Romania has 25 competitive advantages, 49 disadvantages and 22 neutral indicators, which suggests that the country needs to improve its performance, according to the ‘2011 Romania Competitiveness Report’ conducted by AmCham Romania.

The survey looks at six main policy areas: the general competitiveness indicators, public administration, legal framework, human resources, physical infrastructure and financial and monetary policy. Within the seven country comparison group (Romania, Austria, Bulgaria, Czech Republic, Hungary, Poland and Slovakia) Romania performs around average in general indicators, public administration and physical infrastructure, and below average in human resources and fiscal and monetary policy. “To improve on this performance, Romania has to craft policies which address deficiencies in infrastructure and human resources. Both areas will likely require significant improvement, which will be difficult to achieve without substantial increases in the amount of fixed capital in the country,” according to the study.

“The report is not meant as a ranking exercise, which is relative in time and can be misleading. Although it does make comparisons, the report does so in order to understand better how Romania’s performance varies from its fellow European economies,” stated Alexandra Gatej, AmCham Romania President.

The responses of 200 CEOs in Romania, questioned for the survey, also identified problems in the country’s infrastructure and fiscal policy. However, about 57 percent of them said that they will increase capital investment in Romania in the next 5 years, while just 4.9 percent think that their investments will decrease. Moreover, 64 percent of the CEOs expect their average number of employees in Romania to increase by 50 percent or more in the next 5 years, while 5.9 percent say the number of employees will decrease.

Talking about this survey, Romanian President Traian Basescu said, “ I don’t have the means to make an analysis as the study has done, but the survey shows a contradiction between the managers’ hopes and visions about increasing their investments in Romania and the grades that appear. If I was an investor I wouldn’t put my money in a country that received a grade of 2.25 for competitiveness, and yet, the managers interviewed said they would increase investment and employment.”

Also present at the release of the survey, the US Ambassador to Romania Mark Gitenstein said, "the business environment here is the primary ingredient in attracting investment to Romania. There's a lot of data in this survey that indicates that investments will come to Romania next year, based on transparency.”

In order to increase competitiveness, Romania should use EU funding to develop physical infrastructure, in conjunction with public private partnerships, and strengthen the competitiveness of Romanian companies on the local and foreign markets. The country should also develop a comprehensive and coordinated plan to improve Romanian infrastructure to EU quality and coverage standards as well as developing a clear energy strategy. Investing in intelligent utility network infrastructure, coordinated with a focus on increased renewable energy generation, would also help competitiveness, according to AmCham recommendations. Romania should also increase the quality and accountability of public service, and build administrative capacity at both central and local level and improve the structure and efficiency of government expenditure.

Irina Popescu, irina.popescu@romania-insider.com

(photo source: Sxc.hu)