Reviving Romania's Growth and Convergence Challenges and Opportunities : A Country Economic Memorandum

This Country Economic Memorandum (CEM) sets a framework for a dialogue on inclusive economic growth and income convergence in Romania. Generous Foreign Direct Investment (FDI) and other financial inflows lifted consumer demand, built up key industr...

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Bibliographic Details
Main Author:	World Bank
Format:	Country Economic Memorandum
Language:	English en_US
Published:	Washington, DC 2013
Subjects:	ACCOUNTABILITY AGGREGATE DEMAND AGRICULTURAL PRODUCTION AGRICULTURE ARABLE LAND ARREARS ASSET MANAGEMENT AUDITING AUDITS AUTOMOBILE AUTONOMY BANK CAPITALIZATION BANK LOANS BANKING SECTOR BANKING SECTORS BANKING SYSTEM BANKRUPTCY BANKS BENCHMARKING BENCHMARKS BOARDS OF DIRECTORS BONDS BORROWING COSTS BORROWING REQUIREMENT BUDGETING BUS BUS SERVICES CAPITAL FLOWS CAPITAL INFLOWS CAR CIVIL SERVICE COMPARATIVE ADVANTAGES COMPETITIVENESS CONSOLIDATION CONSUMERS CORPORATE GOVERNANCE COST OF CAPITAL COST OF TRANSPORT CPI CREDIT GROWTH CURRENCY DEBT DEBT MANAGEMENT DEFICITS DEREGULATION DEVELOPMENT STRATEGY DISPOSABLE INCOME DRAINAGE ECONOMIC ACTIVITY ECONOMIC BOOM ECONOMIC COOPERATION ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIC SIZE ECONOMIC STRUCTURE ENTREPRENEURSHIP EQUIPMENT EXCHANGE RATE EXPENDITURE EXPORT GROWTH EXPORTER EXPORTS EXTERNAL DEBT EXTERNALITIES FINANCIAL CRISIS FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTOR INDICATORS FINANCING SOURCES FISCAL BURDEN FISCAL DEFICIT FISCAL DEFICITS FISCAL DISCIPLINE FISCAL POLICIES FISCAL POLICY FISHING FOREIGN DIRECT INVESTMENT FREIGHT FREIGHT TRANSPORT FUEL GAS PRICES GAS SECTOR GDP GDP PER CAPITA GOVERNMENT BORROWING GOVERNMENT INVOLVEMENT GROSS DOMESTIC PRODUCT GROSS MARGIN GROSS VALUE GROWTH POTENTIAL GROWTH RATE HOLDING HOUSING HUMAN CAPITAL HUMAN RESOURCE HUMAN RESOURCE MANAGEMENT HUMAN RESOURCES IMPLEMENTATION STRATEGIES IMPLICIT TAX INFLATION INFORMATION SYSTEMS INFORMATION TECHNOLOGY INFRASTRUCTURE INVESTMENT INSTITUTIONAL INVESTORS INTEREST RATE INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL STANDARDS INVESTING INVESTMENT SPENDING LABOR FORCE LABOR MARKET LABOR MARKETS LABOR PRODUCTIVITY LAND TITLING LAWS LEGISLATION LEVEL PLAYING FIELD LIVING STANDARDS LOCAL CURRENCY LOCAL GOVERNMENTS MACROECONOMIC CONDITIONS MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MARKET ACCESS MARKET INTEGRATION MARKET LIBERALIZATION MARKET PRICES MARKET REGULATORS MATURITIES MIGRATION MINISTRIES OF FINANCE MINISTRY OF TRANSPORT MOBILITY MONETARY FUND MONETARY POLICIES MOTORWAYS NATIONAL BANK NONPERFORMING LOANS NPL OIL OPPORTUNITY COST PARTIAL PRIVATIZATION PASSENGER SERVICE PASSENGERS PAYMENT SYSTEM PENALTIES PENSION POLICY DECISIONS POLICY MAKERS POLICY RESPONSE PRICE STABILITY PRIVATE CAPITAL PRIVATE CONSUMPTION PRIVATE INVESTMENTS PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES PROFITABILITY PRUDENTIAL REGULATIONS PUBLIC DEBT PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC FINANCES PUBLIC GOODS PUBLIC INVESTMENT PUBLIC INVESTMENTS PUBLIC OFFERING PUBLIC OFFERINGS PUBLIC POLICY PUBLIC ROADS PUBLIC SPENDING PURCHASING POWER QUALITY STANDARDS RAIL RAIL INFRASTRUCTURE RAIL NETWORK RAIL SERVICE RAIL SERVICES RAIL TRANSPORT RAILROADS RAILWAY RAILWAYS REAL EXCHANGE RATE REAL GDP REGULATORY FRAMEWORK RESIDENTIAL CONSUMERS RESOURCE ALLOCATION RESOURCE MANAGEMENT RETURN RISK AVERSION ROAD ROUTES RURAL ROADS SAFETY SAFETY NET SAFETY NETS SAVINGS SEWAGE SHAREHOLDER SHAREHOLDERS SHORT MATURITIES SHORT-TERM CAPITAL SOFT BUDGET CONSTRAINTS STATE ENTERPRISES STOCK EXCHANGE STOCK MARKET STRATEGIC INVESTORS STRUCTURAL CHANGE SUSTAINABLE GROWTH TAX TAX ADMINISTRATION TAX COLLECTION TAX RATES TAX REVENUES TAXATION TOLL TOTAL DEBT TRADE DEFICIT TRADING TRAINS TRANSPARENCY TRANSPORT TRANSPORT INFRASTRUCTURE TRANSPORT NETWORK TRANSPORT POLICY TRANSPORT SECTOR TREASURY TREATY UNEMPLOYMENT UNEMPLOYMENT RATE UNEMPLOYMENT RATES URBANIZATION VALUE ADDED WAGES
Online Access:	http://documents.worldbank.org/curated/en/2013/06/18028709/reviving-romanias-growth-convergence-challenges-opportunities-country-economic-memorandum http://hdl.handle.net/10986/16036

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Summary:	This Country Economic Memorandum (CEM) sets a framework for a dialogue on inclusive economic growth and income convergence in Romania. Generous Foreign Direct Investment (FDI) and other financial inflows lifted consumer demand, built up key industries, modernized wholesale trade and unleashed the movement of labor from low-productivity activities like agriculture towards high-productivity activities like manufacturing. Public and private investments in education lifted tertiary education enrollment from 12 to 23 percent. Preliminary calculations suggest that this growth was shared even after the crisis, as the income of the bottom 40 percent of the population grew by 5.5 percent on average during the 2000-2011 periods, a pace slightly above the 4.8 percent growth in the income of all households and the 4.1 percent average growth. Achievements notwithstanding, there is little room for complacency. The report discusses the immediate constraints to economic growth in areas where the short-term pay-off is high rather than covering all potential sources of growth for Romania. Although these are only the initial steps to reignite growth, the challenges of addressing each of these constraints should not be underestimated. Tackling them effectively demands a strong strategic vision, meticulous planning, and policy coordination. A significant amount of strategic communication of the benefits of the outlined reforms for the country will also be required since the roadblock to shaping and implementing these policies is likely to be vested interests, institutional inertia and lack of political consensus. In short, the crisis revealed the weakness of Romania's past growth model: it was based to a large extent on consumption and short-term capital inflows rather than on sustained productivity increases in tradable sectors and it concealed significant inefficiencies in the public sector.

Reviving Romania's Growth and Convergence Challenges and Opportunities : A Country Economic Memorandum

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