English Version - United Nations Development Programme Romania

Romania's sustainable development in the next century will depend considerably on the following
factors: reconsidering the investment in human capital development at all levels of the socio-economic
system; encouraging the motivation for permanent education and learning by ensuring the use and
appropriate remuneration of acquired skills; strengthening the achievements of the education reform,
including the new institutions created in 1998; ensuring that the legal and institutional framework is
compatible with that of other European countries, and that it can produce, evaluate, and certify acquired
competence on the basis of measurable performance criteria.
2.3. Economic Growth
2.3.1 Among the Central and Eastern European countries, Romania shows a series of favouring
features which, if put to good use, could support sustainable development on a long term. Among these,
the following are relevant: a) natural capital, despite aspects of significant destruction and overexploitation
which is due to the lack of conservation and protection in the past; b) human capital, seen
from a quantitative and qualitative point of view, Romania being the second largest country in Central
and South-eastern Europe in terms of population with a relatively larger proportion of young people, a
more balanced structure on age groups; cheaper labour force; a satisfactory level of training, although this
comparative advantage is beginning to disappear, due to a delay in harmonisation with European
standards of qualification; c) political stability, by comparison with other countries in the area, where
acute and latent conflicts are currently developing.
For Romania, the transition towards a market economy has proved more complex and longer than
expected. Romania had a difficult start as compared to other countries in the region, caused partly by the
critical economic situation perpetuated from the past and partly by the planning, coherence and
implementation pace of the reform. In this situation, the existing imbalance (between supply and demand,
structural, territorial, etc.) became more acute; some of the mechanisms failed; the new financial and
economic institutions did not reach the degree of maturity necessary for the normal functioning of a
market economy, for the creation of the conditions needed for a sustainable economic development.
Neither the signals, nor the aid received from abroad did rise meet the country's needs; in other cases they
have only partially been used.
In the economic field, a series of noticeable achievements can be cited:
The creation of an institutional framework for the market economy, though the normative and
regulatory acts still have to be completed to help create an integrated market system, in accordance
with the new economic conditions and in keeping with the requirements for economic integration;
Liberalisation and creation of an externally-oriented economy (liberalisation of prices, of foreign
trade, cutting subventions); allowing the laws of the market to play a more significant role in the
economy, thus limiting the amount of government administration and intervention;
Introduction of a variety of forms of ownership, privatisation and economic restructuring. In 1998,
the private sector accounted for 58.4% of the GDP; 29.8% in industrial production; 90.5% in
agricultural production; 78.2% in building operations; 49% in foreign trade; 90.6% in retail trading
and 54.2% in commercial services for the population. In 1998, 56.5% of the workforce was employed
in the private sector;
Decentralisation of the decision act increased local autonomy, elimination of monopolies,
subsidiarity. Development of social partnership relations, including the creation of institutions and
special forums which work in a tripartite regime.
2.3.2 Romania's economic situation and development are far from meeting the requirements of a
sustainable development. During the last ten years, the structural crisis and the inherited unbalances, the
delay of the economic and institutional reform, the incoherence and incongruities and gaps between the
components of the economic reform, between the nominal and real economy, have caused a prolonged
decline of the country. The hectic and destructive use of resources has also contributed to this situation.
The impact on the environment was most severe: on the one hand, wasteful use of resources has become
chronic, and on the other, the economy, continually impoverished, can hardly cover the costs for the
protection of the environment - though they are relatively low, as compared to those in the developed
countries. The evolution of the economy is marked by distortions, with a strong note of nonsustainability.
The economic development is marked by a prolonged crisis, by a growing vulnerability, both
facts that widen the gap between Romania and the developed countries.
In economy, some strong tensions and pressures were amplified and accentuated:
a) Unbalance between production and consumption, the latter being constantly higher,
between factors of production and economic efficiency and performance. The delay in the reform of the
real economy, in the restructuring of companies causing losses, in solving the financial blocking, of
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