BR 04/2017

WHERE ROMANIA TALKS BUSINESS May, 2017 / Volume 21, Issue 4

www.business-review.eu

SAFE AS HOUSES: RESIDENTIAL MARKET MARKS SECURE 2017

6x

HOW MEDICAL SUBSCRIPTIONS HELP HEAL AN AILING SYSTEM

26xx

BLACK SEA ENERGY INVESTMENTS RUN INTO RED TAPE

32xx

USEFUL MOBILE APPS WINNING CONSUMERS’ HEARTS

36xx

CSR STEPS UP TO SUSTAINABILITY

www.business-review.eu Business Review | May 2017

• Editorial •

EDITORIAL 3 REAL ESTATE

Anda Sebesi • Editor-in-Chief • 6 Safe as houses: residential market marks secure 2017 COVER STORY

Getting involved

10 Firms focus CSR efforts on sustainability

Companies on both the local and international markets are increasingly aware that simply reporting their profits to their shareholders is no longer a valid business model on its own. Although profit remains the most important thing for a business, in the past decade firms have also focused their efforts on getting involved in the communities in which they operate, paying increased attention to all their stakeholders. Known as corporate social responsibility (CSR), companies’ involvement in society has made significant steps towards maturity on the local scene in recent years, but the

IT 22 Adobe Romania to hire over 50 engineers for Bucharest site

24 Companies and cities navigate digitalization challenges and opportunities

concept is still not well known by all businesses active in Romania.

While multinationals were the first to implement CSR initiatives in Romania, in time the concept has caught on among local players

MONEY

too. So both the amount of projects implemented by companies

28 Romania’s planned EUR 10 bil-

and the number of NGOs that they have partnered to implement

lion wealth fund raises questions of transparency, investment policy

their initiatives have increased significantly.

But more than the quantitative perspective, the qualitative one is important for the local CSR sector, as it is a clear sign of its progress. The fact that more players are making the transition

30 Romania facing new EU funds programming period with old problems

from CSR projects to initiatives that embed sustainable principles in their daily business is an example in this regard. In addition, an increasing number of firms are adopting a comprehensive CSR model that addresses every business process and fewer are limiting themselves to one-off investments in society.

Last but not least, communities have played a significant role in companies’ efforts to address their needs and shape their interventions, as the public want to see that a business is doing something apart from just offering its products and services.

CITY 40 Lights, camera, TIFF! 42 Ghost in the Shell 44 Bye-bye Bucharest: lamenting a long (but not hot) summer

46 Cultural calendar

FOUNDING EDITOR: Bill Avery, EDITOR-IN-CHIEF: Anda Sebesi, DEPUTY EDITOR-IN-CHIEF: Simona Bazavan JOURNALISTS: Georgeta Gheorghe, Otilia Haraga, Romanita Oprea, Ovidiu Posirca, Oana Vasiliu, HEAD COPY EDITOR: Debbie Stowe COPY EDITOR: Eugenia Pupeza, PHOTO EDITOR: Mihai Constantineanu, ART DIRECTOR: Raluca Piscu PUBLISHER: Bloc Notes Media, ADDRESS: No. 10 Italiana St., 2nd floor, ap. 3, Bucharest, Romania­­­­, LANDLINE: Office: 031.040.09.31 EXECUTIVE DIRECTOR: George Moise, BUSINESS DEVELOPMENT DIRECTOR: Oana Molodoi, SALES DIRECTOR: Ana-Maria Nedelcu SALES CONSULTANT: Valeria Cornean, EVENTS DIRECTOR: Oana Albu, MARKETING: Adina Cretu, Marius Andronic, Patricia Neamtu PRODUCTION: Dan Mitroi, DISTRI­­BUTION: Eugen Musat EMAILS: editorial@business-review.ro, sales@business-review.ro, events@business-review.ro­

ISSN NO. 1453-729X

www.business-review.eu Business Review | May 2017

4 NEWS

WHO’S NEWS BR welcomes information for Who’s News.

Submissions may be edited fo­­­r length and clarity.

Get in touch at simona.bazavan@business-review.ro

Manuela Ciugudean-Toma is PwC’s new marketing and communication leader for South-Eastern Europe. She will coordinate the marketing teams in 11 countries in the region. Toma has over 15 years’ experience in developing and implementing marketing campaigns in several European countries. Before joining PwC, she led the marketing team of Intel Corporation in SouthEastern Europe.

Anca Deaconu has been appointed senior patent attorney in the intellectual property department of NNDKP. She is specialized in patents – electrical engineering IT&C. Over her past seven years Deaconu has worked as an engineer for an international construction company in the energy field and subsequently joined the State Office for Inventions and Trademarks (SOIT) where she started as a patent examiner, continued as director of the electricity – physics department and was subsequently promoted to director of the department of patents inventions and innovation support. page 5

Vodafone celebrates 20 years in Romania

Vodafone Romania cuts roaming charges

By Georgeta Gheorghe Telecom operator Vodafone

and those who renew subscrip-

charge. Vodafone is a global

Romania is axing roaming

tions starting from EUR 10, as

leader on the segment of 4G

charges for individual pay-as-

well as those who activate extra-

international roaming services,

you-go users and subscribers.

options on their pre-paid cards

according to a report by global

The benefits are available to

from EUR 8. Moreover, calls to

independent research com-

customers who travel in the

Vodafone Romania users while

pany Ovum. The study shows

European Economic Space,

in the European Economic Space

that, in most markets included

comprising all EU countries

will be free to receive. The most

in the study, Vodafone offers

plus Iceland, Lichtenstein and

recent portfolio of corporate

4G roaming in over 100 des-

Norway. The move is part of

subscriptions launched by the

tinations, representing more

a campaign designed to cel-

operator also gives companies

than the double of the number

ebrate 20 years in Romania and

minutes and data in the Euro-

of destinations offered by other

is available to new customers

pean Economic Space at no extra

operators.

IMF ups local GDP growth forecasts for 2017, 2018

By Georgeta Gheorghe

April, ahead of the financial institution’s Spring Meeting.

Moreover, the IMF also improved slightly the forecast GDP growth in 2018, from 3.3 percent to 3.4 percent, as estimated in the autumn.

Accordingly, in 2017 Romania is on course to record the

The International Monetary

second biggest economic growth

Fund (IMF) has raised its

in Europe, after Iceland on 5.7

economic growth forecasts for

percent. Overall, Europe will post

Romania for 2017, from 3.8 per-

economic expansion of 2 percent,

cent to 4.2 percent, according

while the emerging countries,

to the latest World Economic

which include Romania, will reg-

Outlook report published in

ister 3 percent GDP growth.

The government expects the economy to grow by 5.2 percent this year

www.business-review.eu Business Review | May 2017

NEWS 5

Sebastian Ghita went missing in late December

Hunt for fugitive businessman Sebastian Ghita ends in Serbia

By Ovidiu Posirca Controversial Romanian

arrest warrants for him. Ghita,

videos, he spoke about close

businessman Sebastian Ghita

who served as an MP between

relations between the judiciary

was arrested by the Serbian

2012 and 2016, has been pros-

and representatives of the intel-

authorities in mid-April, put-

ecuted and put on trial in several

ligence community. He claimed

ting an end to a four-month

corruption cases. The Romanian

that all the lawsuits against

search operation that involved

authorities are now seeking to

media moguls in Romania were

European police forces.

extradite him.

based on fake accusations and

Ghita went missing in late

“Sebastian Ghita was identi-

that representatives of the

December 2016, shortly after

fied and detained based on arrest

intelligence community had

the extremist political party

warrants issued in Romania,� said

pressured former PM Victor

that he backed, the United

the minister of justice, Tudorel

Ponta while he was in office.

Romania Party (PRU), failed

Toader.

to get into Parliament in the December 11 elections.

Since then, the authorities have issued two preventive

While on the loose, Ghita ap-

Ghita made a fortune in the IT sector and some of his

peared in several video record-

companies secured lucrative

ings broadcast by his own news

contracts with the state in vari-

station, Romania TV. In the

ous fields.

The IMF also revised down-

tatives of the financial body

wards the forecast unemploy-

warned at the time that on the

ment rate in Romania, which

medium term the growth pace

could fall to 5.4 percent in 2017,

will slow, unless investment re-

as opposed to the 6.2 percent

ceives a boost, structural reforms

predicted previously. In 2018, the

are accelerated and institutions

unemployment rate is expected

are consolidated.

to stand at 5.2 percent.

