Taking by the best handle

Taking by the best handle

Several aspects to be considered in developing a national long-term strategy, uttered by Sorin Mindrutescu, President of AmCham (The American Chamber of Commerce in Romania)


The business community is concerned about the lack of transparency and predictability proved by the authorities when decisions are made and legal amendments are promoted. The important legislative changes happen to be an easy target for miscommunication or making little of the results of the public consultations. As well, impact studies are neglected, thus the consequences of legislative initiatives are not evaluated and considered.



Also, we are worried that, especially in the context of the electoral campaign, populist measures could be implemented, disregarding the absence of support and suitable economic resources. For instance the business community noticed some un-balanced measures included in the draft. Emergency Ordinance amending theSocial Dialog Law, such as extended protection for union leaders, fiscal facilities and special treatment for trade unions, to mention just few of them.



As to the Romanian society, my opinion is that it crosses its own crisis as well, and lacks the model people to get inspired by. Efforts should be made across society to form an alliance between leaders (business, opinion, scientific ones) and regular people, as young as possible, to give a real sense of belonging and contributing to common goals related to the future of Romania. Furthermore, Romania should focus on reducing the brain drain among youngsters, by providing adequate working conditions and community integration, in such a way to compete with the international standards.






Even if late, I think that Romania should start develop and implement a real and coherent strategy based on a few key priority areas and able to capitalize the country’s strategic advantages. Now, we have several disconnected strategies that nobody cares about, with no implementation targets and no tangible results, and we focus on very few priorities with a short-term gain in mind additionally, an overreaching need is for a coherent, correlated and clear legislation in all fields. A huge effort should be made in this respect.



The reform of the tax administration is a must in order to improve tax collection.



There is an urgent need to improve ANAF’s management capacity in order to ensure an efficient tax collection for the state budget. I believe this measure will have a positive effect on multiple aspects. As well, effective measures to fight the fiscal evasion and illicit trade should be taken. The business community sees such measures as essential to increase the revenues to the state budget and cut unfair competition practices that heavily affect honest businesses.



A set of viable anti-bribery and anti-corruption measures should be implemented. Romania’s efforts to modernize its criminal legislation against corruption needs to be further supported by more effective law-enforcement actions to deter bribery and by a more effective application of international judicial cooperation systems to curb cross-border corruption schemes. The participation of the civil society, including unions and business organizations in anti-corruption initiatives and other administrative reforms should be increased. Romanian public authorities should display full transparency and accountability in managing public money, by allowing professional, external auditing of their respective budgets and of their public money spending.



We also have to point out that a focus on the legal aspects of corruption cases is not enough. The Romanian authorities should identify the most appropriate manners to increase voluntary compliance and, if the case, to come up with solutions to recover the debts, thus bringing a significant contribution to the state budget.



An accent should be put on the outcome of the educational system. We now face a major disconnect between the needs of the labor market and the skills and abilities of fresh graduates. We should not forget that Romania still enjoys the advantage of qualified and relatively cheaper labor force. As we see it now, Romania is about to lose this advantage unless serious and coherent measures are taken in the right directions. Life-long learning should not be overlooked anymore. The current economic challenges proved once more that flexible and well trained labor force makes a difference for companies and for people.






Banks have their own clear criteria and policies when it comes to lending, which are controlled by the market.



However, what the authorities can and should do is not to kill financing projects which are vital for economy.



For instance, the law 123/2012 on Electricity and Gas, regulating power purchase agreements is unfortunately an example in this sense, as its provisions actually kill renewable energy and small cogeneration projects financing. In response to this challenge, the Energy & Environment Committee within AmCham Romania has elaborated and promoted amendments to Law 123/2012, in order to allow the bankability of such projects. We believe that the entire business community should do the same, in order to ensure a continuous attraction of new investments.



It’s not easy to turn Romania overnight into a major recipient of EU funds, but the lessons learned in absorbing EU finding until now should be incorporated in development strategies and instruments to be used in the next Budgetary Exercise 2014-2020.



There are several areas, which, in my opinion, demand swift action to ensure a smooth implementation of EU funds for the next Programming Period:





- Coherent Strategies with realistic objectives – as a pre-requisite of social and economic development, rather than mere economic growth prospect, which may be fundamentally affected by cyclical economic evolutions. One of the major questions to be answered by the set of Strategies that will cover the next exercise is: which are the priority sectors in which Romania needs to spend EU funds in order to have the most impact on GDP formation?

- The capacity to negotiate at European level – Romania needs to prepare sound arguments to support its case during negotiations at EU level

- Coherent institutional system for the up-take of funds – the implementation experienced proves that there is significant scope for improving the current institutional system for the up-take of EU structural funds

- Flexible and adequate instruments for EU Funds disbursement

- Administrative capacity building – this is one of the most important horizontal issues in Romania widely recognized by national authorities, European Institutions and International Financial Institutions and deserves due consideration for the near future

- Partnership/consensual approach – regional development – while implementing structural reforms or development projects, public support and a consensual approach in defining targets to be achieved are key factors for success. Having large participation and comprehensive public consultation at the national and regional level to define development objectives for 2020, according to the objectives already assumed by Romania in the Europe 2020 strategy, will be essential for the successful up-take of EU structural funds. Special characteristicsat the regional level and specific development need to be reflected both at the Strategy level and by the instruments designed.


Fortunately, our country still has the asset of a qualified working force for a relative low expenditure and this is one thing to be kept. It is necessary to continue the modernization of the national curriculum (incorporating experiential education methods, assessment and individualization, and integrating technology) to match other advanced countries and to reduce the current gap between the education system’s output and labor market needs. For example, a scale up of the existing best practice extracurricular models for schools is a short and medium term strategy for this particular goal (e.g. debate clubs, community initiatives clubs, social entrepreneurial and entrepreneurial initiatives, financial education, school newspapers, theatrical clubs, competitive sports etc) and can be financed via Public-Private Partnerships and/or European funding.