Page 250 - Proceeding 2015

FAMP ANDRONICEANU Armenia and OHANYAN Gurgen
CCASP IMF POLICIES AND THEIR EFFECTS ON EDUCATION IN ROMANIA

Particularly, the IMF officials after all reviews concluded that “Romania has successfully concluded two

Stand-by Arrangements with the Fund” (IMF MONA, 2015). Given that IMF staff announced about
successful accomplishment of two SBAs with Romania, we suppose that government compliance was
not a problem in implementation of IMF measures. Hence, the effects of IMF policies on Romanian

education sector could be fully attributed to the Fund, as soon as compliance was not an issue.

TABLE 3 - MAJOR REQUIREMENTS OF THE IMF
SBA 2009-2011 SBA 2011-2013
Budget expenditures Budget expenditures
Streamlined public employment (by over Continued streamlining of public employment
100,000) allowing restoration of the 2010 public wage cut
within a sustainable wage bill
A public sector wage cut of 25 percent (partly Improved targeting of subsidies and social
offset by 15 percent increase in 2011) assistance
Elimination of holiday bonuses and the 13th Elimination of arrears of the health insurance fund,
salary reduction and improved control of central and local
government arrears, and shortening of payments
period
Inefficient social benefits cut (15 percent) and
reinforced social inspections
Central government arrears reduced to near
zero
Budget revenue Budget revenue PROCEEDINGS OF THE 11 TH ADMINISTRATION AND PUBLIC MANAGEMENT INTERNATIONAL CONFERENCE ”Strategic Management for Local Communities” 30 th – 31 st October 2015 Bucharest
A rise in social security contribution rates (3 Integration of tax and social contributions collection
ppts.)
Structural reforms Structural reforms
A major pension reform was approved to Passage of a New Labor Code and Social Dialogue
increase retirement ages, move indexation Law that enhance labor market efficiency
from wages to inflation, and reduce incentives
for early retirement, while continuing to build
the second pension pillar
The public wage system was reformed, Passage of a Social Assistance Law that provides
harmonizing wages across ministries and for streamlining and better targeting of social
significantly reducing the role of bonuses in benefits
compensation
Social benefits were reformed—including
unemployment insurance, social assistance
programs, and maternity benefits—to
improve efficiency while reducing costs
Source: IMF official reviews of Romanian SBAs initiated in 2009 and 2011

According to the reviews of the IMF staff Romanian government has implemented various successive

and comprehensive reforms in four major economic areas: budget expenditures and revenue, structural
reforms and financial sector. Yet, within our topic we have extracted those measures that could affect

education sector either directly or indirectly (see Table 3). Particularly, first SBA signed in 2009 urged
Romanian government to cut budget deficit up to 3 percent of GDP. This difficult path could not be
implemented without harmful and rigid methods.

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