2021 could be the year of Romania’s economic recovery, not only following the fall in 2020 caused by the Covid-19 pandemic but also after a large number of years when the growth was largely based on consumption. The generous funds available, the plans for restructuring the economy and the administration, clear obligations and short deadlines are all incentives for new initiatives in industry, construction, agriculture, transport and services. We discussed the prospects for 2021 with the president of the Romanian Chamber of Commerce and Industry, Mihai Daraban.

Dear Mr Mihai Daraban, from the position of president of the Chamber of Commerce and Industry of Romania (CCIR), you have the most extended view on the economy, irrespective of any sector. Before discussing some of them in detail, what are the main elements influencing the economy’s progress in 2021?

Certainly, the evolution of the pandemic will weight the hardest in terms of global economic recovery. In Romania, fortunately, we did not have a total closure of the economy, the so-called lockdown, as happened in other states, and this will make recovery to the natural course faster. Another positive thing, if we can say so, is the fact that this pandemic has forced us to implement faster the processes related to digitalization, another chapter with great influence on economic evolution. We still have a lot to do, especially regarding the digitalization of public administration, but if we want to survive economically, we will have to adapt as soon as possible. Last but not least, we rely on the inspiration of the authorities to capitalize on European funds for recovery and resilience, as well as to develop policies for attracting investment in the most competitive branches of the Romanian economy.

The government has built a budget which it described as “investment-centred”. You have publicly stated that “the amounts allocated for investments are unprecedented”. What are the main directions of government investment that you think will support the industry, which is 30% of the gross domestic product?

The Chamber of Commerce and Industry of Romania has taken over the message of the business environment and has repeatedly signalled to the political decision-makers the lack of adequate infrastructure. Without infrastructure, the Romanian industry will find it increasingly difficult to get through. Investments in infrastructure are necessary not only to stop the possible migration of large companies already present in Romania to other countries but especially to become a regional hub, given the geostrategic position we have in this area.

It will also be important for the Romanian economy to support the small and middle-sized companies using programs financed by the state, which will offer them the opportunity to develop in the long term. It should be taken into account that in Romania, 50% of the value-added in the economy is brought by SMEs, compared to a European average of 58%.

Last but not least, investments in the energy sector are particularly important because there is great potential here in terms of creating new jobs and boosting economic growth, both in Romania and at the European Union level. Also, the transition to a low-carbon economy and the increase in energy efficiency are key elements of the common European strategy. This transition will mobilize considerable investment in power, energy efficiency in buildings and industrial innovation.

Even more significant sums are allocated to Romania from European funds, through the National Recovery and Resilience Plan (PNRR), as well as through the structural funds. In which economic sectors do you anticipate the most important impact of these funds?

As I have said before, I believe that investment in infrastructure should become a priority. Attracting European funds is closely linked to investments in infrastructure and both are essential for the Romanian business environment. A real focus must also be placed on digitalization, another important component for the development of a healthy business environment.

What are the industrial sectors where digital transformation is most urgently needed, for which PNRR include significant funds?

The Romanian private business environment has long done its homework on digitalization. Problems arise when Romanian entrepreneurs come into contact with state institutions, for which digitalization has remained in the project phase. I believe that administrative digitalization should become a priority in the allocation of funds, because however effective the private business environment may be, sooner or later it will collide with bureaucracy in central or local government institutions. And, as we all know, time is money.

What are the industrial sectors where you see the main challenge of the transition to a green economy?

The energy sector will remain the main polluter if, in the future, there is no integration of renewable energy sources, which means additional investment in infrastructure. It is estimated to be worth about 22 billion euros in the period 2021-2030, in this sector alone. Transport, agriculture and manufacturing have also shown a slight upward trend in emissions in recent times. Thus, the agricultural sector represents 17% of total emissions, and the transport sector 24.7% of total emissions. Companies will need a stable environment, including assistance and guidance for their transition to more sustainable forms of production and consumption. To do this, all measures need to be aligned and coherent. Contradictory legislation and incentives must be addressed and resolved through close coordination of all the shareholders.

How can CCIR support the cross-border collaboration of businesspeople in the region neighbouring Romania, with countries such as the Republic of Moldova, Bulgaria, Hungary, Serbia, Turkey?

The internationalization of Romanian business is a priority for the Romanian Chamber of Commerce and Industry, with a focus on G20 states that are not members of the European Union. In the Community space, there is already what we call “business as usual” with the other member states, so we focus on expanding into markets where our presence is not that strong. By establishing direct connections with Romania’s diplomatic missions in third countries, as well as with the embassies of these states in Romania, we manage to obtain extremely useful information for the Romanian business environment. Subsequently, this exchange of information materializes in Memoranda of Understanding, Economic Missions, Business Forums, B2B meetings. Regarding the states mentioned above, CCIR has established direct relations with all these countries, in the case of the Republic of Moldova, for example, being organized an Online Business Forum, in July 2020, in a full pandemic.

—————————————-

This interview firstly appeared in the printed edition of Energynomics Magazine, issued in March 2021.

In order to receive the printed or electronic this issue of Energynomics Magazine, we encourage you to write us at office [at] energynomics.ro to include you in our distribution list. All previous editions are available HERE.