1980s austerity policy in Romania
Early in the 1970s, the Western countries were willing to fund Romania's acquisition of technology through loans given on political considerations. The debts of Romania to Western creditors rose from just $1.2 billion in 1971 to a peak of $13 billion in 1982. The 1970s energy crisis combined with the increase in interest rates made Romania incapable of repaying its debts.
In 1981, in order to pay its due debts, Romania requested the International Monetary Fund a line of credit and adopted a policy to pay back all its debt.
As the IMF recommended, imports were reduced and exports were increased. The effect of the cuts in imports in Romania, a net importer of food from the West, was however not correctly estimated by the foreign analysts and it led to food shortages.
By 1986, it paid half its debt and it finished paying its whole debt early in 1989, ahead of schedule.
Nevertheless, the austerity policy continued even after all the debts had been paid.
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Ceaușescu started an austerity program without reforming its centralized and inflexible planning. Domestic energy resources were channeled towards inefficient production intended to be exported. Even basic necessities, such as food, heating, electricity and medical attention were rationed and the infrastructure has been left decaying. Due to the austerity, by 1983, the standard of living fell by 19-40 percent, according to IMF figures.
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In 1981, a rationing system for basic foodstuff was started for bread, milk, cooking oil, sugar, and meat. Rationing of some foodstuffs such as bread, flour, sugar and milk was only outside the capital, Bucharest being excepted from it. At Ceaușescu's initiative, a "Rational Eating Program" began, being a "scientific plan" for limiting the calorie intake for the Romanians, claiming that the Romanians were eating too much. It tried to reduce the calorie intake by 9-15 percent to 2,800-3,000 calories per day. In December 1983, a new dietary program for 1984 set even lower allowances.
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The electricity and district heating were often stopped in order to save energy, leading to unbearable winters. Availability of hot water was also restricted to one day per week in most apartments. Unannounced power cuts affected even hospitals' regular functioning: for instance, in the winter of 1983, dozens of babies in neonatal intensive care units died due to the power cuts to the incubators. Street lighting was often turned off and generally reduced to a bare minimum.
Petrol was rationed; private car owners were only allowed to buy 30 litres of petrol per month and private driving bans were regularly imposed. In order to save fuel, the media even appealed peasants to replace mechanical work with manual work, using carts and horses instead of trucks and tractors.
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http://en.wikipedia.org/wiki/1980s_aust ... in_Romania