Baksheesh brings exotic flavour to Paris of East

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Bucharest - It may not be the glittering West, but as far as Ahmed Mohammed is concerned, its streets are paved with gold. Adjusting his fez, he smiles as Romanians cast their hungry eyes over his market stall bearing sweets, chocolates, cheap perfumes and coffee. The prices for bulk purchases are all marked but if they want to haggle, he will oblige.

"After so many years of deprivation, Romanians cannot get enough of these goods," he says. Like many traders in the Flora market on the city outskirts, Mr Mohammed is from Iraq, not a country offering the brightest prospects for would-be entrepreneurs. He is joined by a colourful array of like- minded merchants from Syria and Lebanon and as far afield as China.

Since the overthrow of Communism, Bucharest has become a Mecca for Arabs and Asians,tempted by easy visas and demand for the cheap imported goods in which they specialise.

To some extent they also feel at home. "This country is neither Europe nor the Orient but is somewhere between the two," says Mr Mohammed, side- stepping a trolley of "Ariel" washing-powder bearing Arabic inscriptions. "There is a fluctuation between the white market and the black market. Here we can thrive." An Egyptian importer put it more succinctly: "This is a land of baksheesh in a European setting."

Certainly the rules governing economic life in Romania today are unclear, with backrooms providing the setting for many a money transaction and bribery forming an almost indispensable part of business activity.

Under the Communist dictator Nicolae Ceausescu, Romanians were denied almost all consumer goods and initiative was extinguished. For the foreign traders who got on the bandwagon first, therefore, the country provided rich pickings, with the most successful moving from street stalls and kiosks to open proper businesses, factories and restaurants.

"We have opportunities here that are simply not open to us in Western Europe," says Mr Mohammed, who plans to open a chocolate factory. "Of course we would prefer to be operating out of Germany or Sweden but there is no way those countries would ever accept us."

Under Ceausescu, Romania maintained strong ties with the Arabic world and, to Moscow's annoyance, with China and North Korea. Thousands of foreign students were invited to Romanian universities and cultural exchange programmes were strengthened.

In the aftermath of the 1989 revolution, however, most Romanians hoped the country would turn West and that the West would show interest in Romania. Much was made of its cultural ties to France, its linguistic affinities, penchant for croissants (albeit stodgy ones) and even architectural echoes (Bucharest was known as the Paris of the East before the war and still boasts a replica Arc de Triomphe).

But for all the declarations of support and joy at the overthrow of Ceausescu, few Western countries and companies chose to invest in Romania, most opting for the more prosperousHungary, Czech Republic and Poland. "Of course we would prefer to be doing business with West Europeans but they never really came," said Dan Bordea, a market-stall trader who had gone to the Flora to stock up on cigarettes at $6 (pounds 4) a time for cartons of 200. "The Arabs and Asians filled a gap. And personally, I enjoy doing business with them."

Not all Romanians share his sentiment and some feel the sort of resentment usually reserved for the country's large Gypsy community.

Last year Major Florin Ionescu of the Bucharest police blamed a rise in crime on the presence of so many foreign traders. "They are not really businessmen but are more like explorers digging for gold," he said. "Take the Chinese. They will come here with five shirts and leave two months later with $10,000 stuffed in a suitcase."

Nicolae Vacaroiu, the Prime Minister, also claims the Arabs and Asians are little more than "speculators and smugglers" whose presence in the country has had a negative impact. Rather than outlawing them, however, he predicts that they will be squeezed out of the market as the country's economy reforms and matures.

In the Flora market, meanwhile, business is thriving. "Some people here think that we Arabs are stealing money from Romanians but everything we make is only through our business," says Ali, another Iraqi trader. "The truth is that the Romanians don't really like us here but they do like our goods - and especially our cheap prices."