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Romania in the European Economy. Prof. Gabriela TIGU, PhD Vive-Rector Bucharest University of Economic Studies (ASE Bucharest) gabriela.tigu@ase.ro. GDP in 2010. 9. 8 00 EUR. 5.700 EUR. 10. 400 EUR. 3.192 EUR. 4. 60 0 EUR. 4.220 EUR. 3. 3 00 EUR. 4 . 720 EUR. 2. 661 EUR.
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Romania in the European Economy Prof. Gabriela TIGU, PhD Vive-Rector Bucharest University of Economic Studies (ASE Bucharest) gabriela.tigu@ase.ro
GDP in 2010 9.800 EUR 5.700 EUR 10.400 EUR 3.192 EUR 4.600 EUR 4.220 EUR 3.300 EUR 4.720 EUR 2.661 EUR Sursa: Eurostat
GDP in agriculture - % in total 2,9% 6% 4,8% 7,51% 5,3% 8% 9,8% 8% 16,8% Sursa: I.N.S.
GDP in industry - % in total 22,5% 26,4% 16,4% 17,16% 23,1% 19,2% 24% 9,5% 8,9% Sursa: I.N.S. Datele sunt pe anul 2009 pentru Muntenegru, Albania, Bosnia-Herţegovina, Macedonia, Serbia
GDP in tertiary sector / services - % in total 55,5% 47,6% 59,3% 55,74% 63,5% 54,5% 53,6% 59,1% 51,2% Sursa: I.N.S. Datele sunt pe anul 2009 pentru Muntenegru, Albania, Bosnia-Herţegovina, Macedonia, Serbia
GDP/capita(euro) in different counties in 2010 3940 2653 3680 3292 4054 4040 4168 3043 5354 7625 4308 4135 2377 3924 6119 5709 4048 8218 6412 3242 3938 6923 5080 3708 7712 5950 4537 3806 4446 4067 5753 4015 3860 3532 3460 6709 3570 3484 3032 4313 Bucureşti: 14289 Ilfov: 9767 Sursa: Comisia Naţională de Prognoză
Inflation in 2010 4,7% 6,1% 1,1% 2,1% 3% 6,5% 1,6% 0,5% 3,4% Sursa: Eurostat pentru România, Bulgaria, Ungaria, Croaţia. Oficiile Naţionale de Statistică pentru Macedonia, Albania, Serbia, Muntenegru, Bosnia Herţegovina.
Unemployment rate in 2010 11,2% 7,3% 11,8% 27,2% 10,2% 19,2% 32% 19,6% 15% Sursa: Eurostatşi Vienna Institute for International Economic Studies, Country expertise
Unemployment rate in different counties 2010 6,0% 6,3% 6,0% 7,4% 8,2% 6,9% 6,3% 7,8% 5,8% 4,9% 8,8% 7,9% 11,4% 7,5% 5,2% 9,6% 9,6% 5,8% 3,7% 7,1% 7,5% 9,8% 8,1% 9,7% 7,4% 8,4% 8,5% 7,8% 9,6% 7,7% 8,6% 8,5% 9,6% 9,8% 8,2% 5,7% 9,0% 8,4% 9,8% 10,8% Bucureşti: 2,3% Ilfov: 2,8% Sursa: I.N.S
Gross average earnings (euro) in 2010 735 EUR 449 EUR 1054 EUR 622 EUR 328 EUR 461 EUR 491 EUR 715 EUR 246 EUR Sursa: Vienna Institute for International Economic Studies, Country expertise
Net average earnings(euro) pe judeţe în anul 2010 243 257 241 251 315 253 251 244 255 339 245 289 242 285 289 276 243 352 241 307 340 331 283 284 314 311 247 284 355 277 255 262 254 303 275 328 233 261 306 277 Bucureşti:462 Ilfov:409 Sursa: I.N.S.
Fiscality2011 PROFIT 10% /19% TVA 25% PROFIT 16% TVA 24% PROFIT 20% TVA 23% PROFIT 10% TVA 17% PROFIT 10% TVA 20% PROFIT 10% TVA 18% PROFIT 10% TVA 18% PROFIT 9% TVA 17% PROFIT 10% TVA 20% Sursa: Agenţii naţionale de promovare a investiţiilor
The dynamics of companies in 2005 – 2010 Sursa: O.N.R.C.
