Ten years and 740 words later. When suspension of disbelief pays off

Ten years ago, I began my Romanian adventure with a mix of youthful curiosity, eagerness and hope – perhaps with much the same feelings that were animating Bill and Rachad as they were beginning their own adventure: The Business Review.

By Matei Paun

In fact, curiosity, eagerness and hope were very much the sentiments of the day – Romania had just voted in what was supposed to be its first Western-minded reformist government. For the first time, radical economic reforms were being considered. The stock market was skyrocketing. Privatizations were rolling off one after another. EU membership was no longer a distant dream. It seemed that Romania’s hopes and dreams might finally become reality.

Even though I had spent the previous four years shuttling back and forth between Wall Street and the emerging markets of the former Soviet Union, the difficult realities of post-communist political and economic reform were, for a moment, briefly suspended. I could not resist a gust of unbridled optimism, some might even say naiveté.

Looking back on that moment, I do not regret my temporary suspension of disbelief, as it is what permitted me to make the leap back into Romania, after a 25-year absence. All enterprises, great and small, have at their root hope, justified or not.

The honeymoon did not last long. By the summer of 1997, Romania’s capital markets had peaked, inflation was rampant and the cracks of coalition politics were becoming ever more visible. Clouds were on the horizon, but still, that did not mean it was raining outside just yet.

That did not happen until 1998, which brought with it the East Asian, and later on, the Russian, crises, setting the stage for Romania’s near brush with disaster, as it flirted with default and a collapsing banking sector through 1999. 1998 was also the year NATO intervened in the former Yugoslav republics, thereby highlighting Romania’s potential strategic importance and setting the stage for NATO and EU membership. 2000 allowed Romania’s socialists to return to power, and to, ironically, reap the fruits of that brief initial burst of reformist zeal in 1997. Those reforms were bearing fruit, and Romania was on its way to economic normalcy. Inflation came down, banks began lending, the real estate sector took off and retailing exploded. In just a few years, Romania became largely unrecognizable.

It is with a certain degree of nostalgia that I recall Café de Paris, Salt & Pepper, Vox Maris, USD 50,000 apartments (yes, that’s Dollars!) and the lack of traffic congestion. I am glad I caught Vama Veche before it became the dump that it now is. But I am also glad to see institutions such as The Business Review, Vivid and Barka Saffron not only survive, but thrive. I am glad to see low-cost flights to most parts of Europe. I am happy to see former employees and friends returning, after seeking their fortunes elsewhere.

The last ten years were also a professional rollercoaster. While in 1997 I pioneered the Romanian debt market by bringing over USD 100 million of foreign funds into local currency government bonds (quite an accomplishment at the time!), a year later I had to fall on my sword and fire all 17 colleagues as the Russian default produced over USD 3 billion in losses for our head office and scuttled a proposed sale of the company to a major German bank. A year later I would start, together with a partner, HTI, which grew into one of the leading independent capital market brokers, and which last year got sold to Morgan Stanley.

In the ensuing years, I would take on various assignments, some successful, others less so, with companies such as ING, Deloitte, and the Soros Foundation. And four years ago, I started BAC, my current focus, which has grown into a successful investment banking firm.

In ten years Romania has given me a lot: a great family, wonderful friends, grey hairs and the memories and experiences which most people would be lucky to accumulate in a lifetime. But I am often saddened that Romania has not done more for itself. It is still, in many ways, a place defined by its potential, not by its achievements.

I can only hope that over the next decade, Romania will give Business Review more cause to focus on the country’s accomplishments, and fewer reasons to dwell on its shortcomings.

[Great Lines, Matei! ‘curiosity, eagerness and hope’ You could have been a speechwriter for Obama! It is true those are the same feelings I was living off of too. This piece really holds up well…]

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