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Romania Business

Business and Economics

Despite good energy resources, a developed industrial sector and fertile soils, Romania is one of Europe's poorest countries.

Business and Economy of Romania

During the first half of the 1990s, the country experienced good growth; In 2000–08, the economy grew by an average of just over 6 percent per year. The country attracted foreign investment in many sectors of the business sector, including the financial and industrial sectors. In 2007, the country joined the EU

The international financial crisis in 2008 hit Romania hard and was the start of a sharp economic downturn. The country received emergency loans from the IMF, the EU and the European Development Bank against a commitment to reduce government spending. Economic cuts in the public sector, including increased retirement age, lower wages and increased VAT, entailed large popular protests and an unstable political situation.

In 2011 and 2013, the country was able to experience some economic recovery, mainly as a result of good harvests and increased exports from industry, but the country's economy is still weak and major efforts are needed to combat widespread corruption and economic crime.

Background

Following the communist takeover, Romania underwent approximately the same development as the other eastern bloc countries. This meant that, following a Soviet model, the introduction of a planned economy, nationalized production resources and the collectiveization of most of agriculture. Here, too, a changeover took place from a traditional agricultural society to an industrial society with the emphasis placed on the heavy industry (iron and steel and engineering) and the chemical and petrochemical industries. There was talk of a Romanian wonder in this area in the 1960s and 1970s.

During the 1980s, in particular, establishments were used within the aforementioned industry branches to manipulate the growth of certain localities. Problems with energy supply as well as far-reaching exports of agricultural products in order to eliminate external debt led to a serious food shortage around 1980. An increasingly centralist policy and thoughtful giant initiatives in business brought Romania to the brink of ruin in the late 1980s.

The changed political situation during the 1990s led to major restructuring problems in the economy. The new government implemented privatization of state-owned enterprises, reduced government debt and tightened monetary policy, a work that led to improved finances during the early 1990s.

Agriculture

According to countryaah, Romania has a very versatile agriculture. About two-thirds of the country consists of agricultural land, of which fields dominate. The most important crops are wheat and maize, which, among other things, are grown on the Valakian plain in the south, on the Transylvanian plateau in the middle of the country and in the border regions towards Hungary. Vegetables are grown mainly in the vicinity of the larger cities. Potatoes, sunflowers and sugar beets are also common crops. Despite a collectivization of agriculture during the 1950s, the small private plots became of great importance to the country's livelihood.

When Romania entered a severe food crisis in the early 1980s, Ceaușescu considered that the cure was an increase in its agricultural area. In 1984, efforts were made to quickly implement the so-called systemization program, which had as its ultimate goal, until 2000, to eliminate 7,000-8,000 of the country's more than 13,000 villages and to convert the remaining to urban-like locations. Among other things, this would have meant that the country's old village culture was completely destroyed, but only provided a couple of percent increase in agricultural land.

In 1989, the program was canceled; By then, about 500 villages had been demolished more or less. Since then, privatization has increased (now more than 85 per cent of the area is privatized), but too small farming units and a lack of machinery and fertilizers have made agriculture a problematic sector in business.

At the 2007 EU membership, Romania undertook to reform agriculture, but this has been slow and has not led to any significant change in ownership structure.

Forestry

More than a quarter of the country's area, mainly mountain areas, is covered by forest. Forestry is one of the traditional industries, and the forest industry has expanded after the Second World War. Forests are now protected by a nationwide program. Here, a balance is sought between felling and planting.

Fishing

Fishing, which has decreased in importance due to the severe pollution in the Black Sea and in the rivers, today occurs mainly along the Black Sea coast and in the Danube. Fish canning factories are located in Tulcea, Constanța and Galați. Romania also conducts fishing in the Atlantic.

commodity Funds

Romania has large assets in a variety of minerals, which were the prerequisite for the growth of the metallurgical and chemical industry. EU membership led to a need for modernization or closure of certain mines, which greatly reduced the production of several minerals. After new investments to meet, among other environmental requirements, production has again risen.