Natalia Gelshtein-Kiss is the new general director of Danone Romania, Bulgaria and the Adriatic countries. She replaces Adrian Pascu, recently promoted to commercial vicepresident of Danone Russia, in the dairy division. GelshteinKiss has been working for Danone since 2003. For the last year, she was director at City Unit Moscow and regional sales director for Moscow, while previously she served as sales director in Ukraine and the Czech Republic for seven years.

In April, the government an-

In March, the IMF had tipped

nounced that the economy could

local GDP to grow by 4.2 percent

grow by more than expected this

in 2017, due to a boost in private

year. Minister of finance Viorel

consumption triggered by a new

Stefan stated on 12 April that

round of fiscal easing measures

GDP could rise by 5.2 percent,

implemented by the govern-

with agriculture expected to be

ment, as well as projected wage

the sector that contributes most

increases. However, represen-

to the figure.

Giampaolo Manzonetto has been appointed general director of Albalact Romania, the dairy producer controlled

by Lactalis Group. He is the general director of Lacatlis Romania and Parmalat Romania and following the move he will manage all the group’s operations in Romania.

Manzonetto joined the management team of Parmalat in 1998. In 2003 he started working in Romania and became general director of the local operations of Parmalat in 2007. In 2014, he took the helm at Lacatalis Romania, LaDorna and Parmalat.

www.business-review.eu Business Review | May 2017

6 REAL ESTATE

Safe as houses: residential market marks secure 2017 The residential market looks set to maintain a sustainable growth pace this year, as developers push the pedal on new projects, while price increases are expected to remain in the one-digit range.

By Simona Bazavan

Some 470 homes worth a total EUR 30 million were sold last year in Cosmopolis, which was up by 10 percent against 2015

G

etting on the property ladder is eas-

index. This is lower than the 119 salaries

ier today than it has been in years,

required last year and considerably below the

real estate consultants and develop-

395 average salaries or over 32 years needed

ers suggest. It currently takes a would-be

to buy the same property in 2008, the year

homeowner 114 average monthly salaries, or

when the local residential market peaked.

less than nine and a half years, to buy a new

“This is the best level in the history of the

apartment of about 50 sqm in Bucharest,

modern Romanian residential market,� Gabri-

according to Coldwell Banker’s affordability

el Voicu, head of the new homes division at

www.business-review.eu Business Review | May 2017

Coldwell Banker Romania, tells BR. All this indicates that after several years of

REAL ESTATE 7 New Residence, tells BR. “There is a shortage of some 300,000 homes. Therefore, even if

constant, and some also contend sustainable

some 15,000 new units are to be delivered

growth, the market will remain on this posi-

this year according to estimations, this is still

tive trend in 2017 as well. There are several

not enough to cover the existing need, which

arguments in favor of this, market represen-

leads us to anticipate constant growth for the

tatives say.

market over the coming years,” he says.

The first is the fact that incomes have

Last and definitely not least is the fact that

been going up over recent years, especially

on the supply side developers themselves

in Bucharest. “There is real demand in the

are pushing the pedal on new investments.

market because we can see an increasingly

The number of apartments to be delivered

active middle class taking shape. In Bucha-

this year will hit the highest level since 2009,

rest there is constant growth in the number

Ahmet Buyukhanli, CEO of Vision Land De-

of highly trained employees,” Silviu Grig-

velopment, the developer of the Cosmopolis

orescu, general director of Hanner Romania,

residential project in Bucharest, tells BR.

tells BR. This includes people working for

“The residential market in Bucharest will

various outsourcing companies and also IT

go up and this is something we can all see

specialists whose average salary exceeds EUR

because of the high number of projects pres-

1,200 per month and whose number went up

ently being developed,” he predicts.

by 20 percent in 2016 alone, he adds. The developer says that more than a third of those who have

According to a survey carried out by online real estate platform Imobiliare.ro, in Bucharest alone 76 more

moved into The Park

residential projects

Apartments, the proj-

are being developed,

ect it has developed in Bucharest, work

in various stages,

in the IT industry.

than six months ago. Outside the

Additional good

capital the outlook

news comes from

is equally positive

the fact that banks

with 25 more projects

are adopting a more

in Cluj-Napoca and 37

and more relaxed mortgage lending policy, as well as the continuation of the government-guaranteed mortgage

in Iasi to name just two regional cities. “In Bucharest we estimate that 350 projects in

lending program Prima Casa for the next five

various stages are currently being developed,

years, Bartosz Puzdrowski, CEO of Impact

not counting those that have been fully

Developer & Contractor, tells BR. This pro-

sold. In Cluj-Napoca there are 110, the same

vides some much needed stability for both

number in Timisoara, and 120 in Iasi. These

buyers and developers, he adds.

are projects with at least 30 housing units

Trading up, where an owner sells one

each, Adrian Erimescu, co-founder and CEO

property to buy a better located and/or larger

of Imobiliare.ro, tells BR. This reflects the

one, thus ensuring cash liquidity in the mar-

overall higher interest coming from potential

ket, is another growth factor, adds Voicu. “I

buyers. The online platform reported a 40

think there is a market shaping up of former

percent increase in searches during the first

Prima Casa buyers who now want to trade

quarter compared to the same quarter a year

up. They are young people who bought an

ago, according to company data.

apartment five to eight years ago and who

Coldwell Banker data indicate that some

have in the meantime evolved professionally,

12,000 homes are scheduled for delivery this

or their families have grown,” notes Grigore-

year in Bucharest and its surrounding areas,

scu.

compared to 10,000 last year. “One should

Given the need for new housing in

note that another 1,800 units were scheduled

Bucharest, growth should continue in the

for last year but they got postponed until

years to come, Cristian Mercioniu, GM of

2017,” notes Voicu.

www.business-review.eu Business Review | May 2017

8 REAL ESTATE

THE MIDDLE WAY A developing trend, he adds, is the growth of the mid-market, reaching 39 percent of last year’s supply against 32 percent a year before.

More importantly, this trend is expected to continue, as new projects are being developed in the vicinity of office hubs such as Barbu Vacarescu-Floreasca and PolitehnicaGrozavesti. This is underpinned by both bigger budgets and more demanding buyers, market representatives say.

“Buyers’ demands and expectations are high because they have become more and

ISHO, even in secondary cities like Timisoara.

same target. “Our objective is to maintain

more educated with regards to the residential

Buyers pay attention and ask very specific

last year’s sales level and even mark a slight

market. This is the consumer behavior of an

questions about the quality of the construc-

increase by reaching 540 units. Last year we

educated buyer who knows exactly what he

tion itself, the materials used, and they often

sold 470 homes worth a total EUR 30 million,

or she wants,” outlines Buyukhanli.

drop over with their homework done,” he

which was up by 10 percent against 2015,” says

tells BR. He too speaks of an interest in larger

the CEO of Vision Land Development

All this translates into an increasing preference for new apartments over so-called

apartments as well as a developing local trend

“old” ones built before 1990, as more and

of people who already own properties in the

apartments in 2016 than the previous year

more new projects are being developed and

suburbs moving downtown.

and expects to sell the remaining units of its

in more desirable areas. There is also a shift

Will all this buzz on the local residential

Hanner Romania sold 50 percent more

The Park Apartments this year. The next step

towards larger homes. “We’re seeing interest

market also translate into price increases by

will be to start work on its second residential

in two-bedroom apartments catching up with

the end of the year? “Apartment prices will

project on the local market in the second half

one-bedroom apartments which up until now

go up this year, in fact, they have been on an

of this year, contingent on securing all the

upward trend for the

building permits, adds the firm’s GM. The

past 12 months. The

project will be located on the grounds of the

highest growth rates are

former Grivita brewery.

reported in Cluj-Napoca

Elsewhere, some 30 percent of the housing

and Timisoara but in

units being developed in the New Residence

Bucharest too they

project were sold last year, despite the fact

vary between 6 and 7

that it was in its early development phase.

percent,” says Erimescu.

