World Bank: Set up an institution to coordinate the public administration reform!

Moreover, the lack of a salary strategy has allowed trade unions to make excessive demands, which distorted the labor market. “Personnel expenditures surged 73 percent from 2005 to 2007, while gross domestic product increased by only 40 percent in this same period,” said the report.

The financial institution’s economists added that the salary is not correlated to performance. Thus, the World Bank recommends that Romanian authorities set up an office to coordinate the reform of public administration.  “However, this office should be independent from existing structures. And there is another important issue: it takes political will to make such an office work,” analyst Aurelian Dochia told Business Standard.

The World Bank said that Romania could become increasingly poorer this year, due to the international crisis. Thus, absolute poverty could rise 1-2 percentage points year-on-year in 2009, to amount to 11-12 percent of total population.