ROMANIA

COUNTRY OVERVIEW

LOCATION AND SIZE.

Located in southeastern Europe on the Black Sea, Romania covers an area of 238,500 square kilometers (92,085 square miles), making it slightly smaller than Oregon. It borders Hungary, Yugoslavia, Bulgaria, Moldova, and Ukraine, and has a coastline of 225 kilometers (140 miles). The capital, Bucharest, is towards the south of the country.

POPULATION.

The population of Romania was estimated at 22,334,312 in July 2000, having fallen 2.6 percent since its peak in 1988. The population is expected to continue falling for the next decade thanks to net emigration and low birth rates, a fact that worries the government. But improved health care should slow the rate of decline as infant mortality falls from its current 19.8 deaths per 1,000 live births.

Meanwhile, the proportion of retired people is rising. By 2005, 14.6 percent of the Romanian population will be aged 65 or over, compared to 11.8 percent in 1995. For this reason, Romania has recently reformed its state pension system because rising unemployment has combined with the aging population to make the former payas-you-go system unaffordable. The plan is to encourage complementary private pensions, allowing younger citizens to save for their own old age while maintaining payments to those that are already pensioners .

Romania's population is remarkably homogenous. Almost 90 percent are ethnic Romanians, claiming descent from Latin-speaking Romans who settled among the local Dacians in 100-200 A.D. As a result, Roman-ian is a Romance language related to French and Italian, in contrast to the Slav languages spoken in surrounding countries. Around 70 percent of Romania's population is Romanian Orthodox.

The biggest minority group is Hungarian, which is particularly strong in the western region of Transylvania. Hungarian-Romanians have automatic rights to parliamentary representation and Hungarian-language education. There are also sizeable Roma, Turkish, and Croat populations, as well as Ukrainians, Greeks, Russians, Armenians, and Serbs. Romania used to have a Jewish population of around 300,000. Most of them survived World War II but emigrated to Israel, leaving only a few thousand now. During the 1990s, two-thirds of Romania's German population also emigrated to Germany.

INDUSTRY

MINING/NATURAL RESOURCES.

Romania is well-endowed with natural resources. It has large reserves of petroleum, timber, natural gas, coal, iron ore, and salt, as well as facilities for hydropower. But lack of investment is causing the output of everything from coal to oil to fall.

The coal sector has been among the hardest-hit by the transition to a market economy. Coal production fell by 57 percent between 1989 and 1998, to 28.6 million short tons, as the economy shrank and use of other, less-polluting fuels increased. Over the past 5 years, the World Bank and the International Monetary Fund have pushed Romania to close inefficient mines, in order to stop the sector from gobbling up state subsidies. The social impact of this has been huge, with tens of thousand of miners losing their jobs, pushing unemployment in some regions to 70 percent. The current leftist government has promised that the pit closures will soon stop. It is hoping to boost electricity exports, which will mean more demand for coal.

Romania has proven oil reserves of 1.4 billion barrels, the largest in Eastern Europe. The country used to be a major oil exporter, but lack of investment has caused production to steadily fall over the last 2 decades. Romania now relies on imports to cover half its domestic needs. The government has started to attract foreign investment for oil exploration and production, both on land and in the Black Sea. There are also long-standing plans to privatize the state oil company SNP Petrom, although the attitude of the government remains unclear. Gas production has also fallen, with little money for exploration. Proven reserves of natural gas stood at 13.2 trillion cubic feet in 1998, but Romania still imports gas from Russia.

MANUFACTURING.

Romania's manufacturing sector is dominated by machine-building, metals, chemicals, and textiles, all of which have had to turn from supplying the domestic market to finding export markets. Investment has been a key issue, as they try to update the outdated equipment many of them were left with when communism fell. Many of the previously state-owned firms have also been sold to private owners in an attempt to bring in money and improve management. Some of the biggest firms, seen by the government as strategic, have still to be sold, however.

The textile and footwear industries have been among the most successful in the past decade, as Western European and U.S. clothes-makers subcontract work to Romanian firms. As a result, textile exports accounted for 24.2 percent of 2000 exports, while footwear accounted for 7.6 percent. But such work depends on low wages, which is why Romania is anxious to progress from sub-contracting to selling its own clothing designs. At present, the gross monthly wage in the textiles sector is just US$130 a month.