The most important minerals are iron (for example. In Reșița and Hunedoara in the western part of the country), copper, bauxite, lead and zinc. Romania is also a major producer of coal (southwest and central part), plaster and rock salt; uranium is also mined. Despite its own assets, iron is imported to meet the needs of the steel industry.

Energy supply

Romania's main energy raw materials are coal and natural gas, and to 2/3 the country is self-sufficient (2009). Imports are made primarily of crude oil but also of coal and natural gas. This is due in part to excessive oil extraction and export during the Ceaușescu period, which then led to a significant reduction in production and fuel shortages in the country. The foremost oil-bearing area extends in an east-west band below the South Carpathians. The most important refinery species are Ploiești and Pitești. Oil pipelines go to the Black Sea port of Constanța.

Fossil energy types account for 3/4 of total energy production, nuclear energy for just under 10 per cent and renewable sources for around 15 per cent (2009). Natural gas deposits are found in many parts of Transylvania; they have become increasingly important and constitute 1/3 of their own energy raw materials. This also applies to the coal, which covers 20 percent of the energy demand.

Hydropower is relatively small. Romania shares with Serbia two hydropower plants at the Danube Iron Gate, of which the larger, Iron Gate I, is among Europe's largest in terms of energy production. The wind energy is under strong expansion. By 2020, the goal is for 24 percent of the electricity consumed to be produced by renewable energy types.

Industry

Before the transition to market economy in the 1990s, Romania had a large state-owned heavy industry. Many companies were loss-making and survived thanks to government subsidies. These mainly worked in the steel, iron and machinery industries as well as in the chemical industry. The transition to market economy and the subsequent privatization meant that many of these were closed down.

However, Romania still has a large and economically important heavy industry, mainly metal industry. and chemical industry. During the 00s, an increased investment was made in light industry, such as the production of clothing, textiles and furniture. As has been the case in several other Eastern European countries, international car companies have also invested in Romania. The prime example of this is Renault, which has taken over the main ownership of the car company Dacia.

Romania's steel industry is concentrated mainly on Reșița and Hunedoara and Galați on the Dunarea (Danube). The engineering industry is located in most major cities. The chemical industry is located in Onesţti and Năvodari, among others, near the seaside resort of Mamaia. The petrochemical industry is preferably located at the oil metropolises Ploiești and Pitești. Copper, gold and silver are produced in the country's southwestern parts. Light industry is represented throughout the country, but a certain concentration of high-tech industry is found around the city of Timișoara in the west.

Foreign trade

During the communist era, the Soviet Union was Romania's leading trading partner. The collapse of the Eastern Bloc significantly changed Romania's foreign trade. Through membership in the EU in 2007, Romania has significantly increased its trade with other EU countries. The most important export goods are textile products, machinery, minerals and metals. Imports consist of machinery, fuel and chemicals. The most important trading partners are Germany, Italy and France.

Tourism and gastronomy

Tourism as a source of income has increased in importance during the 2000s. Every year, almost 8 million foreign tourists come, mainly from neighboring countries. On the Black Sea coast are several resorts such as Mamaia, Eforie and Mangalia, and the health-giving lake Techirghiol also has many visitors. In the Carpathians there are opportunities for hiking and skiing.

The scientifically interesting Danube Delta has a rich fauna, while in the old-fashioned transylvania in the central parts there are several notable city centers. A specialty is the country's more than 150 health resorts and health spa.

The mixture of Turkish, Central European, Mediterranean influenced and Russian cuisine applied in a mainly agrarian society has resulted in spicy and refined simple dishes. The tradition of eating what is available during the season and preserving the rest for later use lives strong.

The meal is often started with a smaller sandwich table of dried and smoked meats (always including mititei, small spicy sausages), pickled vegetables (including strong peppers, ardei iute) and cheese followed by soup (ciorbă, on chicken, lamb or veal, often also domestic foods and several vegetables). Sarmale is dolmar, often of pickled cabbage or wine leaves. Carp and pike are available in countless recipe variants, ciorbă de peşte is sour fish soup. The main courses are usually served mămăligă, cornmeal porridge, which fulfills the function cooked potato and bread in the Swedish diet. Another common accessory is salată de vinete, eggplant puree.

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