13 August 2009

Restructuring the State Apparatus--Playing by Ear? (EN)


A wandering cymbalist came back from London, where he used to earn his living by playing on the streets:
-- So, leaving everything else aside, d'you get to learn some English, as well?
-- Yessir, I did! Especially useful when you need to talk about money, you know :-)
-- And how's 10 in English?
-- They say "ten," but you can ask a harder question :-)
-- Alrighty, then, how's 1,000?
-- That's easy, too: ten-ten-ten-ten-ten-ten... ;-)
The Cabinet decided, during negotiations for the second installment of the IMF loan, to force all public employees into 10 days of unpaid leave, by the end of the year; then, to cut off 10,000 budgeted but unoccupied positions, while scratching off more than 100 central government agencies. We're also waiting for a big infrastructure project to build 10,000 km of secondary roads, while the Cabinet's Program also promised 1,000 km of highways. [Later edit: The total savings effected by these measures amount to €150 mil./year, while the IMF loan stands at €20 bn. principal! The Cabinet fine-tuned its statement, later today.] I understand the need for round figures, easy to communicate, to convey, to convince--the have a nice ring to the ear :-) But every time I hear such figures, I'm thinking of the "successful" cymbalist playing everything by ear till the day he had to quit wandering and go home--"no harm done," right?!?

You'll be surprised to learn that I welcome the adoption (I have my doubts as to the constitutionality of implementation!) of a measure that allows public employees to take unpaid leave amounting to 10 days every year! No, I haven't seen the reasoning behind this decision, the full cost-benefit analysis and/or the regulatory impact assessment--neither from the Cabinet, nor from the initial proponents--but I give you my opinion: Every now and again, people realize they are not in the mood or don't have the motivation to go to the office. When that happens, they "call in sick." Some jurisdictions in this very wide world allow for employees to take a limited number of "sick-days" per year, no questions asked. In Romania, if you do call in sick, you need to bring a certificate from a general practitioner MD, stating that you were, indeed, sick. You can only imagine the volume of small bribes being transacted for these certificates every year! Therefore, being able to call in, now and then, for one of those unpaid days is a good solution for fighting petty corruption--although it's clear to me that our ministers never considered such impact for their measure.

Just as well, you'll be surprised to learn that I also welcome cutting off 10,000 positions from the state apparatus--as long as they're not being filled, the budgeted money would've returned to the treasury, anyways. I haven't seen analyses supporting this measure, either, but since those institutions actually function without these 10,000 employees, I agree that cutting off the allocation (both positions and funds) may have a positive impact over the coming years. Institutions will be forced to adapt/adjust to the new conditions, rearrange their internal processes/procedures, and even become more cost-effective, hopefully. But I remember having this conversation with former and current decision-makers, back in 2007, when the ministries of economy and finance merged for a brief period of time: I was suggesting that the merger could've been used as an opportunity to mainstream the activities of the ministry, and dispose of a sizable proportion (about 30%) from the 35,000 civil servants they employ. Not just sack them--a measure that would've definitely antagonized trade unions--but simply move them into other institutions that manage EU financial instruments.

Early 2006, I worked on a project that analyzed the training needs of the Romanian public sector, with respect to improving the absorption capacity of European funds at a minimal 50%. At that time, we assessed that 10,000 public employees could've been trained within 6 months to a couple of years, with a "return on investment" (compared to absorption capacity) negatively correlated from a fabulous 150,000% to a "mere" 6,000%, respectively. In contrast, we just got news that absorption capacity may have increased from 3.22% to a "spectacular" 5.41% over the past 6 months :-( Just assume that Romania would've managed somehow, by end 2007, to have trained 10,000 of the 35,000 employees from the ministry of economy and finance only, and then to have placed them in key positions amidst the 70+ management authorities and intermediary bodies that plan, coordinate, implement, monitor and evaluate the spending of those €30+ billion. I can't even fathom the potential impact! But I'm sure that more public institutions would've been mainstreamed by now, less people would've remained within the public sector, and SME-buzzing-bees would've created more jobs and poured more tax-money into the state budget.

Indeed, we need a slimmer state apparatus, with lower costs and improved performance. Training is just one lever that can be employed in order to improve the situation; employing all available levers in concertation may yield extremely positive results, achieving sustainable development and higher living standards. But mainstreaming institutions and restructuring administration require consensus, rather than conflict. Decisions should be calm rather than hasty, reasoned rather than discretionary, well-planned rather than pressured. Bref, not playing by ear! Unfortunately, we still don't have enough information about norming the cost of labor, about budgeting the performance of institutions, or about multi-annual projects, objectives and priorities. Therefore, either we take the governing cymbalists back to school, or we simply wait until they're forced to go home--wishing for "no harm done," after all?!? I don't think so! If I must listen to cymbalists, let them, at least, be professionals:

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