Key facts
Capital: Bucharest
Land area: 237,499 sq. km
Population: 22,271,839 (July 2003 est.)
Airports: 62, 160 airfields
Railroads: 11,221 km
Highways: 72,799 km
Road speed limits: 60km (37mph) city, 90km (57mph) on main roads
Political overview
Prime Minister Adrian Nastase's Social Democratic Party (SDP) is determined to lead Romania through EU accession by 2007. Parliamentary elections scheduled for November 28th 2004, and the government are favourites to retain power.
An anti-corruption pact was passed in March 2003 in an effort to curtail corruption in the country.
In June 2003 the Government conducted a major reshuffle with the number of ministries reduced from 23 to 14. This was a response to criticism of the Government's efficiency.
In October 2003, Romanian citizens voted in favour (90%) on a new constitution for their country. Changes include:
- Strengthening the president's term from four to five years
- Simplifying the procedure for dissolving the parliament and
- Limiting parliamentary immunity
Economic overview
Economic Summary
Indicator
December 2001
December 2002
December 2003
GDP growth (% on previous year)[1]
5.7
4.9
4.6 (est.)
Inflation- [year on year (%)][2]
30.3
17.8
15.8 (est.)
Account deficit (% of GDP)[3]
-5.5
-3.4
-6.4
Foreign direct investment[4]
1.3
1.1
1.3 (est)
Unemployment[5]
6.7
8.4
8.9 (est.)
Credit Rating[6]
Standard & Poors
Moody's
Fitch
B-
B3
B
B+
B1
BB-
BB
BB
BB
The official economic growth target for 2004 is 5.5%.
The Government aims to cut inflation to a single digit in 2004. This target is set to be achieved.
The increased current account deficit is blamed on high exports, limited by Romania's ability to produce value-added goods, seem to have reached a peak, while consumer-led imports are continuing to grow, boosted in part by cheap and plentiful credit.
The European Commission maintains its stance that Romania has insufficient resources to become a functioning market economy.
Foreign direct investment
Popular investors in Romania:
Cumulative FDI by country (Jan 1991-September 2002)
- Netherlands 18.36%
- Germany 9.69%
- USA 8.91%
- France 7.53%
Structure by Activity of the Foreign Capital Subscribed during 1991 – September 2002
- Heavy industry 18.36%
- Services 15%
- Transport 9%
Privatisation
In 1999, the Romanian privatisation authority APAPS introduced the Private Sector Adjustment Programme (PSAL) with the following intentions:
- Restructuring of the banking sector
- Privatisation of the state owned companies
- Improvement of the business environment
APAPS put up for sale state-owned stakes in 27 companies on June 2003. These entities were mainly in the heavy industries sector. Part of the privatisation revenues will be transferred to a special investment fund whose yields will be used for supporting the public pension fund.
The long running $1 bn privatisation of the oil company Petrom is due to finalise in March 2004. MOL (Hungary) are favourites to acquire.
In the energy sector, the Government launched the privatisation of gas distributors Distrigaz Sud SA and Distrigaz Nord SA, setting a deadline of January 2004 for bidder applications
Government
After the Revolution in 1989, Romania was organized as a republic with an elected President as head of state. There is also an elected bicameral Parliament (the Senate - 143 seats - and the Chamber of Deputies - 341 seats). The President, the senators and the deputies are elected for a four-year term.
The President nominates the Prime Minister who forms his Cabinet. The Prime Minister and its Ministers are to be confirmed by Parliament.
The current President is Emil Constantinescu (elected in November 1996), the former chancellor of the University of Bucharest. Mr. Constantinescu is the leader of the Democratic Convention, a coalition of centre-rights parties.
The present Prime Minister is Mugur Isarescu, former Governor of the National Bank of Romania. Because the Democratic Convention does not have the majority of seats in Parliament, in order to form the Government, it had to ally with the Social Democratic Union (coalition of two center-left parties). Despite the reshuffles and the ongoing bargaining between the coalition parties, the Government continues to be pro reform and privatisation.
Geography
Romania is situated in South-East Europe, north of the Balkans Peninsula, and borders Bulgaria, Serbia, Hungary, Ukraine and Moldova. It is the eleventh largest nation in Europe, with 23 million inhabitants, and has a total area of approximately 238,000 square kilometres. The capital of Romania is Bucharest, which has 2,400,000 inhabitants, and is the business and manufacturing centre of the country. Bucharest is famous for its buildings, its style, and its social and intellectual life. Between the two world wars it was known as "the little Paris" or "the Paris of the Balkans".
Romania's main port at the Black Sea is Constanta. Other important cities, from economic and cultural points of view, are: Brasov, Lasi, Timisoara, Galati, Cluj-Napoca and Craiova. The topography of the country is divided among hills, mountains and plains. In the North, West and central parts of Romania lie the Carpathian Mountains with beautiful leisure places and resorts with wild landscapes. In the winter, one can ski in the mountains. The plains cover the South and the East part of the country.
General information
Climate
Continental climate with snow in winter and hot summers. Springs and autumns are relatively rainy, with many floods taking place at these times of the year due to the network of rivers throughout the country. The average temperature in July is 30 Celsius (72 Fahrenheit) and -30 Celsius (27 Fahrenheit) in January. The average annual precipitation is 637 millimetres.
Natural resources
The country is rich in natural resources of various types: from oil and gas reserves, coal reserves, hydro-electric potential under development, through to deposits of ferrous and nonferrous ores, gold, silver, copper, lead, maganese, zinc, chromium, salt, gypsum, wood, marble, granite and basalt. The land is suited to agriculture and the growth of cereals.
Population
A total population in excess of 23 million. Around 55 % of the population live in urban areas. More than 10 % of the population live in Bucharest. The average annual growth rate is 0.44 %. Approximately 89 % of the population are ethnically Romanian, the remainder being Hungarian (7.8 %), German (1.5 %), Ukrainian (1.6 %). The remaining percentage is made up of Serbs, Croats, Gypsies, Turks and Jews.
The main religion is the Romanian Orthodox Church (70 %), other religions being the Greek-Catholic Church (6 %), the Roman-Catholic Church (6 %), Protestant Churches (12 %), Judaism and Islam.
[1] Source: EU (2003 estimate from Economist Intelligence Unit)
[2] Source: EU (2003 estimate from Economist Intelligence Unit)
[3]Source: EU (2003 estimate from Economist Intelligence Unit)
[4] Source Economist Intelligence Unit
[5]Source: EU (2003 estimate from Economist Intelligence Unit)
[6] Source: Individual credit rating agencies
