the attractiveness of romania’s economy

7/25/2019 The Attractiveness of Romanias Economy

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The attractiveness of Romanias economy for potential Korean investors

Anca Elena Budu

The Republic of Korea and Romania celebrate this year 25 years since the establishment of their

diplomatic relations, on March !, "##!$ %n &eptember, 2!!', the presidents of the t(o countries have

si)ned, in &eoul, the *eclaration re)ardin) the establishment of a &trate)ic +artnership bet(een the

Republic of Korea and Romania and, t(o years later, in uly 2!"!, the Ministers of -orei)n Affairs have

si)ned the .ommon Action +lan for the implementation of the &trate)ic +artnership$ Also in 2!!' the

Bilateral .ommerce and %ndustry .hamber Romania/Republic of Korea has been created, openin) its

head0uarters in Bucharest$

The relations bet(een the t(o countries have been very fruitful for the t(o sides in many areas, but the

economic ones have been, by far, the most important ones$ Accordin) to the Romanian statistics, only in

2!"1 the total amount of the Korean/Romanian echan)es has been of "$! billion 3&*, (ith a

commercial bilateral balance of 2"2$41 million 3&* in favor of the Korean side$ %n terms of investments,

there are 221 companies (ith Korean capital operatin) no( in Romania$ n *ecember ", 2!"1, the total

amount of the Korean investments (as of 2!2 million 3&*, occupyin) the 25 thplace amon) the forei)n

investors on the Romanian mar6et$ The real value of the Korean investment is actually hi)her 7about 5!!

million 3&*8, as some investments, such as that of &amsun) or &T9 fi)ure as :erman and, namely,

;or(e)ian, because the &amsun) re)ional center from :ermany and the &T9 re)ional center in ;or(ay

coordinate the Romanian subsidiaries$ The principal domains of the Korean investments are automobile

production, shipyards, chemical industry and %Tin &hippin) .o$, ?td$

7a)riculture8, *on)yan) E


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institutions and )overnment policies and labor mar6et efficiency and financial mar6ets$ Romania ran6s

5, ascendin) si positions since the former survey$ The survey (as conducted by intervie(in) "2!

eecutives of companies operatin) in Romania$ The overall score obtained by Romania is 1$2 points

7after receivin) 1$! points last year8 on a scale of one to seven$ Romania has hi)h scores in indicators of

macroeconomic environment, (here it reached the 1 thposition in the (orld, and mar6et siCe, 1rd$

At a European level, accordin) to the ED annual report European Attractiveness &urvey 2!"5, published

on May 24, 2!"5, Romania climbs for the first time in top "5 most attractive countries in Europe

re)ardin) the number of -*% 7-orei)n *irect %nvestment8 pro>ects attracted in 2!"1$ %n 2!"1, Romania

succeeded in attractin) 2 -*% pro>ects, "#F more than in 2!"$ -urthermore, Romania became the

sith country in Europe considerin) the number of -*% >obs created 7"!,'#28, eceedin) &pain, Tur6ey

and &lova6ia$

2$ hy is Romania economically attractive for the Republic of Korea@

All above bein) said, (e understand that Romanias economy is on an accessional pace and (e can

epect improvements in time$ =o(ever, (e shall point out the specific characteristics of the Romanian

economy that ma6e it a )ood destination for investments and eports from the Republic of Korea$

hen ma6in) an investment abroad, any business person shall firstly loo6 at ho( affordable (ill the

resources in the destination country be, so that he could maimiCe the profit and minimiCe the investment$

-rom this standpoint, Romania has a very stron) assetG the cheap 0ualified labor force$ Accordin) to the

Romanian ;ational %nstitute of &tatistics, the net avera)e salary re)istered in 2!"5 (as 3&* 11$ The

;ational .ommission for +ro)nosis estimates an avera)e net salary of 3&* 12 for the end of this year

and, for 2!", the amount of 3&* 1#$ %n Korea, the avera)e monthly (a)e is of 3&* 21$5, ma6in)

the employment of a Romanian (or6er more convenient for the Korean employer$ Moreover, accordin)

to the latest population measurement in 2!"", 1"$1F of the Romanian stable population has )raduated

from professional or technical school pro)rams, (hile "1$1F have )raduated from bachelor studies$ This

ma6es a total of 55$'F of 0ualified (or6in) force, more than half of the Romanian population$

