A new ambition for Romania: make it to the top 10 economies in the EU until 2036
, 12th of September, 2016
Romania has the potential to increase its economy four times in the next 20 years and to become one of the top 10 economies of the European Union, if it focuses on three key pillars for investment and reform and together with a proper governance framework for the implementation of a long-term plan.
Since joining the European Union, Romania lacks a well-defined ambition. The current growth rate, though encouraging, is not sustainable in the long term in the absence of a strategic approach.
FIC members believe that this is the right time for citizens, civil society, business, academia and politicians to engage in a constructive dialogue about a long-term plan for Romania. Such plan must be endorsed by society at large and supported by all relevant stakeholders.
Following consultation with our members and some macroeconomic simulations, FIC is ready to contribute to this dialogue, and we believe that though very ambitious, 10th economy in the EU by 2036 is possible. Romania's economy would grow to EUR 655 billion in 2036, equivalent to an increase fourfold in size than today. The FIC community is aware that many things are to be done but we consider that three pillars are key: modern infrastructure, demography and human capital, public and private efficiency. Efforts should be focused in order to provide the basis for sustainable long term growth. These three pillars are actually the three components of the production function: capital, labour and productivity.
To achieve this goal, it is crucial for Romania to make a qualitative leap so that it can grow at an average rate of about 4% per year, over a period of 20 years. Economic growth may accelerate from 3.3% - this is currently the potential growth rate - up to a maximum of 4.5% towards the end of the period.
FIC does not have the vocation to produce a country strategy for Romania. This is the mission of the Government, with support from the Presidency, Parliament, National Bank, political parties and with an extensive consultation with academia, civil society and the business community. Our objective is to stimulate a debate regarding the national ambition and the governance framework for a long term strategy and for this reason we are launching the VA URMA platform for dialogue. FIC started the online campaign in June and launches it publicly now.
VA URMA aims primarily to communicate with the public and all relevant stakeholders, so that each acknowledge that Romania has enormous potential, once it mobilizes resources and sets a coherent long-term goal with well-defined priorities. Secondly, we will try to explain to the public the importance of sustainable growth, why it benefits everyone and how Romania can get there. Last but not least, a long term strategy that spans two decades needs a certain type of governance that is different from the usual mindset. In this context the business community can contribute with its expertise regarding long term plans. Companies, large or small, work with long term strategies and some of their lesson learned can be also useful for public institutions.
Undoubtedly, the objective is a bold one but the FIC community is confident that Romania can dare more if it mobilizes all resources and if it can build consensus and commitment towards and new ambition.