The sectoral structure of companies in 2010 * Societăţi comerciale cu participare străină la capital Sursa: O.N.R.C.
Investiţii străine directe atrase în anul 2010 (mld.euro) 1,20 mld. EUR 2,69 mld. EUR 0,44 mld. EUR 0,05 mld. EUR 1,64mld. EUR 1,00 mld. EUR 0,22 mld. EUR 0,57 mld. EUR 0,83 mld. EUR Sursa: Vienna Institute for International Economic Studies, Country expertise
Evoluţia investiţiilor străine directe în perioada 2000 – 2011 (mil. euro) Sursa: Banca Naţională a României (B.N.R.), date provizorii pentru anul 2010 şi pentru primele 5 luni din anul 2011
Top 10 ţări* care au investit în România în anul 2010 I. OLANDA 27,03% X. GRECIA 3,47% II. AUSTRIA 11,3% III. GERMANIA 8,48% IX. ELVEŢIA 4,9% IV. CIPRU 7,15% VIII. Marea BRITANIE 5% V. FRANŢA 6,55% VII. SPANIA 5,06% VI. ITALIA 5,13% * După capitalul social subscris Sursa: O.N.R.C.
ENEL GREEN POWER 33,3 mil. euro EGGER 7,2 mil. euro MKB ROMEXTERRA BANK 44.3 mil. euro GEDEON RICHTER ROMANIA 27.3 mil euro ALTEX 8,7 mil. euro LAPP INSULATORS 11,3 mil. euro DELPHI DIESEL 15,0 mil. euro SHINHEUNG ELECTRONICS 9,8 mil. euro RAFO 43,4 mil. euro BARLINEK 42,4 mil. euro INTESA SANPAOLO 27,5 mil. euro INFOPRESS 10,9 mil. Euro CONTINENTAL 12,2 mil. euro OBRIST EASTERN EUROPE 8,8 mil.euro OLYMPUS DAIRY 20,7 mil. euro ARCELLORMITTAL 10,9 mil. euro BUNGE ROMANIA 40,8 mil.euro ROSIA MONTANA GOLD CORPORATION 123 mil. euro KRONOSPAN 21,1 mil. euro FERAL 20 mil. euro ARCELORMITTAL 89 mil. euro ADAMA MANAGEMENT 41,2 mil. euro MEDIA INDUSTRIES 21,4 mil. euro ROMPETROL 184.7 mil. euro EUROPOLIS REAL ESTATE ASSET MANAGEMENT 235.2 mil euro UPC ROMANIA 233.4 mil euro GARANTI BANK 185.3 mil euro GRAN VIA ROMANIA 114 mil euro ADEVARUL HOLDING 109.9 mil euro REAL - HYPERMARKET ROMANIA 89.2 mil euro ALPHA BANK ROMANIA 73.7 mil euro COGEME SET RO 6,3 mil. euro KOYO 8,9 mil. euro PIRELLI 96.1 mil. euro LUFKIN 28,2 mil. euro Sursa: O.N.R.C. * Dupa capitalul social subscris
Structura comerţului internaţional pe grupe de produse în anul 2010 Sursa: I.N.S.
Top 10 centre universitare* IV. Iaşi 11.069 III. Cluj-Napoca 11.918 X. Târgu-Mureş 2.162 VIII. Galaţi 4.903 VII. Sibiu 5.500 VI. Timişoara 8.897 II. Braşov 22.796 IX. Piteşti 3.057 I. Bucureşti 71.972 V. Craiova 9.241 Sursa: I.N.S. * Absolvenţii deînvăţământsuperior public şi privat, an universitar 2009 – 2010
Romania has made significant progress over the past 3 years Stabilization of the Economy: Improvement in the fiscal balance Stabilization of the exchange rate Lower risk premium and interest rates Record low inflation Stabilization of the banking system Improvement of external imbalances
The Fiscal Balance Romania: Cash Fiscal Balance (% of GDP)
The Fiscal Balance Romania: Structural Fiscal Balance (% of GDP)
The Exchange Rate National currency against the euro (index)
Banking Sector Stability Banks remain well-capitalized Liquidity in the system is high No banks in Romania have failed
So stabilization has been fairly successful, but what about growth?
