Romania Economic Conditions

By | December 23, 2021

The development process that began after the Second World War was very rapid until the 1970s, but subsequently the vulnerability to negative international economic conditions, acting on a still unbalanced and unstable production system, slowed economic growth.. The basis for the socio-economic development policy was similar to those of the other socialist countries: nationalization of all productive branches; collectivization of agriculture, preceded by an agrarian reform implemented with the confiscation of properties exceeding 50 ha, the division and distribution of lots to landless peasants; organization and development of the national economy in a single whole, governed according to annual and five-year plans. After 1989, the launch of privatization policies of the means of production and opening up to foreign investments, attracted by the low cost of labor, laid the foundations for a productive reconversion that cannot be considered complete yet. Significant progress has been made to reach the goal of entry into the European Union (2007), in particular as regards the privatization of activities and the modernization of the secondary and tertiary sectors, especially in terms of employment. For Romania economics and business, please check businesscarriers.com.

● Despite the large employed population and the considerable extension of the area devoted to arable crops and tree crops (42.7%), agriculture is not very productive. More than half of the cultivated area is used for cereal cultivation, in particular for the production of corn and wheat. Barley is on the rise, while the cultivation of minor cereals, such as oats and rye, is declining, now overtaken by rice, which finds optimal conditions along the Danube. Other food crops (potatoes, tomatoes, beans, onions, cabbage, peas, etc.), industrial crops, including oil crops (sunflower, soybean, rapeseed, etc.), sugar beet, tobacco and some textile plants (flax, hemp, cotton). The tree crops mainly concern the plum, from whose fruit the national liqueur is obtained by distillation, the zuica, apple, pear, peach etc. The vine, widespread almost everywhere, provides both table grapes and for winemaking. The forests, which cover vast surfaces in Transylvania and the Eastern Carpathians, are mainly made up of beeches, conifers and oaks; timber production in 2006 was 13.8 million m 3. Breeding is important: sheep and pigs prevail, followed by cattle. Milk, butter, cheese, meat, eggs are, together with wool, the livestock products offered to the domestic and foreign market.

● The energy resources present in the subsoil, as well as the abundance of surface waters, have made it possible to implement a diversified exploitation policy. Relevant reserves of oil (whose wells are connected by oil pipelines with Giurgiu on the Danube, with Costanza on the Black Sea and with Galați-Reni), natural gas and lignite. The subsoil also provides rock salt, iron, bauxite, silver, gold, manganese, lead, copper etc. Electricity is mainly based on thermal power plants and partly on hydroelectric plants (including the one at Porte di Ferrro); a nuclear power plant is active in Cernavodă.

● The strong boost given to industrialization has absorbed the bulk of government investments. From heavy industry, favored by the development plans of the 1950-1970s, we then moved on to the creation of diversified industries (textiles, plastics, consumer goods, etc.) to respond, albeit not always sufficiently, to the demands of the domestic and foreign markets. The expansion process was rapid, having been able to count on good local bases, as well as on the technical-financial assistance of both socialist countries and those with a liberal economy. The planners had the advantage of being able to establish completely new structures in regions that had not been affected by the industrialization of the 19th century: thus equipment and plants were located according to the presence of manpower and regional needs.

● The process of privatization and product and process conversion of the industrial sector is still ongoing. Good results have manifested themselves in light industry, following foreign investments and delocalization processes that have decentralized the processing phases of companies from Western countries to Romania among others, numerous industries in north-eastern Italy (mostly from the Veneto region), essentially belonging to the clothing and footwear sectors, have transferred part of their business to cities in western Romania (Timișoara and Oradea).

● The industry is developed, in particular, in the steel, metallurgical and mechanical sectors (production of diesel engines, agricultural machinery, railway material, petroleum machinery, tools and electrical equipment, motor vehicles, boats, etc.). The chemical sector is divided into a series of recent complexes, among which petrochemical ones emerge, which provide a varied range of products (phosphate fertilizers, soda ash, nitrogen fertilizers, acids, detergents, dyes, synthetic rubber, resins and plastics etc.). The textile industry is of some importance, making use of cotton, wool and the increasing use of synthetic fibers, footwear, paper, cement, wood and cellulose. Finally, mention should be made of the food industries, already a pillar of the Romanian economy, and in particular milling, which arose in the main centers of the cereal trade (Brăila, Galați, Costanza, Timișoara).

● The communications sector, despite the progress, it still manifests imbalances. The function of land transport remains predominant. The network railway (10,781 km in 2006, of which 3978 electrified) consists of a concentric system with two main belts, with transcarpathian trunks, and with other lines that radiate from the capital in every direction. The road network includes 198,817 km of paved roads and 228 of motorways (2006). River transport has a limited function, despite the extension of waterways (1780 km), almost all along the Danube. The most active ports are located on the Black Sea (Constance and Mangalia); on the Danube, the stopovers of Brăila, Galați and Giurgiu are noteworthy. The airlines guarantee connections with the main European cities.

● Foreign trade shows a negative balance. The exchanges take place mainly with Germany and Italy. In imports, machinery, textiles and food products prevail.

● Tourism is mainly seaside, directed towards the beaches of the Black Sea, although starting from the last years of the 20th century. has begun to diversify, also attracted by places of great naturalistic (the Danube delta) and cultural interest.

Romania Economic Conditions