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EBRD issues latest strategy for Romania
Investment climate improves, but corruption remains top priority
Romania’s economic growth has been strong and the business environment has
improved significantly over recent years, but key challenges must be addressed
to enhance competitiveness and foreign direct investment (FDI), says the EBRD
in its latest strategy issued today on www.ebrd.com.
Furthermore, a fight against corruption remains a key challenge, especially as
the country aims to join the European Union by January 2007.
The economy grew by 8.3 per cent in 2004 and an estimated 4 per cent in 2005.
Romania has made significant progress with structural reforms mostly in
privatisations, banking reform and enterprise restructuring. In the past two
years Romania attracted large flows of FDI, thanks to an improved business
environment and the still relatively low labour costs. In the future Romania
needs to improve the enforcement of recently introduced laws and regulations,
tackle major social reforms, increase its competitiveness and improve its
infrastructure. As large-scale privatisations near completion, efforts must be
made to attract more green-field foreign investment, says the Bank.
Other major challenges the country continues to face include air, water and
soil pollution, the non-efficient use of energy in domestic and industrial
sectors, as well as the alignment of the domestic gas prices with the
international gas prices.
The EBRD, having supported Romania’s transition process for 14 years, is one
of the country’s largest single investor, having committed up to €2.8 billion
in around 178 projects. Hildegard Gacek, EBRD Director for Romania, said the
country has made great effort in moving towards a well functioning market
economy and hopes that it will carry on further addressing its key challenges.
To help the country overcome some of the challenges outlined in the strategy,
the EBRD will:
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Support Infrastructure; where the EBRD will expand its lending into new
segments such as urban transport, regional roads, municipal parking, solid
waste and district heating services. To assist in regional integration, the
Bank will also support Government’s efforts to utilise Public Private
Partnership (PPP) financial structures.
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Support power and energy efficiency; where the Bank will assist in promoting
the privatisation of energy companies, which in turn will help to further
develop the generation, efficient distribution of energy, fair and transparent
tariffs system. The Bank will encourage more sustainable energy projects in
the local communities.
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Support the private sector; where the Bank will increase its support
particularly for medium to large-sized local enterprises through strengthening
its traditional means of financing such as equity financing, commercial
co-financing, lending in local currency, as well as placing a greater emphasis
on developing local capital markets. In close co-operation with EU and the EIB
the Bank will actively continue to facilitate Romanian authorities to
effectively utilise the pre- and post accession funding. The Bank will
continue - TurnAround Management programme, to help managers of local
businesses become competitive and ready for EU accession.
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