Another important asset is Romanias )eo/strate)ic position$ &ince 2!!4, Romania is a member state of

the European 3nion$ *ue to this statute, it is a lot cheaper to eport from Romania to other member

states, as, accordin) to the E. re)ulation no$ ""'H2!!#, imports and eports (ithin the E3 are eempted

from several custom taes$ Moreover, eports from Romania arrive very fast (ithin Europe, both in the

estern part and in the Eastern Europe, firstly because of its central location inside Europe and, than,

because of its bi) and si)nificant ports to the Blac6 &ea and to the *anube$ These )eo/political aspects


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directly connect Romania to many countries, ecludin) its direct nei)hbors, such as 36raine, Russia and

Tur6ey, throu)h the Blac6 &ea and Austria and :ermany, throu)h *anube$

Romanias financial sector has a lot of potential, bein) is ban6/based and '! F of the ban6s are forei)n

o(ned$ verall,

credit institutions hold the lar)est share of the

financial systems assets 7rou)hly '! F8$

Ban6s (ith Austrian capital have dominated the mar6et since 2!!!, follo(ed by -rench and :ree6 ban6s$

The Romanian ban6in) sector has (eathered (ell the economic and financial crisis and capitaliCation

remains stron)$

;o public intervention measures to support the ban6in) sector (ere needed$

Both the -orei)n +olicy and the %nterior +olicy for implementin) the :overnment +lan is favorable for

ne( investments$ %n its directions of action for implementin) the :overnment +ro)ram, a priority for

RomaniaIs forei)n policy (ill be to develop the traditional relationships (ith emer)in) po(ers in Asia,

?atin America and Africa and, (ithin Asia, the Republic of Korea is the second most important country

(ith (hom Romania has developed partnerships$

-rom the interior standpoint, in the 2!"/2!" :overnment +ro)ram, the national competitiveness

strate)y focuses on ten priority sectorsG tourism and ecotourism, tetile and leather industry, (ood and

furniture, creative industries, automobiles and auto parts, %T


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ReferencesG

The Romanian Ministry of -orei)n Affairs (ebsiteG

httpGHH((($mae$roHbilateral/relationsH2!12

httpGHH((($mae$roHnodeH"!

The orld Economic -orum :lobal .ompetitiveness Report 2!"5/2!"G

httpGHHreports$(eforum$or)H)lobal/competitiveness/report/2!"5/2!"H

The ED Annual European Attractiveness &urvey 2!"5G

httpGHH((($ey$comH:?HenH%ssuesHBusiness/environmentHey/european/attractiveness/survey/2!"5

Romanian +opulation Measurement 2!""G

httpGHH((($recensamantromania$roHreCultate/2H

The E.& statistics, Avera)e Annual a)esG

httpGHHstats$oecd$or)HH%nde$asp@Juery%d1""L

European 3nion custom relief systemG

httpGHHeur/le$europa$euHle)al/contentHE;HT9TH@uri3R%&ERGl""!!2

Romanias Economic &ituation and utloo6, European .ommissionG

httpGHHec$europa$euHeconomyNfinanceHpublicationsHoccasionalNpaperH2!"5HpdfHocp22Nen$pdf

Romanias :overnment +lan 2!"/2!"G

httpGHH)ov$roHroHobiectiveHpro)ramul/de/)uvernare/2!"/2!"
http://www.mae.ro/bilateral-relations/2042http://www.mae.ro/node/1606http://reports.weforum.org/global-competitiveness-report-2015-2016/http://www.ey.com/GL/en/Issues/Business-environment/ey-european-attractiveness-survey-2015http://www.recensamantromania.ro/rezultate-2/http://stats.oecd.org//Index.aspx?QueryId=64116http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV:l11002http://ec.europa.eu/economy_finance/publications/occasional_paper/2015/pdf/ocp223_en.pdfhttp://gov.ro/ro/obiective/programul-de-guvernare-2013-2016http://gov.ro/ro/obiective/programul-de-guvernare-2013-2016http://www.mae.ro/node/1606http://reports.weforum.org/global-competitiveness-report-2015-2016/http://www.ey.com/GL/en/Issues/Business-environment/ey-european-attractiveness-survey-2015http://www.recensamantromania.ro/rezultate-2/http://stats.oecd.org//Index.aspx?QueryId=64116http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV:l11002http://ec.europa.eu/economy_finance/publications/occasional_paper/2015/pdf/ocp223_en.pdfhttp://gov.ro/ro/obiective/programul-de-guvernare-2013-2016http://www.mae.ro/bilateral-relations/2042

the attractiveness of romania’s economy

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