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World Bank: Romanian needs new medium and long term economic development model
Romania needs a new model of economic development on the medium and long term, because the conditions met during the pre-crisis are no longer met, World Bank (WB) in Romania Chief Economist Cristian Pauna told a conference of the National Commission for Prognosis (CNP) on Wednesday.
'People put an increased price on holding resources in the countries that generate them. Therefore, the capital, investment and remittance flows have dramatically declined recently and there is a smaller and smaller desire to allow capital to be reallocated in the areas where yields could be higher,' Pauna said, adding that more efforts were needed to mobilize domestic resources for Romania's development.
He said that Romania's economic growth potential was much higher than the current level of growth, which shows that significant resources were blocked in limited added value activities.
The WB representative said that, based on the Europe 2020 strategy and on the strategic framework programmme of the EU 2014-2020 budget, Romania needed a strategic medium and long term framework, to identify priorities for development on the medium term and long term, reflecting the competitive advantage, but also the areas where Romania has a deficit, being far from the targets proposed in Europe 2020 strategy or in the EU-27 level.
According to Pauna, Romania must take distance from an ad hoc approach to what the public policy must do and to develop a strategic framework on a medium and long term to address structural problems, and the priorities identified need to be transferred to sectoral policies and coherent horizontals, which also need an additional resource, coming from the private or public sector.