“This year we expect to double the monthly

In fact, all players talk

sales figures given that works are advancing,

about price increases of

and by the end of the year we estimate that we

about 3 to 10 percent by

will reach the 90 percent threshold,” com-

the end of 2017 given the

ments Mercioniu.

have dominated demand,” said Erimescu. De-

current market conditions. Any rise, however,

velopers confirm this. “In 2016, in our project

must be coupled with an overall increase in

DES RESES ADVANCE MORE SLOWLY

Greenfield Baneasa, two-bedroom apart-

average income in order to be sustainable,

The high-end segment is also expected to post

ment acquisitions increased to 44 percent,

notes Grigorescu. “I think the market is cur-

growth this year, although the buzz here is

and three-bedroom ones to 16 percent,” says

rently balanced with regard to demand and

not as great as across the overall residential

Puzdrowski.

supply. There is a chance on the short term

market. “There isn’t the same effervescence

that supply will slightly outstrip demand, but

and that can never happen, but there are

we aren’t there yet,” he says.

encouraging signs. The reasons for this are

Similar trends can be observed outside Bucharest as well. Romanian real estate developer Ovidiu Sandor, who has kick-started

Developers’ forecasts are backed by good

mainly financial – the fact that there is liquid-

a EUR 130 million investment in a mixed resi-

results posted last year, they say. Impact

ity in the market and access to it – and there is

dential and office development in Timisoara,

Developer & Contractor sold or pre-sold 563

also an adequate supply. In both senses, the

western Romania, expects to deliver and sell

apartments in Greenfield Baneasa, the devel-

market looks encouraging,” Andreea Comsa,

the project’s 1,200 apartments in three years’

oper’s flagship project, which was up by 15

managing director of Premier Estate Manage-

time. “The feedback we have been given is

percent y-o-y. This year the developer aims to

ment, tells BR.

very positive, which is proof that the market

maintain and even surpass this growth rate,

has grown more mature and that buyers

says Puzdrowski.

appreciate a more complex project such as

The developer of Cosmopolis has set the

Buyers are mostly prospective owner-occupiers, as the rental yield (the ratio between a luxury apartment’s value of acquisition versus

www.business-review.eu Business Review | May 2017

REAL ESTATE 9

the rent it generates) is unattractive to inves-

first-time buyers who acquire a property

tors, Mihaela Pana, partner at the residential

worth less than approximately EUR 100,000

agency Cushman & Wakefield Echinox, tells

could pay no VAT on the transaction – at pres-

BR. “There is however interest from those

ent they pay 5 percent. Although no concrete

who have an immediate need for such prop-

steps have been taken in this direction, mar-

erties, this demand stemming from a lack of

ket representatives are wary of the instability

new projects being developed between 2009

they say it would occasion.

and 2015 as well as a relatively low appetite

“It would only have negative effects. It

for such properties during the same period,”

brings about a lot of instability in the market

she outlines.

because should it come into force it is very

There is also demand for homes with

likely that it would later be scrapped due to

a prime location which don’t necessarily

its incompatibility with EU legislation. There

qualify as luxury, but rather premium, adds

is also the question of what would happen to

Comsa. “We have in our portfolio volume

those who have signed a zero VAT pre-sale

projects that qualify as upper-middle and

agreement should the law later be axed,” cau-

high-end without being considered luxury,

tions Erimescu. While on one side the mea-

where a 150 sqm penthouse sells for between

sure would cause instability by making po-

EUR 300,000 and EUR 400,000. This is a

tential homebuyers postpone their purchase,

clear sign that there is room for growth on

it could also lead to unsustainable market

the premium segment. On the luxury

growth, warns Comsa. Such a fiscal change should instead be based

segment a penthouse often goes

on a coherent medium- and

for beyond EUR 1million,”

long-term strategy, says

she says.

Grigorescu, adding

Prices of high-end

that reducing the tax

properties seem to have stabilized

burden for larger

between EUR 2,500

properties would

and EUR 3,500 per

make more sense.

built sqm, according

“Properties worth over EUR 100,000

to Pana, who adds that she doesn’t expect

are taxed at about

any changes to that in

15 percent more than those below this thresh-

the foreseeable future.

old. Charging 5 percent VAT

“There will several products up for sale which, because of their

on properties of up to EUR 150,000

unique location, will reach EUR 4,000 per

would give buyers greater comfort, it would

sqm, but these will be an exception,” she

help those who want to start a family as well

notes.

as the development of projects in better loca-

The growth potential is also confirmed by the new projects being developed, say

tions,” he argues.

Comsa too thinks that increasing the 5

consultants. “Although land suitable for such

percent VAT threshold would be of better

developments is becoming rarer and securing

help to the residential market, likewise rais-

the building permits is becoming equally

ing the 5 percent VAT on acquiring a second

hard, one can see that there are quite a lot

property.

of construction sites and others will start up over the coming period,” says Pana.

Yet not everyone agrees the proposal would be a bad idea. “I think it is too early to discuss the impact of this decision on the

PROPOSED VAT CHANGES WORRY PLAYERS

residential market since they haven’t adopted

While all players are optimistic about the

this bill yet. I think it’s a good initiative in

performance of the overall residential market

social terms, as it would facilitate the acquisi-

through to the year end, there are concerns

tion of new and more spacious houses, with

about a possible VAT change for residential

two or three bedrooms. At the same time, the

transactions. Liviu Dragnea, head of the

current uncertainty is hurting the market,”

ruling PSD, suggested earlier this year that

concludes Puzdrowski.

10 COVER STORY

www.business-review.eu Business Review | May 2017

Firms focus CSR efforts on sustainability With companies developing more complex projects, the local CSR scene is making significant steps towards maturity. Firms are focusing their strategies on sustainability, making the transition from ad hoc intervention to an integrated approach to local community involvement.

By Anda Sebesi

www.business-review.eu Business Review | May 2017

COVER STORY 11

A

ccording to a 2016 survey, CSR Trends and Realities in Romania, conducted by EY Romania and CSRmedia.ro, companies active on the local market are increasingly using their

corporate social responsibility (CSR) activities as a strategic function that is integrated in their larger policy of sustainability. The study found that in 2015 firms invested in CSR projects mainly for greater awareness and visibility (56 percent) and because such activities are part of their public relations strategy (46 percent). But there are other reasons: their shareholders require CSR involvement (40 percent), the value of their firm increases as a result of developing such programs (25 percent) and company policy involves CSR activities (21 percent). “We’re seeing an evolution of social responsibility and sustainability practices that indicates the increased maturity of the market, current policies and professionals in this field. But, more importantly, we’re seeing a new strategic understanding of this function at the level of the top management of companies that operate in Romania,” stated Bogdan Ion, country managing partner at EY Romania.

Although the same study shows that in 2016, CSR budgets had stagnated since 2015, 47 percent of the respondents still indicated an increased budget. While a quarter of the companies surveyed said they had a CSR budget of between EUR 100,000 and EUR 500,000, 55 percent of them had between EUR 5,000 and EUR 100,000. Research shows that, while education, healthcare and the environment continue to be the most popular fields for company intervention, the social sector posted a significant drop. “Social responsibility needs to be seen from a strategic perspective and has to be integrated within the business. Any disconnection of the two components can generate reputational risks that affect not just the company but its stakeholders too. It is time for all companies – whether private or state-owned, foreign or local – to rethink their approach to their involvement in society and bring CSR to the next level, that of sustainability,” said Lacramioara Botezatu, project manager at CSRmedia.ro.

WHERE ROMANIA STANDS Pundits say that while Romania has made significant steps to include social initiatives in companies’ DNA, it is still learning what CSR means and how it should be integrated into corporate strategies.

“The efforts made by companies to approach a socially responsible business model are more visible than in previous years, also because of consumers who pay attention to the entire process of manufacturing and distribution of a product before buying it. Plus, they are careful of the impact that the company has in the community,” says Alexandra Maier, corporate social responsibility specialist at Avon Cosmetics Romania.

At present, two types of firms invest in CSR projects: multinationals that benefit from the expertise of their mother company and invest constantly in such programs, and small businesses that sponsor specific social projects linked to their field of activity. In addition, while both NGOs and companies are running more social campaigns on the local CSR market, this comes with a better understanding of the concept by both business and the public.

www.business-review.eu Business Review | May 2017

12 COVER STORY

In the Romanian CSR field, Alina Stan,

and blood donation sessions were orga-

CSR programs coordinator at Orange

nized in another 39 companies with almost

Romania, notes that money or in kind dona-

2,000 donors.”

tion campaigns are still first choice. “But we have passed the phase when CSR was

RELEVANT INITIATIVES FLOURISH

similar to philanthropy. We started talking

Romanian businesses in general have

more about sustainability and now we’re

aligned their practices more and more with

seeing strategic CSR campaigns developed

global ones. In the last decade, businesses

by companies in connection with their

have become more aware that CSR is not

business and expertise,” she adds. Stan

just “nice to have,” but should be a strategic

comments that sustainability and social

priority. “We have seen more and more

responsibility are part of Orange’s long-term

companies stepping outside their direct

strategy, while social projects are more

area of business and using their influ-

often transversal within the company. So,

ence to support solutions to communities’

while some of the CSR projects that target

fundamental problems – from education

its employees are developed with the HR

to climate change. Nowadays, companies

department, the operator has added a social

are looking at which CSR initiative is most

part to its commercial campaigns and, in

effective in producing change in a certain

such cases, the marketing department has

area, be it economy, society or the environ-

played a significant role.

ment,” say Lidl Romania representatives.

