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ROMANIA


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 44,428 38,700 38,200 52
         
GNI per capita
 US $ 1,850 1,720 1,610 108
Ranking is given out of 208 nations - (data from the World Bank)

Books on Romania

REPUBLICAN REFERENCE

Area (sq.km)
237,500

Population
22,271,839 

Capital 
Bucharest 

Currency 
Leu

President 
Ion Iliescu

Private sector 
% of GDP 
40%

  

Background:
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 the EU. 

Update No: 087 - (27/07/04)

Local elections pointer to national ones
Romanians went to the polls on June 20th for the second round of municipal elections seen as a key test ahead of legislative and presidential elections six months away. 
Candidates were vying for a total of 1,843 mayoral seats with 1,294 others already attributed during the first round on June 6. Romania's ruling Social Democrats were trying to wrest control of major cities from the hands of the opposition. 
They did badly, not helped by a serious breach between President Ion Iliescu and Prime Minister Adrian Nastase, who belong to the ruling Social Democrat Party (PSD).

The blood feud
The tensest political duels are usually between those on the same side. This is so in Roumania between president and premier. The next six months are likely to decide the outcome.
Nastase remains the president of the party and he will be the one to make the lists of MPs, even if the current president of Romania were return to take over the PSD. Nastase is carrying out a restructuring of the party. It is only an apparent victory for the Prime Minister. In reality, the moments of tension have only caused a deep weakening of the two politicians. Both Iliescu and Nastase are less credible to the electorate than of yore. 
The veteran Iliescu is still respected for being the one figure to stand up to the former dictator Ceaucescu. Backed by the Russians and having his own power base in Bukovina in the north, next to what was then the USSR, Ceaucescu was afraid to touch him. Nastase has no such aura; indeed, he is widely suspected of being corrupt. But he has the advantages of youth and energy. He heads the party as well as the government. He must be the favourite, with all the resources of patronage at his disposal.
Despite international pressure, despite being penalised by the electorate, despite the fuss in the media, the first two politicians of Romania put up reasonably with corruption, suspect privatizations, with the confusion (always beneficial to their men) in the judicial system. Even if now he declares himself a opponent of local barons and is keen on having a clean party, Iliescu took the side of some of them. He gave them credibility by his visits to their counties. 
The formalities are kept up. Each has too many skeletons in the cupboard to want to play it really dirty. Iliescu and Nastase pretend not to see the group of businessmen around the premier of dubious provenance and disposition. Nastase pretends to respect the patriarch position of Granny (the nickname of IIliescu). It has been a deaf fight between two poles of power, each of them pretending to play the game democratically, that he respects the other one. 
When Ion Iliescu wanted a clean party, a penalizing of the corrupt, but without directly supporting Nastase for the succession to the presidency, the younger one opposed him and put himself into a situation to take risks. Nastase played to the limit. He forced the members of PSD to divide into two camps, some to take sides with Iliescu and some with him. But a house divided against itself is the frailer for it 
The war between Iliescu and Nastase meant a risk for Romania too. Both of them played with fire. In the two days of tension, many embassies monitored the crisis. It seemed that it might have slipped into a permanent rift and political instability, which for Romania's EU integration process would have been simply fatal. 
The two men stepped back from the brink of 'civil war,' as it were. Nastase met with Iliescu. He obtained much of what he requested, but he could not convince anyone anymore that his relationship with the president had returned to normal. 
The entire crisis seems rather a way of dodging responsibility for the defeat of the PSD in the local elections. And the circus, instead of rehabilitating the party, leads to a continuous decline of the two politicians, seen by the population in their true colours. Ion Iliescu and Adrian Nastase, by their blunders and quarrels, together lose points to the opposition. The end-result may be that neither makes it in the coming elections.

Opposition regroup
Various figures in the opposition are scenting victory. The former minister of justice, Valeriu Stoica, has launched a fresh political project. The same figure backed the appointment of Theodor Stolojan as leader of the National Liberal Party (PNL), as well as the setting up of the Alliance for Justice and Truth between the Liberals and the Democrats. (Shades of the Liberal Democratic Party in the UK, once headed by Paddy Ashdown the current International High Representative in Bosnia!)
Stoica is now coming up with the idea of merging the two blocs. That is of the PNL and the Alliance between the Liberals and the Democratic Party (PD), which both did well in the elections.
What is it that Stoica actually advocates? The fact that the merger would hold the balance of the political scene. That the fresh party resulting from the PNL-PD merger would trigger a "functioning, unitary, indivisible political construction, which would also enjoy the support of a powerful European family." All these parties have good relations with their equivalents elsewhere in the EU, such as the UK's LDP.
Furthermore, the outcome of the local polls would be one of the strongest arguments in favour of this project. The disarray inside the ruling party PSD and the electors' reorientation would have even set the premises for the parliamentary and presidential polls to be won by another political force, claims Stoica. 
The Liberals and Democrats have already started talks about people and offices, although the two parties that formed the Alliance, besides radio and TV statements, have yet to come up with a governing project and programmes. It was just the other day that some Liberals hurried to announce Calin Popescu Tariceanu, on a TV channel, as the future prime minister. And the Democrats mentioned insistently Adriean Videanu for the same office. The euphoria after the local polls is still dominating the Alliance for the time being. However, the Alliance is still far from gaining consistency and is still acting like some sort of political scarecrow for their opponents and good for raising votes, but undecided when it comes to making solid programmes, projects, structures, work and documentation teams.
Against such a background, Stoica's proposal has got at least a theoretical value. It offers a work formula to the opposition, aimed to increase the peoples' trust but also to block the way back to the unfortunate experience of the former centrist coalition CDR (inside which both Liberals and Democrats made a substantial contribution). To what extent the project launched by Stoica stands any chance of becoming reality is yet to be seen. A good idea has got off to a bad start, showing that the Liberals have gained courage, but not yet vision as well.

