5 priorities of investment by the romanian authorities 45
5.1 Investment priorities in the sectors transport, infrastructure and telecommunication 45
5.2 Investment opportunities as obtained by the CCIR 48
6 existing donor activities in romania 51
6.1 European Union 51
6.1.1 Phare 51
6.1.2 ISPA 55
6.1.3 SAPARD 58
6.2 EBRD 59
6.3 World Bank 61
7 market opportunities per sub sector 65
Identification and assessment of market opportunities in Romania 65
8 dutch business opportunities in romania 71
9 conclusions 85
9.1 Transport, Infrastructure and communication 86
9.2 Investments priorities in the sectors transport, infrastructure and telecommunication 88
9.3 Donors and Financing 89
9.4 Business opportunities for Dutch enterprises 91
executive summary
The Programme for Co-operation with Countries in Central and Eastern Europe (PSO) aims at supporting the transition of central and Eastern European countries to a market-oriented and sustainable economy. Under this programme, the Netherlands government funds projects, assigned to enterprises in The Netherlands, for the transfer of knowledge and expertise, which should lead to sustainable investment and/or trade relations on a business to business basis.
It was decided to carry out a Transport Sector study for Bulgaria, Romania and Ukraine in order to develop a framework for the development of new transport projects in these countries within the PSO framework.
The main findings for Romania are:
Romania’s economy in the 1980’s was affected by economic policies under which resources were misdirected and maintenance was delayed and deferred. Romania managed to settle its external debt, but the burden that fell on the nation was tremendous.
Currently, Romania is working to overcome the difficulties faced ever since the events of December 1989. The economy is moving towards a market economy. The recent change of government may lead to more emphasis on revitalising state-owned enterprises and a deceleration of the privatisation process.
Foreign investment has been considered a key economic factor since 1990 when the Romanian economy started the change towards a market economy. Romania offers many comparative advantages such as:
A large domestic market (almost 23 million consumers), the second largest in Central Europe;
A good location at the cross-roads of traditional commercial routes, allowing access to over 200 million consumers in a 1000 kilometre radius; Romania is also located at the junction of three prospective European transportation corridors;
A skilled, relatively low cost labour force, well trained particularly in technology and engineering;
A wide range of natural resources, including fertile agricultural land, oil and gas and a significant tourist potential;
Liberal investment legislation based on free, non-discriminatory access to markets and economic sectors.
Subject to the legislation in force, investment is allowed in almost all-economic sectors.
The volume of foreign direct investment recorded by Romania between December 1990- April 2000, was about 4.6 billion USD. The high number of Romanian companies with foreign investment, 74,025, shows that numerous small and medium sized foreign investors discovered the economic potential of the Romanian market and decided to invest there.
The Netherlands is among the top five investors in Romania.
Starting with the last months of 1998, Romania has been speeding up the restructuring process and, by consequence, several large-scale privatisation operations were completed.
Even if the present level of foreign investment is below the Romanian economy potential, mainly due to slower start of the privatisation process, foreign investment has already an important impact in several industrial branches.
In 2000, one of the major targets was the accomplishment of PSAL provisions negotiated by the Romanian Government with the World Bank. The Private Structural Adjustment Loan (PSAL) is a loan agreement worth USD 300 million, which includes major objectives regarding the privatisation. Under the PSAL agreement, 63 Romanian state-owned companies are to be privatised by privatisation agents.