“The focus on social responsibility has

Despite the difficulty of evaluating a CSR

continued to increase over time, and could

campaign quantitatively and qualitatively,

become default amongst businesses. This

some initiatives have drawn attention on

can only prove beneficial to society overall,

the local scene. For example, Maier of Avon

as each company will wish to increase its

says that in recent years she has appreci-

efforts to adopt sustainable behaviors,

ated the integrated approach of ING Bank

which in return leads to healthy competi-

through its projects that meet real needs in

tion in this field,” say representatives of Lidl

a coherent, constant manner and that are

Romania. At present, they add, companies

in line with the lender’s activity, from the

worldwide are tending to implement a com-

Startarium, a program for entrepreneurs,

prehensive CSR model that best suits their

to Banometru, Urbaniada and financial

business profile and produces the desired

support provided to the Odesa tempo-

results for the economy, society and the

rary shelter. Along the same lines, Stan of

environment.

Orange Romania cited Curatenia Nationala,

Angela Galeta, director at the Vodafone

a campaign developed and implemented by

Romania Foundation, says that the big-

Let’s Do It Romania!. “It is a social respon-

gest success on the local CSR market is the

sibility action that has developed very well

increasing culture of volunteering – both in

over time and managed to gather both indi-

terms of the number of people involved and

viduals and a large number of companies,”

the quality of the volunteering activities.

says Stan.

“More and more companies are encouraging employee engagement through volunteer-

For Roxana Colisniuc, corporate social responsibility officer at ING Bank, two proj-

ing or donating to a good cause, which is a win-win situation. People

ects have attracted her attention: Dupa noi (developed by Coca-Cola)

become more aware about matters concerning their community, feel

and Romania Meseriasa (by Petrom). “Dupa noi sums up all the com-

motivated to get involved and are proud to work for a responsible

pany’s initiatives and supports future ones. It is a correct platform,

company. NGOs solve different issues with the help of organized

CSR wise, in close connection with the company’s impact and which

teams of volunteers,” says Galeta.

involves its main stakeholders,” says Colisniuc. As for the initiative

Since its beginning, the Vodafone Romania Foundation has

developed by Petrom under the umbrella of the Romania Meseriasa

fostered employee engagement through actions such as the first

project, the ING Bank representative says that it is a bold endeavor,

Romanian payroll system to allow donations or by volunteering.

as the current education system discourages vocational schools.

During its 19-year existence, it built 186 social houses with the help

“Petrom somehow creates a private structure through which it offers

of Vodafone Romania employees. “In 2016, we ran 24 volunteering

real chances to those for whom this type of education is the sole

activities involving over 1,500 volunteers from Vodafone Romania

chance of having a decent life,” adds Colisniuc.

www.business-review.eu Business Review | May 2017

13 - PARTNER CONTENT -

Ringing in change in the community Angela Galeta, director of the Vodafone Romania Foundation, tells BR about the main strategic directions that the foundation followed last year and outlines the major projects in which it was involved.

Arad, Bistrita, Brasov, Calarasi, Constanta, Drobeta-Turnu Severin, Sfantu Gheorghe, Slobozia and Targu-Mures. The 18 centers we have renovated so far (eight in 2015 and ten in 2016) provide 60 percent of the transfusion blood needed at national level. Second, there are the “Connecting for Good” regional and national projects (using technology for social change), out of which ten are telemedicine solutions (e.g. for emergency situations or remote monitoring of patients from rural areas, such as an app for children with epilepsy and diabetes). Third, we invested in the Rural Areas program, which helps small communities to develop healthcare, social services and educational projects – this is How did Vodafone approach its main CSR

as this is the only NICU department in the south-

now on its second run and has over 30,000

activities in 2016?

east. A hundred premature babies or children

beneficiaries. The “Be prepared!” SMURD

Vodafone Romania’s social involvement in

born with serious health problems receive treat-

Caravan – a mobile center for teaching

the community is done largely through the

ment here. Unfortunately, 50 babies hospitalized

members of the public how to react in emer-

Vodafone Romania Foundation, an indepen-

here in 2015 died before the age of one month.

gency situations and how to give first aid is

dent NGO, separately from the company’s

The actual space is insufficient and the medical

another project. Last but not least, “Letters

commercial activities. The Vodafone Roma-

equipment needs to be replaced. Implementing

to Santa” was the largest volunteering proj-

nia Foundation has been active for 19 years

a telemedicine solution – based on the model

ect in 2016 and mobilized 630 volunteers to

mobilizing change in the community and

from Marie Curie Hospital in Bucharest – will

prepare Christmas gifts for 600 children from

improving people’s lives by running projects

considerably improve the quality of medical care

18 underprivileged communities.

in the areas of healthcare, education, social

in Constanta Hospital, but, in order to develop a

services and volunteering. Besides this,

telemedicine solution, the NICU must be renovat-

In your opinion, what are the main features

the company runs programs related to the

ed and brought up to 21st century standards.

of the local CSR market?

industry, such as online child safety, WEE

The project is run in partnership with the Da-

management and recycling, and reducing

ruieste Aripi and Inima Copiilor associations and

years that more and more companies are

CO2 emissions.

has a total estimated value of EUR 1.3 million.

keen to develop a long-term CSR strategy

It has become obvious over the last few

The project is expected to be finished in about

with efficient and sustainable projects

What can you tell us about your project

11 months. More details are available at http://

targeting real problems. More and more

involving the neonatal intensive care unit

www.nounascuticonstanta.ro/.

companies are drawing on the expertise of

at Constanta County Hospital?

civil society in choosing the problem they

The renovation and modernization of the

What other CSR projects did Vodafone roll out

want to solve and in finding the best solu-

neonatal intensive care unit (NICU) at Con-

last year?

tion for the problem. There is also concern

stanta County Hospital is a strategic project

The Vodafone Romania Foundation approved 86

about transparency in grant allocation and

with a huge impact in the community. Infant

projects in partnership with 72 NGOs in the areas

funds usage. CSR reporting is already a prior-

mortality in the south-east of Romania is the

of healthcare, education, social services and

ity, and environmental programs minimiz-

highest in the country and three times above

volunteering. Here are some examples. One was

ing companies’ impact are starting to be

the European average. Newborn babies from

the renovation and installation of medical equip-

considered a normal step and not just a legal

the region are treated at Constanta Hospital,

ment at ten blood donation centers in Alba Iulia,

requirement.

www.business-review.eu Business Review | May 2017

14 COVER STORY

BUSINESS ETHICS BECOME CRUCIAL

cel anything that could make

According to a study con-

ing,” says Maier. The message

ducted by EY called, “Is your

went to ten cities nationwide

nonfinancial performance

(Bacau, Iasi, Arad, Resita,

revealing the true value of your

Brasov, Targoviste, Buzau,

business to investors?”, 82

Galati, Craiova and Baia Mare)

percent of institutional inves-

where the company organized

tors say that businesspeople

information marches, and

have ignored social, corporate

with the support of the Regal

governance and environmental

Club of Doctors, Avon offered

risks for a long time now. Some

a free medical test to all 5,000

them postpone breast screen-

marchers. The project ended

81 percent of respondents are now more careful about nonfinancial details, as a result of the recent

with a charitable concert by Romanian singer Loredana, which raised

disclosures about non-conformity and expectations about the envi-

EUR 15,000. The sum was donated to the MAME Association for its

ronment, society and corporate governance. In addition, 89 percent

project Planeta Roz.

of respondents think that an additional focus on these issues can generate a sustainable profit. Last but not least, 68 percent of those

LIDL ROMANIA

canvassed said that their companies’ nonfinancial performances last

Lidl Romania bases its CSR strategy on five main pillars: products,

year played a crucial role in making decisions about investments,

the environment, society, employees and business partners. The

compared with 58 percent in 2015.

construction of the fourth Lidl warehouse in Lugoj, the beginning

“Business ethics are being forced to develop from an idealistic

of the construction of the new Lidl headquarters north of Bucha-

phase to an aware and assumed decision of the top management,

rest, designed to be amongst the most eco-friendly buildings, the

needed to protect the interests of their shareholders on the long

inauguration of a Lidl store with a green roof and the opening of the

term. Plus, shareholders have found that environmental and social

greenest store in Bucharest are some of the retailer’s environmental

issues can be transformed rapidly into huge costs that affect the

achievements.

company in terms of its profits or even validity,” says Raul Pop,

“Our involvement in the community and society is focused on

senior manager of climate change and sustainability services at EY

supporting projects in health, education and protecting the environ-

Romania. The third EY survey about climate change and sustainable

ment,” adds the company’s representative. Paine si maine, a program

services was conducted with 320 institutional investors on the topic

developed in partnership with World Vision Romania, aims to offer

of non-financial reporting.

disadvantaged children the chance of a better future and decrease the school dropout rate. The project is now active in 18 villages in Romania, helping a total of 618 children.