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AUTOMOBILES

Renault unit boosts car sales


Renault Romania said recently that it sold over 25,000 cars since it entered the Romanian market in the last three years and reached the leading position among imported car brands, New Europe reported. 
Renault Romania general manager Nicholas Ianculescu said that despite market fluctuations, the company had managed to post continuous growth, from 706 units sold in 1999 to 10,086 units sold in 2003. The Associated Automobile Makers and Importers (APIA) said that Renault was the best selling foreign car brand in Romania, with 1,783 Clio units and 1,665 Megane units sold in the first five months of this year. 

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ENERGY

Power privatisation continues

Romania gave the green light to five foreign companies to bid for stakes in two state-owned electricity producers, New Europe reported recently. 
Bids for 24.6% stakes in Electrica Oltenia and Electrica Moldova had met its conditions and could proceed, the economy ministry said. The winning bidders will initially take 24.6% stakes, but they will raise to majority stakes via share offerings. The five foreign bidders now in the running are: AES of the United States, Germany's E.ON, Greece's Public Power Corporation, CEZ of the Czech Republic, and Union Fenosa International of Spain.

Russia's Gazprom to submit bid in Romanian natural gas company privatisation

The Russian Federation-based group Gazprom is planning to submit a final bid for the privatisation of the company Distrigaz Sud, group President, Aleksey Miller said on an official visit to Romania, Rompres News Agency reported.
"In the talks we held at the Ministry of Economy and Trade with Minister, Dan Ioan Popescu, we tackled the topic of privatisation of the two gas distributions. After the talks we will return to Moscow and finalize the bid for Distrigaz Sud. We hope we will win," Miller told a news conference.
He added that Gazprom will take part in this privatisation without a partner, without getting into a consortium with another investor. 
"We have chosen this company because we have confidence that, by signing a long-term contract, we will lay foundations for a very good cooperation in the field. We have chosen Distrigaz Sud taking into account our priorities. We could not win both companies, so we chose Distrigaz Sud," Miller said, adding that from Gazprom's point of view, any investor winning the tender for Distrigaz Nord will be good.
The final bid to be submitted by Gazprom will include, Miller stressed, the price offer. "I hope this offer will allow us to win the tender," he added.
The distributions privatisation calls for the sale to a strategic investor or a consortium of investors of a stake accounting for 51 per cent of the share capital of Distrigaz Sud or Distrigaz Nord.

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FOREIGN ECONOMIC COOPERATION

Romanian premier, Turkish president discuss cooperation

Prime Minister Adrian Nastase met visiting Turkish President, Ahmet Necdet Sezer, during a breakfast in Snagov (near Bucharest), Rompres News Agency reported.
Attending the meeting were also State Ministers, Dan Ioan Popescu, and Ioan Talpes, Foreign Minister, Mircea Geoana, Culture and Religious Affairs Minister, Razvan Theodorescu, Health Minister, Ovidiu Branzan, and Chancellor Minister, Alin Teodorescu.
The discussions referred to the evolution of the high-level political dialogue, the economic cooperation and the experience exchange in terms of efforts for EU entry, a governmental release informs.
The substantial increase in the economic cooperation - which developed from commercial exchanges, mainly textile and agri-food products, to large-scale investments - has been emphasized.
The officials agreed that there is a cooperation opportunity between the two countries in the energy sector, since Romania and Turkey have access to important energy routes which may contribute to the diversification of the energy sources.
The dialogue also approached the subject of Romanian-Turkish international cooperation as NATO countries and in their relations with the EU. Prime Minister Nastase voiced a willingness to send to Turkey a Romanian expert team on EU integration matters, since Romania has the most recent expertise on negotiating the EU integration chapters. 

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FOREIGN LOANS

EBRD offers funds to Alpha Leasing

The European Bank for Reconstruction and Development (EBRD) approved a €5m loan to Romanian company Alpha Leasing, the company said recently. The five-year loan will be used to finance small- and medium-sized enterprises (SMEs) leasing contracts, Alpha Leasing said. The SMEs could access the money to finance the acquisition of assets, equipment and cars, said Aris Gogos, the general manager of Alpha Leasing. The upper limit of the leasing contracts was set at €250,000. Gogos estimates that the average financing for small firms will be around €10,000. Alpha Leasing posted a €2.04m profit before taxes last year, New Europe has reported.

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TELECOMMUNICATIONS

Siemens to bring UMTS to Romania

Siemens is prepared to introduce in Romania the Universal Mobile Telephony System (UMTS) as the next step in the development of telecommunications infrastructure, said Dieter Angerer, general manager of Siemens Mobile Romania recently. "Our company's goal is to bring world class technology to Romania," he said. "Our effort to introduce UMTS will take us one step closer to that goal," he added, New Europe reported recently.

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