On the long regional road

Romania’s fortunate position, by the Black Sea and the Danube, could help it to support cluster creation and become a regional hub – but location alone is not enough. Costin Lianu, manager within the Ministry of the Economy, tells The Diplomat-Bucharest the advantages of clusters, the immediate action plan and the financial resources that could be leveraged to support this strategy. By Magda Purice

September 2011 - From the Print Edition

Romania could become the Eastgate Trade Hub of the CEE region if the right transportation and logistics policies are implemented, say the authorities. But specialists argue that this is easier said than done. The reward could be substantial, as Romania has the opportunity to access EUR 25 billion by 2025 to boost GDP and create 150,000 new jobs, according to data provided through European Gateways Platform.
Moreover, since it joined the European Union (EU), Romania can access EUR 19 billion of funds through to 2013, of which EUR 8.5 billion is assigned to infrastructure and regional development.

Baby steps towards a regional hub

Romania’s National Export Strategy, coordinated by Costin Lianu, manager within the Ministry of the Economy, Trade and the Business Environment (MECMA) told The Diplomat-Bucharest that Romania must capitalize on its fortunate geographical positioning and the infrastructure potential delivered both by the Black Sea region and the Danube corridor for this strategy to bear fruit.
The first half of the year brought the first steps in developing Romania as a regional hub in Europe, with the creation of the Romanian Black Sea Gateway Association, an organization designed to promote the development of Romania’s potential in the field of re-export activities, transport and logistics.
According to Lianu, becoming a hub for international trade routes between Europe and other continents will take decades, but there are measures to be taken now that would bring concrete results in a few years, namely: the implementation of import VAT deferment for all companies, no matter the value of the imports, the adoption of the Global Fiscal Representative system, custom duties deferment procedures and developing an inter-modal strategy for Romania.
The EU will rethink its strategy for structural funds between 2014 and 2020 and the financing will be offered according to competitiveness and efficiency standards, Lianu explains. As such, by 2014, Romania must develop a very clear strategy for the Danube corridor and Black Sea region, the two poles in developing a regional hub, if it wants a slice of the EU funds.

Clusters sell better

Clusters are information networks related to industries, operated by multiple specialized companies and institutions. Currently, Romania has 20 innovation clusters and by the end of the year more are expected to be formed within the aviation, marine, renewable energies, furniture and automotive industries. According to MECMA, of the 20 clusters, only 14 are involved in European projects.
Creating further clusters in Romania could put the country on the map for large investments, according to Lianu. “The plans are on a very long term. The Netherlands developed over several decades, but we could see the first results in five years,” said Lianu.
More than 2,000 regional clusters have been identified in Europe by the European Cluster Observatory. Regarding the concepts of regional coordination and regionalization, the Lisbon Strategy has as its objective on the long term to spend 3 percent of European GDP for development and research by 2020, which could lead to 3.7 million new jobs, while Europe’s yearly GDP could rise to EUR 800 billion by 2025.

Non-EU markets, a key target

The new Romanian National Strategy for Export until 2015, approved in May, underlines the focus on non-EU markets and fields such as the low carbon emission industry, nanotechnology, design, renewable energy, automotive, furniture, textiles, IT and technology and organic agriculture. Currently, almost 28.5 percent of Romanian exports target non-EU markets including Russia, Japan, India, North Africa and Arabic states.
“Accessing the energy resources and raw materials is already a priority and part of the countries’ strategy and Romania has major potential in this respect,” said Lianu. According to ministry data, 50 percent of all exports come from 100 large companies while the rest stem from SMEs. Almost 700 SMEs operating in all these sectors are included in the ministry’s financing strategy.
In 2010, exports reached EUR 37.2 billion, a record value over the last two decades, while January 2011 brought an increase in exports of almost 48 percent compared with the same month of the previous year.
By 2015, Romanian exports are estimated to grow at a y-o-y rate between 12 and 15 percent, with a cumulative value exceeding 50 percent.
Romania has a big chance to promote, and therefore extract profits from industries such as organic agriculture and design (in fields like furniture, textiles, footwear, handmade items) where awareness of local products has already been created. On this subject, Lianu says that the demand for organic food in Northern and Western European countries is high, but the export advertising in these regions is costly, especially for Romanian producers, which have difficult access due to market regulations.
Therefore, the need remains to create regional centers and marketing associations that could ultimately support the regional exports of producers. According to statistics, last year, 40 percent of the international fairs and exhibitions organized by Romania and financed by state funds targeted areas like Russia, the Middle East, Asia and the US.