The metals sector has enjoyed a boom in the past 2 years, thanks to high world prices. The aluminum plant Alro is now Romania's biggest exporter and tripled its net profits in 2000. The country's biggest steelworks, Sidex, has also benefitted from the high prices, despite its outdated equipment and competition from stronger steel firms in Slovakia. Sidex is said to employ, directly and indirectly, over a million Romanian workers, both in and outside its home town of Galati. Both Alro and Sidex are still mainly state-owned and are expected to be sold to private owners by 2003.

During the 1990s, many of the largest firms in the machine-building sector were split up into smaller units in an attempt to boost efficiency and speed up their privatization. The disruption has been immense, and Romanian firms, long protected in an isolated market, have also found it hard to raise their production to the standard needed for export. Nevertheless, there has been some recovery in the sector. Exports rose nearly 50 percent during 2000, and it accounted for 14 percent of the total.

Romanian firms in both the metals and machine-building sectors lay great hopes on becoming subcon-tractors for major European manufacturers. That is why the 1999 acquisition of the Dacia car plant by France's Renault is seen as so important to Romania's future. Renault plans to use Dacia to develop, for emerging markets , cars selling for around US$5,000 apiece. To do that, it will have to build up a network of local, cheap suppliers such as the Sidex steelmaker. Renault's entry into Romania has also brought in other foreign investors, among them its international suppliers, such as the United States's Johnson Controls.

Romania's chemicals sector consists of both petro-chemicals, based on its oil industry, and on pharmaceuticals. The pharmaceutical firms, such as Terapia, have found a niche for themselves in producing cheap versions of international drugs to sell both to Romanian hospitals and to EU countries. But they face problems as Romania moves towards EU membership because its patent laws will have to be made stricter, which will limit the drugs they can produce. Like the oil sector, the petro-chemicals sector has revived in the past year due to rising world prices.

SERVICES

TOURISM.

Tourism has always been an important part of Romania's economy. A combination of beautiful mountain regions, a warm sea coast, and Dracula's castles lure tourists. But the development of the industry has been hampered by a lack of money for infrastructure and tourist facilities. Service is still patchy in several parts of the country.

These factors, combined with the wars in neighboring Yugoslavia, mean that tourism numbers more than have halved since communism ended. In 1990, some 6.5 million foreigners visited the country; by 1998, that figure was down to 2.9 million. The collapse of the state tourism monopolies are partly to blame, combined with Romania's rising reputation for corruption. The number of domestic tourists has also slumped, with many Romanians no longer able to afford holidays.

Nevertheless, there are signs of a revival since the mid-1990s. Some limited foreign investment has come into the sector, particularly into Bucharest. Privatization of tourism facilities has speeded up. And the government has made development of the industry one of its prime medium-term objectives.

FINANCIAL SERVICES.

The development of Romania's banking sector is seen as crucial to economic growth, because it will determine whether companies can get the loans and investment they need to become competitive. In 1990, the market was dominated by a handful of state banks. In 2000, there were 54 banks registered in the country, many of which were subsidiaries of foreign banks.

But Romanian financial services remain small in international terms. And the locally-owned banks in particular are also vulnerable to collapse because of a lack of experience in selecting borrowers, the effects of the 2 recessions, and their limited access to international capital. Several banks and funds collapsed during 2000, leaving thousands of deposit-holders demanding compensation from the government. Altogether, the government has had to spend US$3 billion in the past decade propping up the country's banks.

To overcome these problems, Romania is in the process of privatizing its remaining state banks. The aim is to find foreign strategic investors who can provide both capital and expertise and stop the banks from collapsing. The Romanian Bank for Development was sold to France's Societe Generale, while several financial investors, including America's GE Capital, have bought into Banc Post. In April 2001, Banka Agricola, the agricultural bank, was sold to the Romanian-American Enterprise Fund and Austria's Raiffeisen bank.

TRADE.

Much of the growth of Romania's service sector stems from the growth of trade, both international and domestic. Trade employed 9.5 percent of Romania's workforce by 1998, compared with 5 percent in 1990. And it accounts for an estimated 90 percent of small businesses in the country, many of which operate in the grey economy . Many of these firms are one-person companies with a van to ship goods. Others are small shops or even street-traders.

The retail trade in particular was underdeveloped in the communist era when all shops were state-owned. Now a multitude of small shops have sprung up and are increasingly having to compete with the new supermarkets. Some of the investment has come from foreign countries, with retailers such as Austria's Billa, Germany's Metro, and France's Carrefour building supermarkets and hypermarkets in the major towns. The investors seem unconcerned by the low purchasing power of Romanians. They see fast growth for the sector because it is so underdeveloped, and are keen to establish their position.

DEPENDENCIES

Romania has no territories or colonies.

