BUCHAREST -- Outside an expensive Bucharest restaurant, a ragged, unwashed, one-legged beggar shouts to a rich Romanian stepping into his shining Mercedes. "Give me a few pennies!" he implores.


It is the kind of scene that imprints itself on the minds of many visitors to Romania.


Inside the Transylvania Restaurant, the wealthy dine on caviar, or spend the equivalent of an average man's daily wage for a small piece of "miti-te" sausage, while down the road homeless people are lunching on gruel in a soup kitchen.


The contrasts, starker day by day, reflect the growing polarization of a nation moving from a socialist past, when differentials were almost invisible, to a free-wheeling capitalist way of life where the fittest and canniest get rich.


A dozen homeless people froze to death on the streets of Bucharest in a cold snap earlier this month, police said. They were the latest casualties of deepening poverty.


It is hard to solve the simplest bureaucratic task -- registering a car, getting a marriage certificate, seeing a doctor -- without bribery. Even priests and grave-diggers routinely have to be bribed to perform a funeral.


Average monthly wages are less than $50. Millions of people turned to risky pyramid money-spinning rackets, hoping to get rich without effort. Many got stung when the schemes collapsed.


With annual inflation of about 300 percent, this country of 23 million people is expressing doubt about President Ion Iliescu, in office for the past four years.


He came to power in the aftermath of the December 1989 revolution in which dictator Nicolae Ceausescu was overthrown and executed.


He has presided over two elections since then and there are no political prisoners in the country these days. But the U.S.-based Freedom Forum, which promotes free press and free speech, described Iliescu's Romania in February as a country that was only "half-free" in democratic terms.


"You can hardly call the place fully free when Iliescu controls the television, which will influence any election, and when the same old communists control industry and line their pockets with its profits," said a Western diplomat.


Reforms such as privatization, which should have handed a share of the patrimony to the ordinary Romanian, have ground to a halt under Prime Minister Nicolae Vacaroiu, hand-picked by Iliescu after inconclusive elections 18 months ago.


From among more than 30 leading communists who were close to Ceausescu and who were jailed for serious crimes, including mass murder, after his demise, only one is in jail now. The rest have been let out on various pretexts.


"There appears to be a conflict between Iliescu's will to reform the country, which may be sincere, and his ability to understand and implement free-market economics. He always seems to be protecting the old guard," another Western diplomat said.


As a result Romania seems to be lingering in a protracted limbo between communism and capitalism. Young people want to emigrate, or at least to work abroad temporarily, and few ordinary people believe life will get better. The price of bread has gone up nine times in as many months.