AVON ROMANIA The company focused its efforts last year on supporting Romanian

Another project is Nu mi-e frică, run by the Little People Associa-

women in their battles with breast cancer and domestic violence,

tion, which aims to raise awareness of the importance of psycho-

implementing two major projects: #CancelCancer and In a Rela-

therapeutic assistance for young oncology patients. Some 2,000

tionship. “Through the In a Relationship project we aim to listen

therapeutic kits have been created to ease the first contact with

better to teenagers, by detecting directly from them what makes or

everything that the treatment involves. Last but not least, the com-

destroys their relationships and how in their first relationships they

pany continued its in-store donation campaign to support associa-

resort to violence in the couple,” says Maier.

tions such as Ajungem Mari, The MagiCAMP foundation and World

But the biggest challenge for Avon last year was the #CancelCancer project, as according to public statistics, although Romania is

Vision Romania. “With the help of our customers we donated RON 1,220,000 in 2016,” say officials.

not the European country with the highest incidence of breast cancer, it has the highest level of related mortality. “In partnership with

ING BANK ROMANIA

StarcomMediaVest and Simte Romaneste Association, we managed

“Last year, the lender launched three major projects that are aimed

to get Romanian women to face their fears and advised them to can-

at getting massive investments in the coming years. Two of them are

9

percent

of companies allotted more than EUR 500,000 to their CSR projects in 2016

76

percent

of companies have a CSR strategy/policy

www.business-review.eu Business Review | May 2017

15 - PARTNER CONTENT -

Roșia Buzău 1600, Lidl’s approach “For a better future” in assortment ence for the Romanian customers’ taste. The initiative is part of the company’s commitment to high quality standards. Offering the customers the unique taste of Romanian traditional products is why Lidl constantly develops its relationship with the local producers and maximizes the range of Romanian vegetables and fruits in Piata Lidl.

In 2017, Romanian customers will be able to once again experience the traditional taste of the famous Buzău 1600 tomato.

Known not only for its special flavour and shape, but also for its curative properties, it was chosen out of a selection of four oldtime Romanian varieties, in a tasting session organized last year by Lidl and USAMVB. The cultivating and harvesting processes of the tomato are carried out by three local farm-

E

ver since entering the Romanian market, Lidl has showed an increas-

ers. The first Buzău 1600 tomatoes will be essential components of the project.

The first consists in consultancy sessions, of-

available this summer in all the Lidl stores in Romania. Owning up to the promise that

fered by Lidl specialists and university experts.

Lidl makes to its clients, of offering fresh

ganisation and opinion-maker. These efforts

This means that Romanian farmers benefit from

products every day, this season more than

have now been integrated into a coherent

work visits, conferences on agriculture issues

150 tons of Buzău 1600 tomatoes will bring

structure, “For a better future”, with specific

they face and permanent dialogue to address

back the authentic taste of the traditional

objectives, as CSR has become a fundamen-

all practical problems they might face. One such

products to all Lidl clients.

tal component of the company’s philosophy

meeting was in December 2016, which brought

The revival of the Buzău 1600 variety is

as a whole.

into discussion various topics of interest such

merely the first step of the „Grown in Roma-

as optimum planting and harvesting times, pre-

nia, traditionally Romanian” platform, as the

pillars – assortment, environment, society,

venting pests from ruining the crops and specific

retailer aims to support the local producers’

employees and business partners, which

methods to care for tomatoes and cucumbers.

development and help them become official

bear a paramount importance in the archi-

In 2016, Lidl signed 30 contracts with Romanian

suppliers for the network. One such step has

tecture of a better future. For each of these

fruit and vegetable farmers, some of them facili-

already been made, as Romanian watermel-

categories, Lidl embraces a sustainable

tated by the partnership with the University of

ons will be exported in the Czech Republic

behaviour, one which helps the company

Agronomic Sciences and Veterinary Medicine.

during this year’s season.

ingly responsible behaviour as an or-

The CSR strategy is built upon five main

produce a positive impact.

The second part refers to revitalizing tradi-

These projects, along with many

tional Romanian varieties. The company’s focus

other initiatives stand as examples of

this year is „Cultivat în România, specific

is now on tomatoes, namely the variety called

the company’s commitment to efficiency

românesc” („Grown in Romania, tradition-

Buzău 1600, followed by onions, peppers and

and sustainability in all areas of business.

ally Romanian”), a platform developed in

cabbage. This ambitious initiative is possible

Guided by the motto “For a better future”,

partnership with the University of Agro-

by means of Lidl’s partnership with USAMVB

Lidl has made it its mission to carry out each

nomic Sciences and Veterinary Medicine

and the Research Institutes in Buzău. Thus, the

activity with responsibility for the available

– Bucharest (USAMVB). Dedicated to the

retailer will begin promoting and cultivating

resources, thus preserving the ability of the

Romanian farmers, Lidl’s main objective is to

Romanian varieties that are adapted to the local

society and environment to meet the needs

support the local suppliers, within the two

pedoclimatic conditions and represent a refer-

of future generations.

One of the most important projects for

www.business-review.eu Business Review | May 2017

16 COVER STORY

VALUE OF THE AVERAGE CSR PROJECT IN 2015 IN ROMANIA Over EUR 500,000

1%

EUR 200,000 – 500,000

0%

EUR 100,000 – 200,000

1%

EUR 50,000 – 100,000

In 2015, about half of the respondents to the survey allocated an average budget per project of up to EUR 5,000, while 45 percent of companies had budgets of between EUR 5,000 and 50,000 per project.

Just 2 percent said that they ran CSR projects with an average value of over EUR 100,000.

6%

EUR 10,000 – 50,000

20%

EUR 5,000 – 10,000

25%

Up to EUR 5,000

47%

Source: CSR Trends and Realities in Romania survey, 2016, conducted by EY Romania and CSRmedia.ro. in connection with our field of activity,” says Colisniuc. In the area of financial education, in partnership with Asociatia pentru Relatii Comunitare (ARC), ING Bank developed Banometru, a project that aims to help individuals to become debt-free. Banometru offers free access to workshops with general information about the “golden rules” of a debtless life and one-to-one customized advice. In partnership with Impact Hub, the lender also launched Startarium, a platform that helps entrepreneurs create or develop their business. Last but not least, in partnership with The Institute, ING Bank considers the best projects for urban development through its competition Urbaniada.

ORANGE ROMANIA The majority of Orange Romania’s CSR projects focus on education.

Last year was the second year when the operator organized, in partnership with Salvati Copiii Romania, a series of workshops on how children can use the internet safely within the Scoala Altfel national program. Some 840 students from Bucharest, Cluj and Iasi took part. #SuperCoders, a programming workshop for children between 10 and 13 was another educational project. As Stan says, digital education is a strategic direction for the Orange Foundation. Digitaliada is a pilot project rolled out in ten schools in rural areas over 2016-2017, based on applications and digital games intended to complement the traditional methods used at school. In addition, last year the company added a social component to the Orange Film program through which its customers had the opportunity to go to a movie with disadvantaged children. The campaign took place in five cities in partnership with Salvati Copiii Romania. Last but not least, Saptamana Voluntariatului is an initiative that combines three strategic pillars for Orange: volunteering, digital inclusion and education.