BIBLIOGRAPHY

Business Central Europe. <http://www.bcemag.com> . Accessed April 2001.

Economist Intelligence Unit. <http://www.eiu.com> (subscription necessary to access all reports). Accessed April 2001.

Economist Intelligence Unit. Country Profile: Romania. London: Economist Intelligence Unit, 2001.

"Enlargement." Europa. European Commission. <http://www.europa.eu.int/comm/enlargement/romania/index.htm> . Accessed April 2001.

National Bank of Romania. <http://www.bnro.ro/def_en.htm> . Accessed April 2001.

"Report on Romanian Energy." Energy Information Administration. <http://www.eia.doe.gov/emeu/cabs/romania2.html> . Accessed April 2001.

"Romania." World Bank. <http://www.worldbank.org/ro> . Accessed April 2001.

Romania In Your Pocket. <http://www.inyourpocket.com/Romania/index.shtml> . Accessed April 2001.

Romanian National Commission for Statistics. <http://www.cns.ro/indexe.htm> . Accessed April 2001.

"A Survey of Romania, November 2000." Business Central Europe. <http://www.bcemag.com/servlets/bce.application.issue?cid=1284&parent_cid=1268> . Accessed April 2001.

U.S. Central Intelligence Agency. World Factbook 2000: Romania. <http://www.cia.gov/cia/publications/factbook/geos/ro.html> . Accessed April 2001.

Vienna Institute of Comparative Economic Studies (WIIW). <http://www.wiiw.ac.at> . (Subscription necessary to access all reports.) Accessed April 2001.

—Ana Nicholls

CAPITAL:

Bucharest.

MONETARY UNIT:

Romania leu (L). One leu equals 100 bani, though bani are seldom used, thanks to devaluation. There are notes of 1,000, 2,000, 5,000, 10,000, 50,000, 100,000, and 500,000 lei (plural of leu), and coins of 1, 5, 10, 20, 50, 100, 500, and 1,000 lei.

CHIEF EXPORTS:

Textiles and footwear, metals and metal products, machinery and equipment, minerals, fuels.

CHIEF IMPORTS:

Machinery and equipment, minerals and fuels, chemicals, textiles, footwear.

GROSS DOMESTIC PRODUCT:

US$36.7 billion (2000). [ CIA World Factbook 2000 reports GDP at purchasing power parity to be US$87.4 billion (1999 est.).]

BALANCE OF TRADE:

Exports: US$10.4 billion (2000). Imports: US$12.0 billion (2000). [ CIA World Factbook 2000 reports exports to be US$8.4 billion (f.o.b., 1999 est.) and imports to be US$9.6 billion (f.o.b., 1999 est.).]

User Contributions:

Leonard Julien
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Mar 18, 2011 @ 3:15 pm
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I am interested in getting information re the oil and gas production opportunities for medium sized North America western oil and gas companies.

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Leonard
olivia
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Dec 14, 2011 @ 10:10 am
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siriluck
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May 30, 2012 @ 11:23 pm
Dear Whom It May Concern,

I'm looking for the information of manufactures that produce the milk powder and dairy products in Romania. Could you please give me an advice? Thank you very much.

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courtney
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Jun 2, 2012 @ 6:18 pm
i really love the information i got and i would really love to visit romania someday!
Emanuel-David Drumea
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Mar 21, 2013 @ 12:12 pm
Only gold museum in Europe opens in Central Romania, showcases rare raw pieces
After a five-year revamping process, the gold museum in Central Romania, in the city of Brad, recently reopened its doors, to showcase what the curators call ‘the most valuable 4.5 kilos of gold’ in the world. With some of the exhibits in the museum worth and insured for as much as EUR 500,000 a piece, the gold at the Brad museum is showcased just as it was unearthed, which makes it even more valuable. The 1,300 pieces, of various shapes, are unique in the world, and the museum itself is one of a kind in Europe, with only two other similar museums functional elsewhere in the world. Some of them resemble the shape of a feather, or a crystal or even a lizard. The lizard shaped piece, although only seven tenths of a gram of gold, was valued at some EUR 3 million. The museum building itself is owned by the state through Minvest Deva.
The Romanian state invested around EUR 660,000 in revamping the museum, bringing to light again the gold unearthed by over 40,000 miners who worked for years at the Barza gold mine. The mine, which was closed down in 2006 as it was deemed unprofitable, is estimated to have extracted around one percent of the world’s gold.
The museum revamping was part of the program to close down unprofitable mines in Romania, which started at the request of the European Commission. The program in Romania had its infancy in 2002, after an Environment Assessment Program, under a USD 72 million budget. The mine closing project included 20 mines in seven regions. In 2010, the EU decided to ask member countries to close down unprofitable mines by 2018.
Romania stopped extracting gold in 2005, but meanwhile several companies received exploitation licenses in areas which were thought to be depleted but which turned out to still have substantial gold reserves. Carpathian Gold found gold worth some USD 12 billion at the same Barza mine, previously deemed unprofitable.
Romania’s president Traian Basescu has been recently campaigning for Romanian mines to be reopened, so that the country benefits from investments in the mining sector and Romanians get more jobs. His statements were interpreted as pertaining to the Canadian company Gold Corporation, which is intensively lobbying to get the needed approval to start digging for gold at Rosia Montana, in Central Romania.
Emanuel-David Drumea
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Mar 21, 2013 @ 1:13 pm
Largest administrative building-world record set by The Palace of the Romanian Parliament

