Today's Romania is a life of contrasts, or as I like to say, there are two time periods living side-by-side. Romania's cities are busy, bustling centers, growing rapidly and modernizing almost overnight. That is juxtaposed with rural life in Romania, where life is defined by working out in the field,. horse-drawn wagons, water wells, shepherds, and wood chopping to heat the home. Romania's highways are a great example. You can pass a
Mercedes (and many people say they have never seen so many
Mercedes and BMW's as they have in Romania...myself included) and then have
to hit the brakes as cars share the road with wagons and tractors. There may be a field with a combine, next to a field where people are still working with horse and plow. In the cities, people are consumed with EU expansion, exchange rates, foreign investment, and the latest shopping centers from the West. In the Romanian countryside, some may not even know that Romania is even in the EU. Again, a life of contrasts.
New shopping centers are opening almost weekly, including such shops as Starbucks, Burger King, IkEA, etc. Has life gotten better, or easier? That depends on who you ask. Since the fall of communism at the end of 1989, millions of Romanians have left to work abroad, in pursuit of higher wages and a higher standard of living. Romanians make up the largest minority group in countries like Italy, Spain, Ireland, and Austria. Many say that you are more likely to hear Romanian spoken in Italy than you are Italian, and that is NOT a joke. Sure, wages are higher abroad, but is life any easier. From my experience, many Romanian friends who are working abroad work long hours, have exhausting jobs (that often the locals refuse to do), and miss being amongst their own people. Those who have stayed in Romania, wouldn't say life is easier either. The average monthly salary is around 300 euros, light years behind wages in Western Europe. But since Romania has entered the EU, the economy is growing, but the living standard is not easy on anyone. For instance:
- Food prices are often double, if not triple the price that they are in the States
- Romanians, and Europeans in general, cannot understand why Americans complain about the rising gas prices. Romanians would LOVE to pay American prices. In the States, gas is about $4 a gallon average. And in Romania? A whopping $7.60 a gallon!
- Prices for clothing, shoes usually run about $20 or more here as opposed to in the States
- Rent is skyrocketing. Since housing is in such demand, and pretty much the only option is to stay in communist era bloc apartments, the market hike up the prices, and there is little people can do about it. The bloc apartments are not architectural beauties by any means. That said, rent in Bucureşti for an apartment with one bedroom is at least 300 Euros a month. In the center of the city, these apartments are going for 1500 Euros or more a month
- Pensions have remained at about $250 to $300 a month...do the math, life is not easy.
- Nothing is free. In Romania you pay by the hour to use a tennis court, a soccer field, or even an outdoor basketball court--as much as $20 an hour--ouch
Economic Growth
Privatization of industry was pursued with the transfer in 1992 of 30% of the shares of some 6,000 state-owned enterprises to five private ownership funds, in which each adult citizen received certificates of ownership. The remaining 70% ownership of the enterprises was transferred to a state ownership fund, with a mandate to sell off its shares at the rate of at least 10% per year. The privatization law also called for direct sale of some 30 specially selected enterprises and the sale of "assets" (i.e., commercially viable component units) of larger enterprises.
Nowadays, the inflation rate is around 8% annually. Also, since 2001, the economy has grown steadily at around 6-8%. Therefore, the
PPP per
capita GDP of Romania is $12,285. Financial and technical assistance continued to flow in from the U.S., European Union, other industrial nations, and international financial institutions facilitating Romania's reintegration into the world economy. The International Monetary Fund (IMF), World Bank (
IBRD), the European Bank for Reconstruction and Development (
EBRD), and the US Agency for International Development(
USAID) all had programs and resident representatives in Romania. Romania also attracted foreign direct investment, which in 1997 rose to $2.5 billion.
Romania was the largest U.S. trading partner in Central-Eastern Europe until Ceauşescu's 1988 renunciation of Most Favored Nation (non-discriminatory) trading status resulted in high U.S. tariffs on Romanian products. Congress approved restoration of
MFN status effective 8 November 1993 as part of a new bilateral trade agreement. Tariffs on most Romanian products dropped to zero in February 1994 with the inclusion of Romania in the Generalized System of Preferences (
GSP). Major Romanian exports to the U.S. included shoes and clothing, steel, and chemicals. Romania signed an Association Agreement with the EU in 1992 and a free trade agreement with the European Free Trade Association (
EFTA) in 1993, codifying Romania's access
to European markets and creating the basic framework for further economic integration. At its Helsinki Summit in December 1999, the European Union invited Romania to formally begin accession negotiations. In 2002, the target date of 2007 was set for Romania, along with Bulgaria, for its accession efforts. This was confirmed in 2003 at the Thessaloniki Summit and then in early 2005 Romania and Bulgaria signed the adherence treaty to EU. They formally joined the EU on January 1, 2007.
During the latter part of the Ceauşescu period, Romania earned significant credits from several Arab countries, notably Iraq, for work related to the oil industry. In August 2005, Romania agreed to forgive 43% of the US$1.7 billion debt owed by Iraq, making Romania the first country outside of the Paris Club of wealthy creditor nations to forgive Iraqi debts.
