English Version - United Nations Development Programme Romania

5.9%; machinery and equipment industry 10.7%; automotive industry: 7.2%; construction materials,
glass and ceramics industries: 4.4%; metal products and metal constructions industry: 3.8%; electric
and optical equipment industry: 3.9%.
The structure of the workforce according to age groups (1996) is better balanced in industry than in
other sectors of the economy and creates the necessary conditions for the sustainable development of
industry. 90% of workers employed in industry are under 50 years of age, and 42,2% of workers are
under 35 years of age.
The specific problems that should be taken into account in designing the strategy for a sustainable
development of the industry refer to the creation and application of a professional and managerial
training system, in line with the global technical and technological progress. This strategy should also
rehabilitate the activity of scientific research, stop the emigration of highly qualified specialists, and
offer new opportunities to the unemployed, especially in the development and specialisation of
services.
d) Competitiveness of Romania's industry
The increasing decline of production and the low occupancy rate of the production potential
demonstrate the decline in competitiveness in most energy intensive sectors that also require costly
materials and capitals.
As a result of foreign capital investment, privatisation, and certain technological improvements,
the following industries have had a relatively satisfactory growth: the communications equipment
industry, the automotive industry, as well as industries manufacturing electric equipment, textile,
clothing, construction materials, furniture, tyres, antibiotics, and chloride and sodium products.
The shrinkage of the industrial production has been determined mainly by the slow adaptation to
the new demands and structure of the markets after 1989, managerial incompetence at the
microeconomic level (technical, financial, commercial, human resources) especially in state-owned
enterprises.
Other factors were: the increasing loss of capital and the dull economic environment, the slow
pace of privatisation and restructuring, the incoherent and unstable legal framework which
discouraged foreign investment, the insufficient support offered by the banking system to the reform
process and also, the inability to use the opportunities created by the Association Agreement to the
E.U. (technical and financial assistance, the asymmetric tariffs regime, safeguarding clauses, etc.).
e) Privatisation
The development of the private sector in industry was slower than that of other economic
branches. In 1997, the industry's contribution to the net added value in the private sector of the economy
reached 25.9%; this exceeds the contribution of the private sector in business.
The private sector prevails in manufacturing varnish and paint (85%), cosmetics (93%),
detergents (74%), meat products (67%), cooking oil (63%), bread (75%), beer and wine (over 60%),
household glassware (86%), china (79%), newspaper editing and printing (94% and 75%, respectively),
tyre, clothing, automated telephone exchange equipment (over 50%) etc.
Fields where the private sector has a significant contribution with tendencies to increase:
leather and footwear industry, wood processing, cement and construction materials industry,
pharmaceuticals, chemical fertilisers and automobile industry etc.
The contribution of the private sector is very low in sectors requiring large investment: the
extractive industry, the generation of electric and thermal power, metallurgy, refineries and petroleum
industry, manufacturing of machinery and equipment, cellulose and paper, etc.
It is noteworthy that in the private industrial sector productivity is clearly superior to that in
state-owned enterprises.
This is demonstrated by the fact that 29.7% of the total population employed in the private sector
produced in 1997 over 43% of the net added value. This is the result of a more efficient microeconomic
management, of a more active investment policy and of amortisation of the fixed capital.
OBJECTIVES AND DIRECTIONS FOR ACTION
The deterioration of the industrial and economic activity, a situation that was first seen in the
1980s, then the accelerated decline and chronic macroeconomic imbalance created between 1990 and
1998, demonstrated that in the general context of the difficulties generated by the transition process, the
socio-economic evolution of Romania was also adversely affected by the absence of an integrated global
strategy capable to define a pragmatic approach to the medium- and long-term options and goals to be
realised in the development of the main industrial branches and to evaluate and optimise the impact upon
the human development.
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