Economic Growth Romania: GDP Growth Comparative Growth
But what about sustainable, long-term, high growth? How does Romania converge with richer EU countries? Sustained growth is different from economic recovery
Romania and Economic Institutions Is Romania’s economic structure well-adapted for stable, high economic growth? I would say not yet. Difference between “policies” and “institutions”
Romania’s growth challenge 0. Maintain macroeconomic stability 1. Increase the quantity and quality of capital in the economy 2. Increase the quantity and quality of labor 3. Improve the physical infrastructure that firms and workers use (roads, railways, electricity, water, etc.) 4. Improve the institutional infrastructure
1. How can Romania increase Capital? Investment • Financial sector: • Assure good functioning of the banking system • Reduce country risk interest rates down, investors come • Absorb EU investment funds! • Privatization, private participation
2. How can Romania increase Labor? Improve market functioning higher productivity Higher labor force participation Reduce informal economy formal economy Human capital: Education and training
3. Improving physical infrastructure EU funds absorption Prioritizing public investment Attract private capital/improve efficiency of public enterprises in infrastructure Improve regulatory framework Embedded technology vs. innovation
3. Improving physical infrastructure EU funds absorption Prioritizing public investment Attract private capital/improve efficiency of public enterprises in infrastructure Improve regulatory framework
4. Improving the “institutional” infrastructure • The laws, norms, institutions (public and private) and customs that determine the economic environment. • It is the rule of law, but also much more. • Examples: constitutions, the EU acquis.
4. Improving the “institutional” infrastructure • Structural reforms under the IMF/EU program have aimed at improving policies, sometimes with improvements in institutions. • Examples: • Pension reform (policy and institutions) • Fiscal responsibility law vs. deficit reduction • SOE reforms, privatization
4. Improving the “institutional” infrastructure • But much more is needed: • Legal system reforms • Need to make the system more efficient, more predictable, less costly (in money AND time) • Public sector reforms to improve efficiency. • Functional reviews • Tax optimization • Simplify and reduce bureaucracy • Improve regulatory framework
4. Improving the “institutional” infrastructure Legal system reforms Public sector reforms to improve efficiency Improve regulatory framework Attack corruption “Simplicity, transparency, accountability”
Conclusions • Romania has many characteristics needed for sustained growth: • Macroeconomic stability has been regained and may be more robust this time • Geographic advantages • Natural resources • Large, educated population that is underutilized
Conclusions • Policies have improved, but institutions are a challenge • Legacy of communism • Imported institutions from the EU, but not complete or ideal. • Rent-seeking behavior vs. wealth creation. • Institutional stability and efficiency needed for investment and innovation.
attractive, rich and various a diversity of relief forms – mountains, hills and plateaus, plains, coastal zones -, flora and fauna, thanks to it geographical position. Romania’s environment
Romania - the country of the Carpathians, the Danube and the Black Sea • The Carpathians make an almost compact ring, with the Transylvania Plateau inside • Forests cover over a quarter of the country and the fauna is one of the richest in Europe including wolves, bears, deer, lynx and chamois.
Romania has the greatest surface of the hydrographic basin of the Danube, controlling 38% of the navigable course. The Danube forms the southern boundary of the country terminating in the Delta on the Black Sea, a heaven for countless native and migratory birds. Romania - the country of the Carpathians, the Danube and the Black Sea
And finally, the country is located on the western coast of the Black Sea with a marine opening of 245 km, which confers on it a special status. Romania - the country of the Carpathians, the Danube and the Black Sea
At present, Romanian tourism industry is characterized by the following indicators: • 7.5 million foreign visitors in 2010 (down from 8.9 million in 2008…); out of which, 7.1 million visitors are coming from Europe (the most important markets being Moldavia, Bulgaria, Germany, Italy, Turkey, France, Russia and Spain); • 10.9 million outbound Romanian tourists (same year); the main destinations are Italy, Greece, Hungary, Bulgaria, Spain, Austria and Turkey; • more than 1,000 million US Dollars revenue from international tourism, but this amount is quite low in comparison with other European countries; • 3,405 millions US$ in GDP (or 2.04%) and • 270,000 jobs (3.2% of the total number of employees in Romania), showing a quite low participation of the tourism in the total Romanian economy (WEF, 2011).