% of GDP
a free service
Soviet occupation following World War II led to the formation of a communist "peoples republic" in 1947 and the abdication of the king. The decades-long rule
of President Nicolae CEAUSESCU became increasingly draconian through the 1980s. He was overthrown and executed in late 1989. Former communists dominated the
government until 1996 when they were swept from power. Much economic restructuring remains to be carried out before Romania can achieve its hope of joining
Update No: 060 - (18/04/02)
The Romanians are at last introducing some bold reform measures. One such is to sell off unprofitable state enterprises for a symbolic one Euro if the
purchaser promises to bring investment.
The ex-communists have got back in, President Ion Iliescu being a long-time functionary of the former Ceausescu regime, as is Premier Adrian Nastase. But they
have clean records all the same and are assured bureaucrats. They know how Romania functions.
The economy is just about recovering from a decade of contraction after the collapse of the communist regime in December 1989. Never has there been such a
devastating event in Romanian history as the overthrow of the Ceaucescu tyranny. But it lead to a decade of recession and retraction, making many of the
population nostalgic for the tyrant and his grim consort, who at least created and supported a rudimentary welfare state.
The backwardness of the reform effort is shown by the fact that 66% of the country's industry is still owned by the state. Clearly, there is massive scope for
improvement, with sales of energy and telecoms to the fore. This is now on the agenda.
The ex-communists, the Social Democrats, are in power for a second time. First time round in the early 1990s they did little. Being unprepared to pay the
electoral costs of the pain involved in transition to a market economy, it was an exercise in populist-inspired 'masterly activity.' But so did the
constantly bickering coalition of centrist and right wing parties that succeeded them that could not agree what to do, and so did little. There is just a
possibility that they have learned their lesson and will forge ahead with reform, as is happening in Poland. They say they are going to. But they would of
course, wouldn't they?
Time will tell; await this space.
FOREIGN ECONOMIC RELATIONS
Romania, Chile to intensify bilateral commercial relations
Chile wants to improve the dynamics of its bilateral commercial relations with Romania and increase the bilateral trade with the country, deputy state
secretary to Chile's Ministry of Foreign relations, Barros Melet, said on 29th March, Rompres News Agency has reported.
Deputy State Secretary Melet, who was received by Romania's Foreign Minister Mircea Geoana, said that though geographically at a far distance from Romania,
Chile wants to penetrate Central Europe through Romania.
The two sides agreed upon the cooperation agenda in the economic field for the next year and searched for possible new ways of entering areas of mutual
Melet said that the two countries can cooperate also from the perspective of Romania's integration into the European Union and the agreement currently being
finalised between Chile and the European Union.
He also said that a key factor in boosting the economic relations is the private sector, as the Chilean delegation participated early this week in a seminar
with EU representatives.
The major areas of interest in the cooperation with Chile are the agriculture, with the Romanian government pushing ahead with the privatisation of
state-owned farms, and the pension funds, where Chile developed a lucrative policy of social protection, said Cristian Colteanu, a state secretary for
foreign trade to Romania's Foreign Ministry.
FOREIGN LOANS & AID
Agreement signed on Chinese aid to Romania
China in the last decades has represented, and continues to represent, for Romania an extremely important partner of strategic interest, Romania wanting to
intensify the bilateral economic cooperation, Romanian Foreign Minister, Mircea Geoana, said at the ceremony for signing a document under which Romania
received nonrefundable aid from China, Rompres News Agency has reported.
The aid worth approximately US$600,000 consists of office equipment, including computers, which will be used in the foreign trade Department of the Foreign
The document was signed, in the presence of Foreign Minister Mircea Geoana, by secretary general to Romania's Foreign Ministry Ion Diaconu, and by China's
Ambassador to Bucharest Chen Delai.
Foreign Minister Geoana emphasised that the relations between Romania and China are developing based on common and time-honoured interests, which the two
states represent in their geographic zones. Geoana said that Romania was particularly interested in relaunching the economic relations with China, given the
development pace of the two countries and the fact that the bilateral commercial exchanges last year stood at US$350m.
Geoana added that a specific plans for identifying new areas of mutual interests, including the involvement of Romanian and Chinese companies in establishing
direct cooperation relations, has been set up at the level of a joint cooperation Commission.
The Chinese ambassador to Bucharest, Chen Delai, confirmed the excellent relations between his country and Romania, stressing that even if the value of the
aid is not very big, it represents a friendship gesture from the Chinese people to the Romanian people...
Nuclearelectrica inks deal with Korean KHNP
Romania's state company Nuclearelectrica (SNN), has inked a deal with Korean Hydro & Nuclear Power Co. (KHNP), for the latter to provide technical support
for the running of the first block of the Cernavoda Nuclear Power Plant.
The deal was signed at KHNP's headquarters in mid-March, the Korean group said in a statement. Besides giving support for the first block, HKNP will help the
Romanian group to set up the second one, which is being constructed now.
Count Dracula gets ready to welcome tourists
Romania will take advantage of the history and notoriety of County Dracula to help boost the tourism industry, New Europe has reported.
A new theme park is in the works, which will be located at Sighisoara, the medieval Transylvanian town. However, many locals resent the development of
Dracula Park, because they don't wish to be associated with vampirism, according to local reports.
But Tourism Minister, Matei Agathon Dan, said that despite the negative remarks about the park, Dracula is something that can't be forgotten. "The Dracula
legend exists whether you like it or not," the minister told BusinessWeek Online in an interview. The park will help bolster Romania's economy.
Questioned as to how the government is involved in the park project, Dan said: "The Dracula Park partnership has three main players: the state (the Ministries
of Tourism, Public Works, Industries and Culture), the local public administration, and the private sector. The state launched the plant with legislation that
formed Romania's first tourism project, the Sighisoara Development Area. Dracula Park is part of that project. The Sighisoara Local Public Administration is
making the land, 121 hectares, available. The private sector will finance, build and mange the park." According to the minister, the first stage of the
project stands at US$35m. Construction of the park is slated for this year and should be finished by the end of 2003. Dan said the project was able to amass
funding via an initial public offering. With nearly 9,000 shareholders, more than US$2m was collected.
"The goal is US$4m, and I am confident we will reach that figure by April 3rd (the deadline for the IPO), he was quoted as saying. "We have exceeded our
expectations regarding funds coming from the public. Now we're negotiating with important investors - companies from Romania and abroad."
INVESTMENT BACKGROUND REPORTS
Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available
in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of
clients or by access to one of our existing specialised reports.
For further information email:
Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly
newnation reports and the complete worldaudit democracy check for the low price of US$12. The print-out would be a good companion to take with you. Having
read it, you might even decide not to go!
To order please click here:
Investment background report