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Socol: Our priority is to overcome the increase in risk aversion among investors on emergent markets
The investor's aversion towards risk is a reality in post-crisis emergent markets, which is why Romania needs to make it a priority from overcoming this phase, Prime Minister Victor Ponta's personal adviser on macroeconomic issues told Agerpres.
'It is our priority to overcome the increasing aversion towards risk that arose in the period after the economic crisis among the investors in the emergent markets of our region. Such comparisons with the pre-crisis and post-crisis ISD, in the context in which the high values from before the crisis appear in such areas as the real estate, retail, constructions etc. are irrelevant. Only 40 percent of the pre-crisis direct foreign investment were representing fields with high added value', said Cristian Socol.
Socol explained that the concrete projects scheduled to begin in the second half of the year are listed in the National Investments and Jobs Plan, a governmental plan marking the beginning of a new paradigm in the relationship with both the Romanian and foreign investors.
'We expect Chinese investments worth 3 billion euros in large infrastructure projects, as for instance the project of the bridge across the Danube at Braila (eastern Romania), the remaining section of the Transylvania Motorway, the Hydroelectric power plant based in Tarnita Lapustesti, terminals 3 and 4 at Cernavoda and the Pitesti - Craiova motorway. OMV Petrom also consolidates average annual investments around 1 billion euros, while Exxon Petrom OMV Romgaz will start to invest in offshore drillings. There are also scheduled investments in agriculture from both the budget and European funds worth 2 billion euros in 2013', Socol said.
As concerns investments in industry, the Prime Minister's adviser recalled that Daimler - German car manufacturer - has started an investment of 300 million, Oracle is expanding its existing capabilities by investing 100 million euros, Fribourg Development is currently investing approx. 10 million euros in a technology park project, as part of a total investment worth 300 million euros, Bosch continues its 75 million worth investment, De'Longhi its 40 million euros worth investment and Siniat Romania is going to invest 50 million euros by the end of this year in a drywall facility to be based in Turceni, also expected to create 100 new jobs.
In addition, Chinese companies ZTE and Hawei are developing their technological centres meant for Europe in Romania. Investments in industrial parks could reach 1 billion euros.
Socol also mentioned there have already been auctioned motorway sections worth 1 billion euros and three other motorways have reached the concession phase: Comarnic-Brasov, Pitesti-Craiova and the southern segment of the Bucharest Ring Road. Other auctions involve 1.2 billion euros via the SOP-T to be invested in the railway infrastructure.
As concerns the government's strategies to attract foreign investments, Socol said, among other things, that Romania wants to become an industrial and technological hub and the pillars to achieve this objective are: a stable macroeconomic and political environment, predictability in taxation, the operationalization of the Law on Public Private Partnership, reduced bureaucracy and corruption, better trained technicians, development of infrastructure, aid schemes sponsored by the state in areas defined as strategic, improved absorption of EU funds in the areas outlined in the Strategy.
The stake is to stimulate investments with high added value, to be able to create more jobs in areas where they locate. Additionally, the stake is related to greenfield investment, where it is possible, Socol explained.
‘We want Romania to become a technology and industrial hub in Eastern Europe. We defined five broad sectors we should focus our public policies on - energy, mineral resources , agriculture, industry (including IT , communications , automotive, industrial, SME etc. ) and infrastructure. We are going to focus on the consolidation of the 42 competitive clusters of Romania - most of them in sectors that are mentioned above', said Cristian Socol.
According to him, the state will stimulate the development of technology and industrial parks and also the building of business hubs.
Another strategy refers to the creation of the Romanian Investment Promotion Agency (APIR ), to be responsible, according to Socol, with everything that is related to the investment process and to function like an interface between the Government and investors - already existing or potential.
In addition, the governments aims at increasing the efficiency of its system for economic promotion abroad and the tools in this regard are the reform of foreign trade promotion offices, development of more public-private partnerships and greater integration into the system of promotion of the business organisations, Chamber of Commerce of Romania.