BUCHAREST, Romania--The Palace of the Romanian Parliament has a floor area of 360,000 square meter -setting the world record for the largest administrative building (for civilian use*).

The Palace of the Romanian Parliament is also the world'sHeaviest Building: is made from 1.5billion lb (700,000 metric tones) of steel and bronze, plus 35.3 million ft³ (1 million m³) of marble, 7.7 million lb (3,500 metric tones) of crystal glass, and 31.7 million ft³ (900,000 m³) of wood.

The Palace of the Parliament is also the world's Most Expensive Administrative building in the world: updated total costs (2006) are estimated at 4 billions USD.
Emanuel-David Drumea
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Mar 21, 2013 @ 1:13 pm
The largest building in Europe - The Palace of Parliament in Bucharest, Romania
The Palace of Parliament (Romanian: Palatul Parlamentului), better known as "Casa Poporului" (The House of The People) is the largest building in Europe and the building that holds three records homologated by the Guinness Book of World Records: for the largest civilian administrative building in the world, the heaviest building in the world and the most expensive administrative building in the world.
The first largest building in the world is the Pentagon.
Emanuel-David Drumea
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Mar 21, 2013 @ 1:13 pm
BRAD(My Hometown)Museum

Over 1,300 gold exhibits and more than 1,000 mineral samples are shown at the Gold Museum, in Brad, Hunedoara county (northwest of Bucharest), which re-opens to visitors, after five years, while its building was rehabilitated, and the museum's collection attentively examined and assessed, the insurance value of some of the pieces being evaluated to be worth 500,000 euros, at the least.

The museum was first mentioned in the documents of the year 1912.

Experts say that data read that about one percent of the gold extracted worldwide came from the Barza pit that was shutdown in 2006
Emanuel-David Drumea
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Mar 21, 2013 @ 1:13 pm
Romania is a beautiful little country in Eastern Europe in the Balkan region .
Meal time in Romania is a very special time. Family and friends come togheter and may linger after a meal is over in deep conversation.
The food in Romania is diverse. Food choices and cooking styles are influenced by Balkan traditions as well as German, Hungarian, Turkish, Russian and those of the Near East wich includes Israel, Palestine, Jordon, Syria, Lebanon and Iraq.
At Easter, lamb is served: the main dishes are roast lamb and --drob de miel—A Romanian lamb haggis made of minced (heart, liver, lungs) wrapped and roasted in a caul.
Some of the most known traditional dishes in the Romania coisine are:
Sarmale – stuffed cabbage rolls
Mămăligă – approximately polenta
And Mititei – approximately grilled small sausages
Desserts are usually crepes filled with fruits or cherry strudel. Other desserts in Romania include baclava, wich is sweet layered pastry,
Sponge cake known as pandișpan
Rice pudding or orez cu lapte
And gingerbread or turtă dulce
Romania is known to the world for the traditional folk dances and special handicrafts, such as Easter egg painting.
But Romania has national dishes that will make your mouth water and will readily satisfy your hunger.
Before, on December 20 (Ignat”s day), a pig is traditionally slaughtered by every rural family. A variety of foods for Christmas prepared from the slaughtered pig consist of the following :
Cărnați- spicy sausages, tocătură-pan fried pork served with mămăligă and gralic sauce (”so that the pork can swim”)
The Christmas meal is sweetenend with the traditional ”cozonac” (sweet bread with nuts) or Rahat (Turkishe delight) for dessert.

God bless Romania!
Mariah Smith
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Jan 31, 2014 @ 8:20 pm
I thought this website was really helpful and I like it and hope that other people will use it as much as I will be doing lately

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