World Bank: Romanian Public Sector Simply ‘Too Costly’

Romania has an inefficient, highly costly public sector and the government needs to trim administrative spending toward levels more suited for its capacity to attract revenue, the World Bank said Monday.

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"The World Bank supports the reform of the administration because it's important and urgent. It's important not just to save money now, but to foster medium-term economic growth. It's urgent because, with the crisis, the country cannot afford to keep wasting resources through inefficient and inequitable processes," said François Rantrua, World Bank Country Manager for Romania.

Romania lags behind other countries in Europe with respect to the quality and cost-effectiveness of services delivered, the World Bank said, adding that the country must converge to older EU members, as well as to work as equal partner with the other to achieve common EU objectives.

The World Bank, alongside the Romanian government and in collaboration with European Commission officials is undertaking between March 2010 and March 2011 a functional review of Romania's public sector aimed at identifying measures to improve performance in the administration segment.

"The World Bank thus supports the Government in addressing the major challenges Romania's public administration faces today: to meet short-term fiscal needs, while creating a foundation for future sustainable and equitable growth," the international institution said.

Last year, Romania secured EUR20 billion in foreign aid from the International Monetary Fund, the EU, the World Bank and the European Bank for Reconstruction and Development to fight the effects of the global crisis.

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