With
an area of 238,400 km2, Romania
is the twelfth largest country in Europe .
Located at the intersection of Central and Southeastern Europe, bordering the Black Sea . Romania has 3,195 kilometers
of border. Republic of Moldova lies to the east, Bulgaria
lies to the south, and Serbia
and Hungary
to the west. In the southeast, 245 kilometers of sea coastline provide an
important outlet to the Mediterranean Sea and the Atlantic
Ocean . And its estimated population is almost 22 milion people.
Corruption
and red tape continue to permeate its business environment. Inflation rose in
2007-08, driven by strong consumer demand and high wage growth, rising energy
costs, a nation-wide drought, and a relaxation of fiscal discipline. As a
result of the global financial crisis, Romania 's
GDP fell more than 7% in 2009, prompting Bucharest
to seek a $26 billion emergency assistance package from the IMF, the EU, and
other international lenders. Drastic austerity measures, as part of Romania 's
IMF-led agreement, led to a 1.6% GDP contraction in 2010. The economy returned
to positive growth in 2011 due to a strong export performance, but in a
deflationary environment caused by bountiful crops and weak domestic demand. In
March 2011, Romania
and the IMF/EU/World Bank signed a 24-month precautionary stand-by agreement,
worthing $6.6 billion, to promote compliance with fiscal targets, progress on
structural reforms, and financial sector stability. The Romanian authorities
have announced that they do not intend to draw funds from the facility. Growth
slowed to less than 1% in 2012.
Composition
by structure (2011, est.):
Agriculture
7.9%
Industry
32.9%
Services
59.2%
The
evolution of the Romanian economy over the past decade indicates an emerging
economy that went through a phase of overheating, but now recovering, with a
services sector which is still below the EU average and where low value sectors,
such as agriculture, are now replaced by sectors with higher added value, which
is beneficial and contribute to the real convergence criteria for the euro.
Industry
increased its contribution to GDP in the last five years due to exports, after
a decline in 2003-2008. Large share of the industry reflects the existence of
cheap and skilled workforce that has attracted some manufacturers from
developed countries. On the other way, services were rising in 2003-2008, but
they have reduced their contribution to GDP during the financial crisis,
although they represent the highest share of the Romanian GDP, over 50%. The
share of construction in GDP has risen sharply in the years before the crisis,
but this sector has been hit by the recession, contributing to economic growth
decline in the last years, around 8.6%
Agriculture has continually reduced its share
of GDP: from 11% in 2003 to 6.6% in 2008 and 5.3% in 2012.
Romania remains one of the EU
countries with the highest share of agriculture in GDP, even though the
agricultural gross value is low compared to other EU economies.
In the
years preceding the crisis, economic growth was based mainly on consumption,
share of services sector in GDP and the growth of construction sector, while
the contribution of industry and agriculture has been declining.
In the
coming years, amid slowing economic recovery and fiscal consolidation in Europe , we should see a return to the convergence mainly
to support an increase in the relative importance of the service sector, a
sector whose share is about 70% in European Union.
Unemployment rate
In Romania , the
unemployment rate was at the level of 6.70% at the end of 2012. In all developed
countries the number of unemployed young people aged between 15 and 24 years
old is growing. Most of the unemployed are young people aged between 15 and 24
years. In this age group, the unemployment rate exceeds 22%. The causes of
youth unemployment are often the same as unemployment causes in general. But
there are specific elements that influence the share of young unemployed in the
total number of people without a job, namely:
1. lack
of qualification. The fact that the
training structure does not comply with the employment structure makes the
educational system unable to offer the new graduates a training that will allow
them to rapidly adapt to the new requirements. Youth people without skills is very
hard to be employed, because in these
difficult economic times companies want to invest as less as possible in the
youth’s development. At this time, many young people are unemployed because of
the crisis. Companies prefer, due to the lack of money, to hire people with
experience, even when they need to increase their workforce;
2. the slow development of the private sector;
3. the consolidation of the quasi-monopoly of some companies
which has as consequence the
non-flexibility of the work-market;
4. the deepening of the tendencies of divisioning and specialization,
of forming some groups and non-competing
socio-professional categories as a result of the multiplication of the specializations and of the differences
between the employers from the point of view of practice, skills, adapting
capacity.
However,
we can say that that there are also a few causes of unemployment that are not determined
by the above mentioned characteristics and which can be found in Romania’s economy.
These causes are:
·
the natural selection;
·
psychology;
· the changes in the economic
structure and the employees’ difficulties to adapt themselves to these changes;
·
the people’s will and
behaviour;
·
the technical progress;
· the budgetary expenses for
“social protection” or “transfer payments” (unemployment benefit, poverty benefit,
etc.);
·
the laziness and the
individual’s failures;
·
the political system.
Another
major cause that generates and keeps the high rates of unemployment in our
country is the volume of the heavy imports of products, which can be official
and “unofficial”. The “unofficial” imports of products, the fact that national
persons are bringing to the country products, led to the production decrease in
our country after 1989 because the respective products were sold at lower
prices than the similar products in Romania. This situation lasted a long
period of time and made our country addicted to from the point of view of the
supply with production factors. The heavy imports deteriorated the commercial
balance and, therefore, the payment balance which created places of employment
for the national economy and not for the foreign economies, which generated the
increase of the unemployment.
Gabriel Stoica
[artigo de opinião produzido no âmbito da unidade curricular “Economia Portuguesa e Europeia” do 3º ano do curso de Economia (1º ciclo) da EEG/UMinho]
[artigo de opinião produzido no âmbito da unidade curricular “Economia Portuguesa e Europeia” do 3º ano do curso de Economia (1º ciclo) da EEG/UMinho]
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