Tomorrow, ten European states become full-fledged European Union members. However, although Romania had set out to obtain the EU member status at the same time as the ten countries, it has been losing ground and will only join the Union in 2007.
Although three years don't seem much at first sight, they account in fact for investments worth tens of millions of dollars that will elude Romania until 2007, going to countries that provide a safer business environment, with strict European rules, which are always obeyed. Thus, the gap may actually widen instead of becoming narrower.
But who or what is to blame for this gap? Businessmen and even politicians blame the political class, which rather stopped development instead of boosting reform. The various governments failed to set and enforce the right strategy. The so-called economic strategies promoted the grey area of the economy instead of helping efficiency, productivity and investments.
"I spent eight years in Poland, the Czech Republic and Slovakia and I am not surprised they have been accepted to join the EU, because they fully deserve it. Romania did not understand that talk means nothing, that facts are all that counts," says Paul Nuber, general manager for Romania of Nestle.
George Copos, owner of the Ana Group (operating in industry, tourism and services) thinks that the difference between Romania and the ten new member states stems mainly from the authorities' way of handling foreign investments.
"Whereas Hungary, for instance, sold almost all of its state-owned enterprises in only a few years to significant foreign investors, we are still struggling to sell companies such as National Oil Company Petrom and CFR (National Railway Company i.e.)," Copos maintains.
The Romanian businessman feels that the low level of foreign investment can also be grounded on the critical situation in infrastructure, which, instead of linking Romania to Western Europe, has rather widened the gap. Copos also says that the gap was caused by the different mentalities and business culture. "Although we did set some rules bound to get us closer to the capitalist standards, very few actually obeyed them. This situation continues and, as a businessman, one can only be frustrated when noticing the different treatments that the authorities are applying to the companies. I believe now is the time that the Government started showing the yellow card to those that are not playing by the rules," Copos concluded.
The flawed management visible in all of the key economic sectors and the legislative chaos are, in the opinion of Stefan Varfalvi (head of industrial group IMSAT Bucharest) the elements that contributed the most to creating the gap between Romania and the ten countries joining the European Union on May 1, 2004.
"Furthermore, there were no national support strategies for those fields where Romania can become competitive in Europe. The Ministry of Economy and Industries, for instance, has been more concerned with the big national companies, forgetting that Romania had other industries, as well. I'm not talking about centralised management, but the design of certain strategies able to boost investments in various sectors," Varfalvi stated.
However, others beg to differ. "The gap between us and the countries that are now joining the EU has been apparent ever since the beginning of the '90s, both in terms of structure and business culture. After '89, most of the Romanian companies had no idea about what exactly a market meant. However, I do believe that this gap has shrunk in the past few years," says Horia Ciorcila, one of the main businesspersons in Cluj.
Ciorcila is among the significant stockholders of cable TV company Astral Telecom (the second-largest player on the market) and of Banca Transilvania. Ciorcila is also the bank's president.
The businessman feels that Romanian entrepreneurs would have managed to build big companies even if the big, strategic investors had come earlier in Romania.
"The local companies do not benefit from massive financial backing, as the branches of the big multinationals do, but they are flexible, they know the market better and take less time to make decisions," Ciorcila says. zf@zf.ro
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