FIGURES: Data from the CSR Trends and Realities in Romania study, conducted by EY Romania and CSRmedia.ro. Data refer to the companies included in the study.

51

percent

of companies had internal meetings about the European directive on non-financial reporting and its impact on the company

TRENDS TO WATCH ON THE LOCAL CSR MARKET Companies add to their brand or product campaign a social component and initiatives based on cause-related marketing to support different causes; Consumers are more and more informed and notice brands immediately when they are suspicious about companies’ practices.

They therefore persuade large players to revise some practices to embrace social responsibility; CSR will become a mainstream business practice which will lead to competition in this area; CSR projects and the strategies behind them will become more and more personalized in terms of business particularities and the impact that the company seeks to achieve; An increasing number of firms will adopt a comprehensive CSR model that addresses every business process and fewer firms will limit themselves to one-off investments in society; More companies are making the transition from CSR projects to initiatives that embed sustainable principles in their daily business; Fewer companies are rolling out sporadic philanthropic projects, focusing instead on supporting projects that are close to their field of activity; We will see increased dialogue between companies and their stakeholders, as a relevant CSR project is one that meet the latter’s needs; The public want to see that a company is doing something apart from just offering its products and services; Social responsibility will become transversal within a company and social involvement initiatives will involve the contribution of more departments.

NOTE: The companies and CSR projects/programs included in this article represent only a selection. The article is not a comprehensive report on the Romanian CSR market.

64

percent

of companies measure the impact of their CSR projects in the community

www.business-review.eu Business Review | May 2017

17 - ADVERTORIAL -

Romanian real estate’s key word? Evolution This is an ongoing, real time story seen through the eyes of an expat & foreign investor and a professional with strong faith in Romania and its future.

By Johan Rogiers & Horia Chioseaua, Millstone Developments. positioning on the land and materials, so that later on we can guarantee the best conditions in terms of lighting, heating, space management and so on, all for healthy and prosperous living and work. We believe that the spaces influence our overall quality of life and we are fully committed to creating the best conditions for the ones that pick Millstone’s projects.

Johan Rogiers concludes: We know that the road is long, but all I have seen in my over 17 years on the local market can be defined through one word: evolution. I have witnessed the transformation of the city, which is now absolutely ready for the next It was the early 2000s when I first set my eyes

dedicated to young families in search of a true

big step. Bucharest is prepared for what we

on Romania, remembers Mr. Rogiers, – the

home: spacious, luminous, inside a community,

have to offer, to unravel its full potential

potential was huge, development was in its

with easy access, great outdoor space and

and start competing with other European

early stages, professionals and companies

premium amenities. Flanders Residences will

capitals.

were just getting to know the lay of the land.

be created for those yearning for comfort and

This is when it all started, my adventurous

exclusivity, without sacrificing space or location.

We are eager to see what the next 15 years bring in terms of real estate develop-

At the same time, we focus on our office

ment and we are excited to meet the first

exceptional people, bureaucracy and new

project. Close to the Otopeni International

families to call Flanders Residences their

standards for old ways. It is an ongoing proj-

Airport, Skybox, will be a great opportunity for

home.

ect, working in Romania, but it is more and

businesses were the proximity to the airport is

more fulfilling every single day. After seeing

a real added value. The development will focus

Johan Rogiers is the Founding Partner of

it all, we plan big for the years to come!

on efficiency and international accessibility,

Millstone Developments. He is a senior

with creative architectural solutions and design.

strategic Management & Board member in

a consequence and a dream. As a conse-

This project will become a true “window to the

various organizations activating in the real

quence, because seeing the evolution of the

world”, as we believe a qualitative office building

estate industry and related services, with an

market and the standard of the buildings, we

close to an international airport is paramount

expertise of over 17 years on the Romanian

decided that we can do more and that Bu-

for a city’s strong development and its ties to

market in companies such as Liebrecht &

charest deserves better. As a dream, because

external partners.

Wood Group, Fashion House Group SRL, West

trip, with ups and downs, great projects,

Millstone Developments started as

I strongly believe that green building is the

The red line between these two projects

Park Retail and Wizmo.ro. Horia Chioseaua,

future and I fully intend to operate accord-

is the mission of our company and the values

Founding Partner & Managing Director, is

ing to these principles.

that guide us in our day to day work, believes

an experienced professional in real estate

Mr. Chioseaua ads: Together with our

Mr. Rogiers. Environmental friendly is not just a

development, with a solid background in

partners and investors, we aim to combine

marketing gimmick, but it’s our core concern. We

law and expertise as senior lawyer in major

style, comfort and quality, starting with two

have chosen the BREEM system and we plan to

companies. The third partner of Millstone

projects in the Bucharest - Ilfov area. The

fully follow its principles, thus giving Bucharest

Developments is Christian Dumolin. At the

first one is Flanders Residences, located on

“healthy” developments, both for the city and

moment, the company operates in Bucharest

a lush green area in the northern part of the

for the people that live or work there. With

and will start working on its first 2 projects,

capital. We will break ground soon and we

this in mind we have chosen the best possible

with an aggregate market value of approxi-

plan to deliver a first phase of 44 apartments

properties and we are currently focusing on

mately 34 mil. Euro.

www.business-review.eu Business Review | May 2017

18 HR

Public sector wage bill rattles business community Parliament is set to vote on a bill that would bring in pay grades for public workers, which could see their salaries increase by 56 percent on average by 2021.

the highest allocation ever made in Romania

By Simona Bazavan

cent share forecast for 2022 would represent

and above the European average, Dumitru told Agerpres.

To put things into perspective, the 12 perabout half the state’s collected revenues, which would mean there would be little money left for anything else, he pointed out.

Moreover, the comparison with the 10 percent EU average is not relevant given that in Romania collected revenues to the state budget represent only 25 percent of GDP, against a 40 percent share in the EU. “Our main concern is the budgetary impact. We must make it very clear: wage increases through emergency ordinances are

The draft public sector wage bill is backed by the ruling PSD and its allies, the ALDE

T

an illusion. Living standards cannot increase based on a discretionary decision. Wage increases are possible only with economic

he government has allocated RON

public workers will see their monthly salary

growth or productivity increases,” Dumitru

32 billion to increase public sector

cut, according to the governing coalition. The

previously told Hotnews.ro.

pay by 2021 through a bill that is also

first to enjoy a pay rise from July 1 will be

PM Sorin Grindeanu has addressed the

supposed to balance wages between differ-

military and police personnel and teachers.

business community’s concerns about the

ent categories of public workers based on a

Public administration workers and health-

public sector wage hikes by saying that the

unitary set of pay grades. The draft public

care staff will also see their wages increase.

private sector should not be worried and

sector wage bill is backed by the ruling Social

Except for doctors, whose earnings will go up

that it too has been benefitting from sup-

Democratic Party (PSD) and its allies, the

by 50 percent next year, the increases will be

port measures since 2014, which have had

Alliance of Liberals and Democrats (ALDE). It

made gradually until 2021, by when public

a similar impact. These include all the fiscal

was supposed to be launched for debate and

sector pay will have risen by an average of 56

easing measures such the VAT cut between

a final vote in Parliament in April, but by the

percent, said Vasilescu.

2014 and 2015, Grindeanu said during a press

time BR went to press, the initial deadline had been postponed indefinitely.

While bringing all public workers under the same payment rules is welcome and some

conference in Bistrita-Nasaud, according to Mediafax.

“This unitary pay law and the principles

wage increases are needed, especially in areas

Given that the PSD and its allies hold a

behind it shouldn’t be a surprise to anyone

such as healthcare and education, the private

majority, the draft should pass without any

as these were included in the government

sector has expressed worries about the gov-

surprises when it is eventually voted on in

manifesto. We have allocated RON 32 billion

ernment’s capacity to actually come up with

Parliament. Its coming into force, however,

to increasing public sector pay over the next

the money to raise pay in a sustainable way

could be delayed by the president, Klaus

four years, meaning an average increase of 56

for the rest of the economy.

Iohannis, who would finally sign it into law.

