Assessment of Romania' S Economic Potential
Romania has been in the center of the media coverage since the President of the European Commission J.M. Barroso announced to the Members of the European Parliament in Strasbourg on October 3, 2006 that both Romania and Bulgaria would enter the European Union on January 1, 2007. This move had presented economic attraction in the form of popular democracy. This report will examine the effectiveness of Romania as an interesting place for investment and the various sectors that would be of interest.
This decision of the Commission, which was taken after months of negotiation and an in-depth ?screening? of the measures implemented, has of course been motivated by the important achievements of Romania and its ability to compete with other member-states. This eastern Balkan country has indeed obvious advantages.
The first characteristic that obviously makes Romania attractive to foreign investors is its importance in terms of territory and population. Romania is indeed the 2nd biggest East European state that entered the European Union, just after Poland and far above others.
There are 23 million inhabitants, and this big territory shares boundaries with several states Bulgaria, Serbia, Hungary, Ukraine, and Moldova. Romania constitutes thus an important market, especially if one considers the rising GDP per capita (with an AAGR of more than 5%) and purchase power of Romanians in the past 10 years.
Romania constitutes a real ?Latin island? amidst the Slav world, as its name clearly indicates. Thus Romania has close ties with other Latin countries, but has developed good relations with its Slav neighbors, even if Romanian nationalism remains strong (as it had already been developed under the reign of Nicolae Ceausescu).
But the fact that even Hungary supported Romania's candidature to the EU underlines its integration in the region. This explains another great advantage of Romania: the ability of its population to learn and speak several languages. Many Romanians speak several Latin languages: French (50% understand it at least), Italian, Spanish. And the importance of ethnic minorities (Hungarian, Roma, Germans) is another source of language diversity.
The Romanian labor force (about 9.66 million people) benefits also from a reputation of being hard working and with a good academic formation (especially in science) and a relative high productivity, as Romania has some of the lowest labor costs in Europe. This is especially true in the sector of telecommunications: Romania is one of the fast-growing IT markets in Eastern Europe.
Tags: Romania; economic potential; an assessment