NID: ROMANIA: THE BLOC'S LAST HOLDOUT

• Document Type: SPECIALCOLLECTION
• Collection: The Collapse of Communism in Eastern Europe: A 30-Year Legacy
• Document Number (FOIA) /ESDN (CREST): 06826786
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 2
• Document Creation Date: November 26, 2019
• Document Release Date: December 10, 2019
• Publication Date: November 18, 1989

Approved for Release: 2019/10/29 C06826786
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ROMANIA: The Bloc's Last Holdout
President C'eausescu's certain reelection as party chief at the national
party congress that begins Monday will show Romania's isolatior from
the transformation sweeping Eastern Europe.
Ceausescu has ensured that the five-day wed ne will strirtIv fcillntv
his orthodox agenda.
Ceausescu has reiterated his Stalinist worldview in a flurry of
speeches. blasting Polish and Hungarian reforms as betrayals of
"socialism" and accusing thc West of campaigning to destabilize
Eastern Europe. Despite his precautions and bluster. however.
Ceausescu has begun to acknowledge more serious economic
problems and to avow a new concern for the consumer. He recently
shuffled a number of key jobs, apparently to improve economic
performance. and has promised improvements in food and energy
supplies.
Comment: The upheavals in Eastern Europe. especially the leadership
changes in East Germany and Bulgaria. appear to have steeled
Ceausescu's resolve to preserve Romania as a bastion of Marxism-
Leninism. In fact. Romania closed its border with Hungary yesterday.
Ceausescu may be setting thc stage to denounce Budapest and reform
at the congress. His uncompromising opposition to reform rules out
major concessions at the congress, but Ceausescu may remove a few
ministers and senior bureaucrats as scapegoats for persistent
economic problems. His overriding concern now, however, is
stability, and he will MOD well short of wholesale overhaul of the
top levels.
Despite sporadic rumors that Ccauscscu's critics in the party might
try to unseat hint at the congress, there is no credible evidence that
his position is endangered. Most Romanians. however resentful of the
regime's repression and corruption. are convinced protests arc futile
as long as Ceausescu is in power: recent indications that his health
may be flagging only reinforce this resignation.
Once Ceausescu leaves the scene, however, major changes are likely
to follow rapidly, perhaps accompanied by violence. The economic
deterioration and popular frustration created by his rigid policies
mean his nepotistic dictatorship probably will not long survive him.
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TCS 2968/89
18 No%cmber 1989
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Romania's Draconian Economic Policies
President Ceausescu has virtually eliminated Romania's external
debt, but at high cost. Import cutbacks, energy shortfalls, and capital
stock deterioration have constrained real average annual industrial
production growth from 1985 to 1988 to about 1 percent. Similar
difficulties in agriculture and unfavorable weather have limited gains
in farm output. Consumers have borne the brunt of the regime's
austerity program�in Eastern Europe, only Albania has lower living
standards.
The President probably will continue to put the burden of
reinvigorating the economy on consumers. In outlining the plan for
1991-95, he is expected to give modernizing industry, maintaining
export growth, and increasing foreign exchange reserves high priority.
Although Ceausescu probably will pay lipservice to improving living
standards, he is unlikely to devote significantly more resources to the
consumer goods sector. With the debt paid off, however, the regime
can shift resources relatively rapidly from the external sector to the
domestic economy, if needed, to dampen unrest.
et
TCS 296818
18 November 1989
Approved for Release: 2019/10/29 C06826786