According to the president of the Fiscal

He has the option to send it back to Parlia-

Council, Ionut Dumitru, the budgetary impact

ment to be reexamined and later challenge

of the law has been significantly underes-

it in the Constitutional Court. The PSD has

complicated and entangled payment system

timated. Public wages now represent 8.4

already anticipated this scenario, as Olguta

which many unions say has led to injustices

percent of GDP, and should the law come into

has previously said that the government will

over the years. Wages should go up, especially

force, forecasts are that it will increase to 10

have enough time to restart the procedure in

for junior employees, while some senior

percent in 2020 and 12 percent in 2022, by far

Parliament should it happen.

percent over the period,” said labor minister Lia Olguta Vasilescu.

The law is meant to bring order to a

www.business-review.eu Business Review | May 2017

20 BREXIT

Brexit blues bring keener focus on Europe’s future With the Brexit process officially triggered at the end of March and the plan for a multi-speed Europe taking shape as the favored solution to the present EU crisis, Romania is looking ahead at a shifting European environment.

can be outlined. The good news is that when it comes to Romania, the immediate impact Brexit developments might have on the local economy look muted, say pundits.

One argument is the timing. Given the different standpoints the two parties have taken

By Simona Bazavan

on crucial negotiation issues, two years seem a rather short window to come to an agreement, Roland Teufel, partner with Ensight Management Consulting, tells BR. “Therefore, I do not expect any direct consequences over the next two years for Romania,” he adds.

Considering the limited level of bilateral trade between Romania and the UK, roughly EUR 4 billion in 2015, PwC expects Brexit to have only a moderate impact on the Romanian economy in the absence of a future Free Trade Agreement (FTA) between the UK

Photo: European Commission

and the EU. “However, given that Romanian exports are closely interconnected to the exports of several large European economies – the likes of Germany, Italy and France – failure to sign such an FTA in due course, by the completion of the Brexit procedure, could have more serious consequences on the The build-up to the signing of Article 50 has hinted at a bumpy road ahead, with trade negotiations taking center stage

T

Romanian economy,” Ionut Simion, country managing partner of PwC Romania, tells BR, adding that there are other aspects that should be taken into consideration as well.

here is now theoretically less than

the EU by the time the two-year Article 50

two years left for the UK and the EU to

process has concluded. Tensions hit a high

settle the terms of their divorce before

with the handing in of the formal letter that

the EU budget, with a yearly net contribution

Brexit comes into effect. This comes after the

notified the EU of Britain’s intention to leave,

of roughly GBP 10 billion, according to CNN

British prime minister, Theresa May, officially

as EU officials accused May of using security

data. Its withdrawal from the EU is likely to

triggered the process by activating Article 50

concerns as a bargaining chip in trade talks.

lead to a reduction of the EU budget, which in

at the end of March. Both the UK and the EU

Good news came by mid-April as the British

turn could impact the structural funds avail-

find themselves in unchartered waters, trying

PM signaled what some called a willingness to

able for Romania, adds Simion.

to sort out a process with strong political and

compromise on previous hard-line positions.

economic consequences for both parties.

However, things took another dramatic

The UK is one of the 11 net contributors to

Thirdly, there is the matter of the EU nationals working and living in the UK, whose

The build-up to the signing of Article 50 has

turn on April 18, when May announced

fate remains uncertain. There are currently

hinted at a bumpy road ahead, with trade

plans for a snap general election on June 8

over 230,000 Romanians across the Chan-

negotiations taking center stage. EU leaders

as a way to counter what she characterized

nel, making up the third largest group of EU

remain adamant that the UK would be able

as the opposition’s political road-blocking

citizens after the Irish and Poles, according to

to sign a trade deal with Brussels only after

on Brexit. While it is too early to take a soft

Bloomberg data. “It is important for Romania

it had formally left the EU. May, on the other

Brexit for granted and even to fully assess

that the future agreement between the EU

hand, has been firm that the UK can reach an

the impact the whole process might have on

and the UK protects the rights of all EU citi-

agreement about its future partnership with

the EU economy, some possible scenarios

zens to access the UK labor market, particu-

www.business-review.eu Business Review | May 2017

BREXIT 21

larly those already living and working there,”

their activities, resulting in a

adds the PwC Romania head. However, this

negative impact on the local

particular cloud could have a silver lining,

economy.

notes Simion: as the British government will almost undoubtedly make it harder for EU

WHAT NEXT AFTER BREXIT?

nationals to work and live in the country,

As Brexit unravels, the ques-

a number of Romanians could decide to

tion remains of what will

return home. “This could be a rather good

follow for the EU itself. The

side effect for Romania, given the shortage

union seems to be moving

of skilled labor force in several sectors of the

from one crisis to the next,

local economy, but will also probably lead to

while battling tepid eco-

a decrease in foreign remittances to Romania

nomic growth and the rise of Euroscepticism.

cal and economic differences with core EU

from the expat community in the UK,” he

Reaching consensus among the soon to be

member states are still substantial, and you

outlines.

27 member states seems more difficult than

cannot slow down stronger countries which have done their homework,” argues Teufel.

Brexit could also bring about other op-

ever, making it clear that a change of course

portunities for the Romanian economy. “The

is needed in order to preserve the European

impact will depend on what measures are

project.

taken by Romanian authorities and busi-

“The federalist project of a more integrated Europe is not bad in itself, but could be

The 60th anniversary of the Rome Treaties

detrimental for Romania if our country is not

nesses,” Madalina Racovitan, tax partner

this March therefore marked more than a

taken into consideration as a ‘core’ country

at KPMG, tells BR. In industries such as

reason to celebrate, but also a turning point

for such a deeply integrated EU. It is in our

financial services, the relocation of certain

of sorts. France, Germany, Italy and Spain

interest to strengthen ties with the core EU

activities and related workers to continental

are backing the idea of a multi-speed Europe

countries and make sure that our voice is

Europe will be necessary in order to optimize

built around a stronger integrated core made

heard too in discussions about the future of

business operations, she says. “Given the

up of the main economies in the Eurozone,

Europe,” adds Simion.

two-year timeframe available for negotia-

surrounded by a less integrated outer layer.

Officially, Romania is among the countries

tions, such relocations or reorganizations are

What EU leaders and Brussels have in mind

that oppose the idea of a multi-speed Europe,

likely to occur in the near future, to benefit

is a way for a small group of countries to go

with the president, Klaus Iohannis, arguing

from the existing EU legislation still in force.

forward in such areas as defense and taxation,

that there was no explicit reference to this in

This presents an opportunity for other EU member states and

without having to wait for all, using the treaty’s tools that allow

Western Europe countries

enhanced co-operation,

appear to be on the

rather than a true

the ensuing Rome Declaration.

On one hand, the statement signed by the 27 heads of state stresses the message of unity and solidarity by declaring the Union “undivided and indivisible”, but on the

right foot to welcome

multi-speed, multi-tier

these businesses and

Europe, which would

other it also hints at a future of differentiated

individuals,” says

be a far more ambi-

integration. “We will act together, at different

Racovitan.

tious project, argues

paces and intensity where necessary, while

The Economist.

moving in the same direction, as we have

Countries in Central and Eastern Europe

The idea itself is not

too are ready to take

only not new, but many

advantage of this situation, with Poland, for example, having already taken measures

pundits argue it has been a reality for years now, as not all members are in the Schengen

done in the past, in line with the Treaties and keeping the door open to those who want to join later,” reads the declaration.

With or without an explicit reference to what the EU’s future strategy will be, it is

to increase its attractiveness to investors.

border-free zone, and only 19 of the 28 use

clear that the current state of affairs needs to

Similar steps could be taken by the Romanian

the euro. Its supporters argue that it would

change in order to avoid potential disintegra-

authorities to attract investors, although

enable the EU to deal with present tensions

tion. A multi-speed Europe is shaping up to

apart from the business and tax environment,

and move forward. Yet countries in Central

be the most likely solution to this challenge.

there are other aspects to be factored in when

and Eastern Europe in particular are wary of

Judging from the present discourse of local

deciding to invest in a certain country, such

the consequences of being relegated to the

leaders, Romania already seems willing to

as infrastructure, cost and structure of the

bloc’s second tier.

relegate itself to the status of a second-tier

workforce, plus the ease of doing business,

Opinions on how this will affect Romania

member state. This is the first thing that

she points out. The downside to this could be

are split. “I believe that a multi-speed Europe

needs to change before leaders come up with

that certain UK-based companies with subsid-

could be positive for Romania, since it may

a coherent plan for the country’s place in a

iaries in Romania may decide to restructure

create a stronger need for real reforms. Politi-

changing European environment.

www.business-review.eu Business Review | May 2017

22 INTERVIEW

Adobe Romania to hire over 50 engineers for Bucharest site With a turnover of USD 28 million, last year brought growth for Adobe Romania, which hired around 80 employees for tech positions. In 2017, the company plans to hire more than 50 cloud and big data engineers, reaching almost 500 people at its Bucharest site, its largest R&D center in the EMEA region.