Nevertheless, it is expected that the Romanian economy will continue fast growing based on a bigger strength of the industry, the growth of the global economy and the biggest trade with Russia, Latin America and Asia. Growth in 2000-07 was supported by exports to the EU, primarily to Italy and Germany, and a strong recovery of foreign and domestic investment. Domestic demand is playing an ever more important role in underpinning growth as interest rates drop and the availability of credit cards and mortgages increases. Current account deficits of around 2% of GDP are beginning to decline as demand for Romanian products in the European Union increases. Inflation is under control. Recent accession to the EU gives further impetus and direction to structural reform. In early 2004, the government passed increases in the Value Added Tax (VAT) and tightened eligibility for social benefits with the intention to bring the public finance gap down to 4% of GDP by 2006, but more difficult pension and
health care reforms will have to wait until after the next elections. Privatization of the state-owned bank
BCR took place in 2005. Intensified restructuring among large enterprises, improvements in the financial sector, and effective use of available EU funds should strengthen output growth.
European UnionOn 1 January 2007 Romania entered the European Union. This led to some immediate
international trade liberalization, but there was no shock to the economy. The government is running annual surpluses of above 2%.
This is to be contrasted with enormous current account deficits. Low interest rates guarantee availability of funds for investment and consumption. For example, a boom in the real estate market started around 2000 and has not subsided yet. At the same time annual inflation in the economy is variable and during the last five years (2003-2007) has seen a low of 2.3% and high of 6.3%.
Most importantly, this poses a threat to the country's accession to the
Eurozone. The Romanian government plans for the euro to replace the
leu in 2010. However, experts predict that this might happen as late as in 2012. From a political point of view, there is a trade-off between Romania's economic growth and the stability required for early accession to the monetary union. Romania's per-
capita PPP GDP is still only about a 60% of the EU25 average, while the country's nominal GDP per
capita is about 53% of the EU25 average.
In the winter of 2004 the political leadership of the current government introduced a flat tax of 16% that was introduced on January 1, 2005. This is done in hope for higher GDP growth and greater tax collection rates. The reform, which some called a "revolution" in taxation, was met with mild discussions and some protests by affected working classes.
The accession of Romania into the European Union has brought about new geographical dimensions as the EU has opened up to the Black Sea.
Major industries in Romania are precision machinery, motor vehicles, chemicals, pharmaceuticals, electric goods (especially home appliances), food, fashion and clothing.
Transportation
Due to its location, Romania is a major crossroad for international economic
exchange in Europe. However, because of insufficient investment, maintenance and repair, the transport infrastructure does not meet the current needs of a market
economy and lags behind Western Europe. Nevertheless, these conditions are being improved. As of February 2008, only 280 km of motorways are in use. Nevertheless, the extensive upgrade motorway network is among the top priorities for the government. There are plans to build another 1,000km of motorways in a first stage which by optimistic forecasts will be ready by 2013.
World Bank estimates that the railway network in Romania comprised in 2004 22,298 km of track, of which 36% electrified and 27% double track, which would make it the fourth largest railroad network in Europe. According to europaworld.com, in 2004, the railways carried 8.64 billion passenger-km in 99 million passenger journeys. In addition it carried 73 million metric tones, or 17 billion ton-km of freight. The combined total transportation by rail constituted around 45% of all passenger and freight movement in the country. In terms of size and scale of operations, railways are comparable with larger EU railways.
Bucharest is the only city in Romania which as of 2007 has an underground railway system, comprising both the Bucharest Metro and the light rail system Regia Autonomă de Transport Bucureşti. Although construction was planned to begin in 1941, due to geo-political factors, the Bucharest Metro was only opened in 1979. Now is one of the most accessed systems of the Bucharest public transport network with an average ridership of 800,000 passengers during each workday. In total, the network is 63 km long and has 45 stations. It is fast, efficient, and quite modern. There are new lines in construction, and hopes to connect the Metro to the city's two main international airports.
Industry
Romania has been very successful in developing dynamic telecommunications, industrial robots, aerospace, and weapons sectors. Industry and construction accounted for 32% of gross domestic product (GDP) in 2003, a comparatively large share even without taking into account related services. The sector employed 26.4% of the workforce. Romania
exc
els in the production of automobiles, machine tools, and chemicals. With the manufacture of 0.5 million vehicles in 2003, Romania was the Europe's third largest producer of automobiles. In 2004 Romania enjoyed one of the largest world market share in machine tools (5.3%). Romanian-based multinationals such as Dacia Logan,
Igero bus,
Petrom,
Rompetrol,
Bitdefender are brand names throughout the world. What is less well known is the vital role of small- to medium-sized manufacturing firms, which specialize in niche products and often are owned by management. These firms employ two-thirds of the Romanian workforce.
