July 4, 2013
Romania is caught in an unstable circle of fire, at the core of massive movements, thus remaining the only island of economic and political stability.
The political situation in Bulgaria remains unsettled. After the resignation of Prime Minister Boiko Borisov, early parliamentary elections and a new technocrat government led by the economist Plamen Oresharski, the popular movements continue. The protests in Turkey still hold the newspapers headlines and Hungary is confronted with its citizens’ discontent and with European leaders ‘criticism towards its Constitution revision and the overall political context. The Western Balkans haven’t found their peace yet.
In an area of economic instability, the examples of Greece, Cyprus, Slovenia and lately Italy’s coquetry with this status, simultaneously bring about new reasons of concern and constraint, that leads to a generalized feeling of uncertainty.
This creates fear of possible risk contagion for investors, and this is translated into an accounting picture not at all encouraging for Romania: FDI value decreased by approximately 35%, with a total of 322 million euros in the first quarter of 2013. According to data issued by the National Bank of Romania, in the same period of the last year their value amounted to 494 million euros.
Statistics also show that in April it was recorded the highest flow of foreign capital attracted by Romania since the beginning of the year, 111 million Euros.
The fact that we are a pillar of political and economic stability can be interpreted as a great opportunity.
What would that opportunity be? Clearly, that would represent a stability oasis in the eastern part of Europe and the Balkans, an argument that should be politically and economically exploited.
According to an Ernst & Young Agency study – European Attractiveness Survey, Romania is the 6th most attractive European country for investment in the next three years, according to 840 business leaders surveyed by this consultancy and audit company.
Stable Romania in a “seismic zone”
How can Romania’s position be used?
First of all, there should be elaborated two strategies, one for corporations and one for SMEs.
Starting from an institutionalized dialogue with present companies in Romania, be they foreign or domestic ones, there should be created strategic partnerships in order to apply concrete solutions for business.
Sometimes seems easy to spell the word “strategy”, but as a general rule, we all know that is a very difficult word. It involves a lot of responsibility and prudence.
The SME sector has tremendous importance for the Romanian economy, in a context where its potential and the national one are considerable. A range of solutions for SMEs can represent a measure for Romania’s economic recovery and supporting their internationalization effort could be a major benefit, with the opening of other markets, previously aware of the Romanian products quality.
Put it more simply, the National Statistic Institute data show that in the first four months of this year, Romania has exported mainly to the European Union (10.36 billion Euros), representing 71.3% of total exports.
Without a deeper intrusion, we can consider that Romania and Europe need to start exporting to non-EU markets and to emerging economies of Latin America, Asia, the former Soviet states.
Furthermore, Romania can develop national, complementary strategies, to support the European policies. Without moving further away from the European project, national economic policies can now know more accentuated dynamics, reinforced by an economic diplomacy conducted with professionalism. Let’s not forget that a stronger Romania also means a stronger Europe.
To be more explicit, we must learn to be pragmatic, in an era where economics and politics are intertwined in a complex and explosive mixed.
Author : Adrian Marius Dobre