British show bulldog spirit despite short termism

Lack of medium- to long-term planning by local authorities remains a major setback for British investors in Romania. But there is no evidence, yet, that Romania has become less attractive to UK investors than it was a few years ago, says Raymond Breden, president-elect of the British Romanian Chamber of Commerce.

Simona Bazavan

How would you say Romania has weathered the economic crisis over the past two years?

In general terms Romania has done neither better nor worse than other economies in the same position. A significant indicator is the IMF follow-up Stand-By Arrangement, which in my opinion gave a cautious welcome to Romania’s handling of the crisis. However, as with everything, it is a lot easier to talk about a problem than it is to solve it, so only time will tell whether the economy is actually on the right track.

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Do the reasons that brought British investors to Romania a few years ago still apply?

There is no evidence that Romania is less attractive to British investors now than a few years ago.  However, the failure of Romania to take up available EU funds and use them for the development of major infrastructure and similar schemes could well lead to British investors in the future looking to other countries who are prepared to fully use available funds.

Do you believe that the new Labor Code will help the local economy become more competitive?

Yes, it should be helpful and indeed has received a general welcome from the business community. The one aspect of the final version that is worth mentioning is the greater flexibility of short-term contracts.

From your contact with UK companies, what are currently the greatest setbacks when doing business in Romania?

Lack of medium- to long-term planning has been a major problem for British companies looking to partner with and invest in Romanian companies. It is not surprising when governments think short term, but it is more worrying when potential business partners think the same. To British companies, a five-year plan with profits coming on line at the end is normal. But too many potential Romanian partners want cash and profits tomorrow and do not have a long-term vision.

What sectors of the Romanian economy do you see as being the most profitable in the years to come?

Energy, specialist services in engineering and the environment, light and heavy manufacturing and IT development are likely to be profitable.

British investors are more likely to invest in well thought out green-field development than to buy into existing industries.

The agricultural sector also has great potential, and the infrastructure in Constanta needs to be improved so that it becomes one of the great ports of Europe.

What would you recommend to a British company contemplating investing in Romania?

I would recommend that British companies remember the basic principles of having a sound business plan before investing in Romania, but once they have such a plan then there are good opportunities.

Clearly the characteristics of the Romanian market that attract British investors are the size of the market, the multi-skilled labor force and still relatively competitive costs.

What can you tell us about the COBCOE Corporate Social Responsibility Award 2011 won by the BRCC?

Part of the BRCC’s mission is to promote bilateral social and cultural relations and the chamber positively encourages members to support the work of Anglo-Romanian charities and develop and implement responsible business practice policies. Members of the BRCC board and staff are actively involved with the work of not-for-profit organizations, so we are delighted to have received this important award.

The award recognizes the various initiatives of the chamber that aim to raise awareness of business, social and cultural issues and achievements, from providing a platform for its charity members to receive expert advice on legal, fiscal and other issues, to actively participating in and supporting events and projects that encourage the chamber’s business members to support the voluntary sector.

UK Romania TRADE FIGURES FOR 2010

UK exports to Romania GBP 624 million, accounting for 2.3 percent of total Romanian imports and 3.7 percent of Romanian imports from the EU. UK exports to Romania are up 13 percent on 2009.

UK imports from Romania GBP 933 million, accounting for 3.7 percent of total Romanian exports and 5 percent of Romanian exports to the EU. UK imports are up to 50 percent on 2009.

UK among Romania’s trade partners

UK is in 5th position among

Romania’s export partners in the

EU, a list headed by Germany, Italy and France. It ranks 9th in the list of Romania’s import partners in the EU in a league table led by Germany, Italy and Hungary.

Romania’s exports to the UK

Romanian exports to UK: textiles/clothing, machinery & electrical equipment, power generation equipment, furniture, metal products.