An Assessment of Romania's Economic Potential

Résumé du document

Romania has been under important media coverage since the President of the European Commission J.M. Barroso announced to the Members of the European Parliament in Strasbourg on October 3rd 2006 that both Romania and Bulgaria would enter the European Union on January 1st 2007. This was of course a major event for Romania and this has necessarily consequences on the economic attractivity of this former Popular Democracy.
Is Romania an interesting place for investment? In which sector should we invest?

Extraits

[...] THIS IS A KEY SECTOR OF THE DEVELOPING ROMANIAN ECONOMY. ANOTHER SECTOR THAT ATTRACTS A LOT OF FDI IS TOURISM. ROMANIA HAS A GREAT TOURIST POTENTIAL THANKS TO ITS DIVERSIFIED TERRITORY: THE GOVERNMENT HAS PROMOTED IN THE 1990S THE DEVELOPMENT OF SKIING IN THE CARPATHIANS IN THE NORTHWESTERN PART OF THE COUNTRY, BUT THE RESORTS ON THE BLACK SEA SHORE STILL NEED INVESTMENT. THE BANK REFORMS AND THE RECENT BANK PRIVATIZATIONS ILLUSTRATE THE BEGINNING OF THE DEVELOPMENT OF FINANCIAL ACTIVITIES IN ROMANIA. [...]

[...] SINCE THE GOVERNMENT RELIES ON TWO PARTIES THAT DON'T HAVE THE MAJORITY, IT'S VERY VULNERABLE. AND THE RELATIONS BETWEEN THE PRESIDENT T.BASESCU AND HIS PRIME MINISTER C.POPESCU-TARICEANU (NLP) ARE TENSE. THE ONLY CEMENT OF THEIR UNION WAS THE DESIRE TO JOIN THE EU BUT NOW THAT THIS GOAL IS ACHIEVED, THE FUTURE OF THIS UNION REMAINS UNCERTAIN. THE DIFFICULTIES OF THE SDP ILLUSTRATE PERFECTLY THE ROMANIAN PLEDGE, WHICH IS CORRUPTION, AN ENDEMIC DISEASE THAT STRIKES THE ROMANIAN ECONOMIC AND POLITICAL SYSTEM. [...]

[...] THANKS TO ITS GEOGRAPHIC SITUATION, ROMANIA IS AT CROSSROADS AND CONSTITUTES A BRIDGE BETWEEN WESTERN EUROPE, EASTERN EUROPE AND ASIA. ROMANIA IS INDEED OPENED TO ASIA AND SOUTHERN EUROPE THANKS TO BLACK SEA LITTORAL (WITH THE HARBOR OF CONSTANTA) AND THE POSSIBILITY TO REACH THE MEDITERRANEAN SEA. MOREOVER ROMANIA HAS A LONG TRADITION OF CULTURE MELTING AND TRADE RELATIONS WITH ITS NEIGHBORS, BUT EVEN MORE BROADLY WITH THE WHOLE CONTINENT (THE EU REPRESENTS 71% OF TOTAL BILATERAL TRADE), ESPECIALLY ITALY AND GERMANY. ROMANIA CONSTITUTES A REAL “LATIN ISLAND” AMIDST THE SLAV WORLD, AS ITS NAME CLEARLY INDICATES. [...]

[...] ITS ADMISSION INTO THE COUNCIL OF EUROPE IN 1993, INTO THE WTO IN 1995, IN NATO IN 2004 AND THE RECENT DECISION OF ENLARGEMENT WERE PROOFS THAT ROMANIA SUCCEEDED IN DEMOCRATIZING ITS INSTITUTIONS AND LIBERALIZE ITS ECONOMY (THE LABEL OF “VIABLE MARKET ECONOMY” GIVEN BY THE COMMISSION IN 2004 WAS A STRONG SIGNAL CONCERNING ITS ECONOMIC ACHIEVEMENTS) SOME SERIOUS HINDRANCES THIS FEATURES ARE HOWEVER NOT ONLY POSITIVE, AND EVEN THE DECISION NOT TO POSTPONE THE ENLARGEMENT TILL 2008 CAN BE SEEN AS BEING MORE INCENTIVE TO CONTINUE AND ACCELERATE REFORMS THAN A POSITIVE ASSESSMENT OF THE EVOLUTION OF ROMANIA. THERE ARE INDEED STILL MANY PROBLEMS IN THIS COUNTRY WHICH EXPLAIN WHY SO MANY PEOPLE FEAR THIS SIXTH ENLARGEMENT (BULGARIA FACING GLOBALLY THE SAME PROBLEMS). FIRST, ROMANIA SUFFERS FROM POLITICAL AND SOCIAL INSTABILITY. IT HAS INDEED TO IMPROVE THE TREATMENT OF ITS MINORITIES. ROMA AS WELL AS HUNGARIANS COMPLAIN OF THE WAY THE PUBLIC AUTHORITIES NEGLECT THEM AND DON'T RESPECT THEIR PARTICULARITIES. [...]

[...] THE PROCESS OF PRIVATIZATION WAS QUITE SLOW IN ORDER TO LIMIT THE RISKS OF BANKRUPTCY OF THESE COMPANIES WHICH EMPLOYED THOUSANDS OF WORKERS. THE LAST PRIVATIZATIONS HAVE BEEN MADE UNDER NEW RULES TO LIMIT THE RISK OF CORRUPTION. THE CRIMINAL CODE WAS REVISED TO MAKE FINES AND SENTENCES MORE SEVERE, THE APPLICATION PROCESS FOR PUBLIC CONTRACTS AND PRIVATIZATIONS WAS MADE CLEARER AND CONTROLLED. THE AIM IS OF COURSE, UNDER THE PRESSURE OF THE EUROPEAN UNION, TO REDUCE THE LEVEL OF CORRUPTION AND IMPROVE THE TRANSPARENCY OF TRANSACTIONS. [...]