Romanian Stores Go to Highest Bidder
A long-awaited auction of state-owned stores in Bucharest lent some new twists to the Romanian tradition of bestowing gifts to bureaucrats to win favors.
“I offer the municipality a kindergarten,” announced Liviu Ciobata, one of six would-be entrepreneurs bidding recently for the lease on a central Bucharest shoe store.
“I have unrivaled capital assets. The state already owes me half a million dollars. I have experience in footwear,” Ciobata said, rattling off his well-rehearsed pitch.
“I will keep all the employees of the existing store. And I give you a kindergarten. None of my competitors can offer more!”
Ciobata’s competitors bristled. The battalion of officials across the crowded, smoke-filled Town Hall conference room looked unimpressed.
Nevertheless, Ciobata eventually got the store--and a flurry of applause from shoe store staff visibly impressed by his maneuvering.
Officials have promised to auction the leases to hundreds of state stores in coming months to try to remedy widespread discontent over the previous method of privatization--leasing the stores to those who offered the first bribe.
Since the Communists were ousted in December, 1989, dozens of private stores have been created in this way. Most sold only luxury goods, such as whiskey, cigarettes and chocolates, for hard currency, while Romanian consumers remained largely deprived of basic food and clothing.
In December, the haphazard leasing of stores was stopped. The Commerce Ministry set up a commission to work with local officials across Romania to come up with a way to sell off state shops in dozens of cities.
The new auction method gives priority to bidders who offer to retain the old staff, use the store space for selling basic goods such as food, and--in a new twist to an old Balkan tradition--offer the municipality various inducements.
Baksheesh, or the practice of bribing officials, has long been a tradition in the lands ruled for centuries by the Ottoman Empire.
At the recent auction, officials upbraided one man bidding for the shoe store for refusing to offer any inducements to show he was sincere in his desire to set up a pasta and pizza store on the site.
“Where’s your equipment?” demanded the auctioneer. “Where’s your capital?”
The young man hesitantly listed his assets, which consisted of about $800 in French francs, British pounds, and German marks.
It was not nearly enough to challenge Ciobata.
Stella Chiriac, the shoe shop’s cashier, said the store’s staff had solicited the bid from Ciobata’s Champ Investments, a successful importer of shoes from Italy, to make sure that the shop did not become another outlet for selling whiskey.
“I have worked for 24 years selling shoes and he will enable us to continue it,” Chiriac said. Already, she said, Ciobata has promised to modernize the store’s off-putting purple interior.
Ciobata, like many in post-Communist Romania’s emerging entrepreneur class, used to be a member of the reviled Communist bureaucracy.
Ciobata concedes that his present success in winning loans and import contracts with the West comes from years of working for the commerce and sports ministries in the former Communist government.
Since the revolution, Ciobata has sold $1.2 million worth of imported shoes to Romania’s Comtourist chain of state stores. This financed his bid of about $3,300 per month--roughly 40 times the average Romanian monthly salary.
“The new millionaires are pushing aside those who have long worked in these stores,” said Dumitru Bosianu, vice president of the Federation of Commerce Unions, who attended the auction.