Business
Profile
Communism – particularly
under the regimes of Gheorghe Gheorghiu-Dej and Ceausescu, in the
1960s – attempted to force Romania to become a heavy
industry economy, moving people from rural to urban areas
to work in factories. But the country was short of the necessary
energy resources for this shift. Romania
had been one of Europe’s leading oil suppliers during
the 19th century, however, production decreased
significantly, aggravated by the earthquake of 1977, with
its epicentre in the main oilfields of Ploiesti, near Bucharest.
Ceausescu, nevertheless, continued
to pour massive amounts of money, borrowed from Western
credit institutions, into industry, power projects and grandiose
building schemes, resulting in a massive trade deficit by 1980.
Attempting to pay off these debts, the
standard of living plunged, as Romania reduced imports
by one-third and augmented exports of vital materials, resulting
in drastic shortages of oil, food, energy and medicine, and setting
the scene for the 1989 revolution.
Recovery has
not come quickly. Industrial output continued to lessen
throughout the 1990s, causing widespread and long-term unemployment,
while augmented imports resulted in massive inflation, averaging
over 100% annually, between 1991 and 1998. Today, however, with
an eye to joining NATO and sooner or later the EU, market reforms
and the encouragement of foreign investment are showing a significant
effect. Inflation statistics slowed from 44.9%
to 34.5% between 2000 and 2001, and are
expected to be 25% in 2002. The average income,
less than US$100 per month in 2000, is now US$148,
with unemployment at 9% (6.5%
in Bucharest itself). Many people have returned to now privatised
agriculture, which accounts for 20% of the GDP, whereas industry,
still struggling with structural reforms in energy, accounts for
36%) and services 48.3%. The IMF estimates an overall growth rate
for Romania of 4.5%, the maximum among EU candidate countries.
Bucharest is Romania’s most important communications
and industrial centre. A modern business district is now
budding in the massive buildings that were once Ceausescu’s
Civic Centre. Some of the biggest multinational companies
in the city are in oil (Shell, Texaco and Agip), automobiles (Renault/Dacia
and Nissan) and IT (IBM and Microsoft). Other key industries
are chemical products, agricultural machinery, construction materials,
transport equipment, textiles and clothing, furniture, footwear
and wine. The ministry of IT&C services is actively deregulating
the telecommunications market and, as of April 2002, a subsidiary
of UK mobile phone giant Orange, Orange Romania became the major
shareholder in the previous Mobil Rom S.A – working in junction
with Alcatel to develop the first UMTS on air operation in Central
and Eastern Europe. The tourist industry is strongest on
the Black Sea coast and the Poiana Brasov ski resorts but
is very much in a state of uncertainty in Bucharest.
Business
Etiquette
Romanians are sociable and love to talk, so mobile phones are a
must for doing business in the city. People are very friendly and
a surprising number speak excellent English, although the older
generation may prefer French or German. However, Bucharest natives
are also extremely formal, in the old European sense, and business
visitors should respect this tradition, making appointments for
meetings well in advance. Punctuality is important and suits are
expected. On greeting, it is customary to shake hands and business
cards are often exchanged.
Business lunches may take two hours, with wine or beer the most
popular snifter. Work colleagues may socialise together in the evening
at a local bar, although this tends to take place more among those
working in multinational companies. It is relatively uncommon for
Romanians to invite foreign businesspeople to their homes. Should
this occur, gifts such as flowers, chocolates or high quality Scotch
will always be appreciated. Summertime is not good for doing business
as many companies go into hibernation. Easter and Christmas are
also difficult, as companies and shops close down for an indefinite
period. Normal business hours are 0900-1700. |