The growth of the industrial sector was the principal stimulus to economic development. In 2007 manufacturing industries accounted for approximately 35 percent of the gross domestic product and 29 percent of the work force. Benefiting from strong domestic encouragement and foreign aid, Bucharest's industrialists introduced modern technologies into outmoded or newly built facilities at a rapid pace, increased the production of commodities--especially those for sale in foreign markets--and plowed the proceeds back into further industrial expansion. As a result, industry altered the country's landscape, drawing millions of laborers to urban manufacturing centers.
Construction activity (about 10% of GDP) has increased due to recent tax incentives. Romania is becoming an increasingly popular choice for British property investors, according to recent research from Currencies Direct. The latest Global Emerging Markets Index from the foreign exchange company shows that Romania has made the top ten for the first time, reaching number nine. The monthly index is based on the number of foreign exchange transfers undertaken by the firm to emerging market regions for property purchases. According to Currencies Direct, Romania has seen significant increases in house prices in recent years and its interest rate has dropped from a level of 154 per cent in 1997 to 8.9 per cent in 2005.
Tourism
Tourism is a significant contributor to the Romania Economy. In the
1990s the government heavily promoted the development of skiing in the Romanian Carpathians. Domestic and international tourism generates about 6% of gross domestic product (GDP) and 0.8 million jobs. Following commerce, tourism is the second largest component of the services sector. In 2006 Romania registered 20 million overnight stays by international tourists, 4% higher than in the previous year and an all-time record. Two-thirds of all major trade fairs from Central Europe are held in Romania, and each year they attract 2 to 3 million business travelers, about 20% of whom are
foreigners. The four most important trade fairs take place in Bucharest,
Cluj-
Napoca,
Iaşi,
Timişoara.
In the year 2007, 18,345,667 tourists vacationed in Romania. The total revenue was $4.2 billion and with an average expenditure of $679 per tourist. Over the years, Romania has emerged as a popular tourist destination for many Europeans, often competing with Greece, Italy and Spain. Romania destinations such as Constanta and
Mamaia (sometimes called the Romanian Riviera) have become very popular among European tourists.
Romania has a highly developed tourism infrastructure, making it a good market for tourism-related equipment and services.
Where are we now?
The main dissatisfaction Romanians have is linked to their material
situat
ion - 71% say they are discontent or very discontent with the money they have. On the other side there are friends and family, which give reasons for satisfaction to over three quarters of the respondents. When asked to evaluate their own household income, a third (35%) say it is not enough to cover the minimum costs of living, another third (34%) say it covers just the minimum costs, a fifth(20%) say they can live decently, 7% state they can afford some more costly expenses
and only 1% say they can afford anything they want.
Corruption still remains a major concern, as well as jobs that pay livable wages. Much is needed in terms of infrastructure: roads, schools, more modern facilities, etc.
Romania is currently under much pressure to upgrade its schools to that of Western European standards. To put it bluntly, the Romanian education system is a mess. Facilities are needed, qualified teachers are at a premium, and student discipline is a new concept.
Since 1989, much has changed in Romania. It is by no means a third-world country. Romania is a nation in transition, dynamic, growing, and vibrant.
Check back for updates on the religious revolution of Romania.
Timişoara is a city in the Banat region of western Romania. It is the capital of Timiş County. The city is also called "Little Vienna", because it belonged for a very long time to the Habsburg Empire and the entire city center consists of buildings built in the Kaiser era, which is reminiscent of the old Vienna. Timişoara is an important university center with the emphasis on subjects like medicine, mechanics and electro-technology. An industrial city with extensive services, it was the first European city to be lit by electric street lamps in 1884. It was also the second European and the first city in what is now Romania with horse drawn trams in 1867. There are numerous claims that Gustave Eiffel, the creator of the Eiffel To
wer in Paris, built one of Timişoara's footbridges over the Bega. The old city consists of historic city quarters with several historic squares and proms. The city was also the first city in the Austro-Hungarian Empire to have public lighting using suet candles and lamps with oil and grease. Timişoara also became the first city in Europe to have electric public lighting on the 12th of November 1884 (four years after New York City).
Opera House
The inside courtyard
Thank you to the many of you who prayed for the Andrew Palau Festival this weekend in Bucureşti. The festival featured activities for kids, classical concerts, extreme sport demonstrations, concerts, and the presentation of the Gospel at each event. A Romanian group "Proconsul" sang, along with Hillsong Church from London, and several local Romanian Bands. Over 7000 turned out the first night of the festival and many made the first step in establishing a relationship with Christ. Throughout the week, Andrew Palau and some of the musicians and extreme sports guys spoke in schools, to the government, business officials, etc. about Christ. In the month of June, there will be several follow-up meetings with participants to talk one-on-one about what it means to come to Christ and to live for HIM. I was happy to see the unity displayed at the event and am proud to see how so many churches came together (over 50) to make the event run smoothly--that is a HUGE accomplishment in and of itself. I am more pleased, however, to see the commitment the churches are making to do effective and thorough follow-up. Please continue to pray that people will continue to make the commitment to follow Christ and that the Next-Steps meetings will go well. 
