World Competitiveness of Romania

Romania down to 55th out of 60 in terms of world competitiveness
Reported by Nine O’Clock (June 1, 2005)

Bucharest – Romania is on the 55th position among sixty states and geographic areas included in the World Yearbook of Competitiveness, standing for a decrease by one step as against 2004. According to the survey developed by IMD, released by the Romanian Institute for Economic – Social Research and Polls (IRECSON), Romania comes after several countries located in its proximity, such as Estonia – ranking the 26th, Czech Republic – 36, Hungary – 37, Slovakia – 40 or Turkey – 48.

Still, Romanian business environment’s competitiveness has managed to surpass those of Mexico, surprisingly, Poland, Argentina, Indonesia and Venezuela.

Conducted by the Centre for World Competitiveness by the Institute for Development Management (IMD) based in Laussane, Switzerland, the yearbook considers 314 competitiveness criteria covering four large classification categories, namely the economic performance, economic efficiency, governmental efficiency and infrastructure.

Compared to the previous years, the criteria considered by the Swiss institution place Romania on a lower level. Thus, Romania was ranking the 51st in 2003 and it was the 54th, out of 60, in 2004, in this classification. “It has to be specified that the downward trend in terms of ranking for Romania does not necessarily mean a downward trend in terms of performances internally, but that in spite of economic growth being registered year after year, the paces noted in other countries, by comparison, were higher and more homogenous scattered along the range of criteria considered”, the press release issued by IRECSON specifies.

From among the factors considered as favourable, the yearbook presents foreign direct investment study case in Romania, which had a gross growth of 45.6 per cent as against last year, an increase of GDP per inhabitant by 8.59 per cent, stability of exchange rate – change in the parity of the national currency to DST 2004/2004 by 0.01%. Moreover, the surge in competitiveness was also sustained by the level of internal public debt – 0.15 per cent of GDP (this is Romaniaís best position (2nd) in the rankings), GDP growth in real terms – 8.3 per cent and export of goods – a real rise of over 33 per cent. On the other hand, inflation, productivity, absence of modern technologies, subsidies, price control and financial – monetary disturbances have had a negative impact, offsetting the influence of the positive factors. In another view, the world rankings are lead by the United States of America, followed up by Hong Kong on second place, Singapore, Iceland and Canada.