, Mr. Alun H. Thomas, Ms. Tessa Van der Willigen, Ms. Uma Ramakrishnan, S. Reichold, Mr. Juan Zalduendo, and Mr. James P Walsh
This paper focuses on the fact that the 2004–2005 conditionality review expands to include a review of the application of the new Guidelines on Conditionality, adopted in 2002. These guidelines were the culmination of a comprehensive and far-reaching review of conditionality that aimed to enhance the effectiveness of IMF-supported programs. They represented the first revision of the IMF’s conditionality guidelines since 1979, and were developed by the IMF after seeking input from civil society and public forums held in several countries. This review comes at an early stage of experience with the new guidelines, and further evidence will be needed before definite conclusions can be drawn. The ultimate test of conditionality is whether it contributes to better economic outcomes, including over the medium term, and these cannot yet be gauged. Moreover, although this review draws in part on case studies, no substitute exists for cross-country analysis for identifying broad trends, and at this stage such analysis is hampered by small sample sizes.
This paper assesses Romania’s First and Second Reviews Under the Stand-By Arrangement (SBA), Request for Waivers, and Modification of Performance Criterion. The authorities have so far achieved the main macroeconomic objectives of the program supported by the SBA; the results now need to be consolidated and sustained. The program was designed with a view to reducing inflation while preserving growth and containing the current account deficit. The IMF staff considers that the government’s revised program deserves support. The government has also confirmed its commitment to the program through the adoption of important corrective measures.
Romania showed progress in stabilization and reform, facilitated by substantial fiscal and external adjustments, under the Stand-By Arrangement. Executive Directors commended these developments, and emphasized the need to improve fiscal and monetary policies, and accelerate structural reforms. Directors appreciated the authorities' commitment to accelerate European Union accession, and stressed the need for fiscal consolidation, financial discipline in state-owned enterprises, and rapid privatization for reducing inflation and protecting external sustainability. They urged the authorities for the full implementation of the economic program, and approved a Stand-By Arrangement.