By Georgeta Gheorghe ists, who should have strong expertise and

the best specialists, and recruit them to relo-

experience in computer science, as well as

cate abroad.”

important soft skills, such as an open mind,

According to Radu, senior positions are the

curiosity, product and customer focus. Also,

hardest to fill. “We need the best technical

considering the strategic partnership with

experts, but with a certain view of their work.

Microsoft for its cloud services, we are look-

The products we work on are in constant

ing for engineers with experience in Microsoft

development, so we need our engineers to

Azure,” Radu told BR.

drive development with new solutions and a creative approach to meet clients’ demands.”

DEVELOPING PRODUCTS FOR A GLOBAL AUDIENCE

HARD TO HIRE FOR DIVERSITY

“As an R&D campus, we don’t do basic cus-

Diversity and gender balance are two key fac-

tomer service, but software development for

tors driving innovation in a highly competi-

top products that win awards,” said the Adobe

tive team, and represent a very important

head. “Therefore, we are looking for talents

part of the company’s talent strategy, Radu

committed to working on key products on

said. However, he added, “It’s hard enough

Adobe’s homepage. With them comes joy, but

to hire and even harder to hire for diversity,

also responsibility. For example, we are look-

a challenge within a challenge. We want to

ne of the two flagship products

ing for site reliability engineers for Adobe’s

show that women in tech are not just very

developed at Adobe’s Bucharest site

Data Platform on top of Microsoft Azure, as

good specialists, on a par with their male

is One’s Primetime Authentication,

well as big data engineers for our Analytics

colleagues, but with their mindset, manage

Cloud.”

to bring a different touch to high-performing

Cris Radu, Adobe Romania

O

developed exclusively in Romania for the me-

teams.”

dia and entertainment market, which won an Emmy for technology and has a market share

Last year the share of women in Adobe’s

of 98 percent in the United States. The sec-

FINDING STAFF, A MAJOR CHALLENGE FOR IT PLAYERS

Bucharest office reached 27 percent, close

ond, Adobe Experience Manager, the market

“Adobe Romania was voted the best com-

to the 29 percent Adobe average in the US,

leader in data management, is an exponent

pany to work for three years in a row in an

where the market average is about 20 percent.

of Adobe’s new cloud and big data DNA, with

independent study conducted by AON Ro-

“However, as we know that well-balanced

more than 15 billion transactions processed

mania. However, finding the right employees

teams tend to be more effective, creative and

daily and more than 1 petabyte of data to

remains our biggest challenge, as there is still

successful overall, it is our desire to constant-

handle, entirely in the public cloud.

a deficit of IT talent in Romania, especially in

ly raise the percentage. As for how we encour-

R&D,” said Radu.

age the gender balance, I’d say we do it more

According to Cris Radu, Director of Engineering and Site Leader, Adobe Romania,

Firstly, there is an imbalance between

for the market, than within the company.

engineering and operations positions are

supply and demand, he argued, although

We have partnerships with the Polytechnic

available in cloud and big data, two areas of

supply is almost constant. “We target the top

University for programs to attract women to

knowledge the company is most interested in,

5 percent. Demand comes from all sides of

IT engineering. We also support Codette, an

as the local campus has developed massively

business: multinational companies open-

organization that helps women programmers

on the SaaS (software as a service) side of

ing new offices in Romania, local players,

through workshops, online mentoring, con-

Adobe – Marketing Cloud and Creative Cloud.

start-ups and our direct competition: global

ferences and presentations, hosting meet-up

“Half of the openings are for senior special-

companies that target the same top 5 percent,

events every two months.”

www.business-review.eu Business Review | May 2017

24 DIGITAL

Companies and cities navigate digitalization challenges and opportunities For private firms and the public sector alike, the road to digitalization is dotted with challenges, from mentalities to raising funds to support projects, but, more than that, with business opportunities, especially when it comes to public-private partnerships, such as those designed to create smart cities.

By Georgeta Gheorghe driving force. “The potential to influence via this channel is very big. We are a bank, but we want to become a digital company. One thing we notice is that, if we build something on this digital channel, people come over.

They buy directly the products we put up there,” said Vlad Stanilescu, ING Bank’s head of digital platform development. Moreover, more than 90 percent of interactions with the bank’s clients are conducted via digital channels, he added. Despite that, there is also progress to be made with bank customers. According to Stanilescu, among clients who use mobile banking services, the most common operation is balance checking.

STATE MUST PLAY ACTIVE ROLE IN DIGITALIZATION Public-private partnerships could bring digitalization forward

A

According to akamai’s state of the internet Q1 2016 report, Romania leads the European region when it comes to average peak con-

ccording to Adrian Floarea, certSIGN

are bound more than others by industry

nection speeds, at 82.4 Mbps. Moreover, the

director general, a major obstacle

rules when it comes to the speed of adopt-

country was ninth in terms of average Euro-

to digitalization is mentality. “We

ing technology and incorporating digitaliza-

pean connection speeds, and 14th globally,

are trying to provide business models that

tion into their operations. Banking industry

and marked a 4.2 percent increase in internet

no longer require the use of paper, based on

representatives argue that the very nature of

connections that met the 4 Mbps broadband

the ‘go paperless’ concept. From our point of

lenders’ activity, based on strict regulations

speed threshold, coming tenth in the Global

view, the main issue is changing the men-

and careful risk management, prevents them

4 Mbps broadband adoption raking. Accord-

talities of all a company’s employees. In this

from adopting the latest digitalization trends.

ing to data provided by Eurostat in February

process nobody is at fault: this is the mental-

“Banks are highly regulated because they are

2017, 71 percent of internet users in Romania

ity; this is how things have been so far and it

very big. That is why risks of blockages or

went online daily. These are good premises

is difficult to make the change,” he said earlier

fraud have immediate effect and a very big

for increasing access to digital public services.

this month. However, Floarea is confident

impact. As a banker, you are somewhat bound

Speaking about the efforts of Romania’s pub-

things will move in the right direction,

by regulations, because banks do not have

lic sector to digitalize some of its functions,

although perhaps not within a predictable

the freedom of the research engineer who

the minister of communications, Augustin

timeframe. “We are on the right path, but

is not tied up by laws,” said Florin Danescu,

Jianu, said that interaction with the state is a

there is a long way to go until the number of

executive president of the Romanian Banking

basic need, which the latter must make easier.

companies that digitalize their businesses will

Association (ARB).

According to the minister, the systems built

grow,” he added.

However, players argue that some sectors

Nevertheless, the public is very responsive to digital initiatives, and could be a

so far have not answered any of the public needs.

www.business-review.eu Business Review | May 2017

DIGITAL 25

“Not all of the systems are terrible. Some

field is clear, Ionescu said, adding that he be-

bring to cities. Also, more should be done to

of them work, and we must see how we can

lieves that this year will see many smart city

raise awareness surrounding the business op-

use them and make them more user friendly,”

projects in Romania, and that the end of the

portunities such projects create for the local

said Jianu, acknowledging that the state has

year will bring large-scale projects. According

community.

a significant role to play. “The market cannot

to him, Romania should strive to integrate

move at the pace digital technology offers un-

this type of projects in order to reap the

underlying problem surrounding the funding

less the state also makes a change.” He men-

benefits. “Although we have been speaking

of the type of projects the Romanian authori-

tioned two future initiatives: alongside the

about smart cities in Romania for two years

ties should address. So far, smart city pilot

launch of a ‘digital alphabetization’ program

now, and there are already concrete projects,

programs have been funded mainly by private

aimed at the general public, the ministry he

Romania hasn’t yet reached the integration

companies, he commented, and urged the

heads will create an Agency for Cloud and

stage,” said Ionescu. According to him, the

authorities to use their resources to attract al-

Digital Services.

main benefits integrated smart city projects

ternative funding, for instance EU resources.

bring come from their functioning together.

Philips Lighting’s CEE general manager,

Moreover, according to Ionescu, there is an

There has been progress in attracting funding, however, argued Nicolaie Moldovan,

SMART CITIES, A BEACON FOR PUBLIC-PRIVATE DIGITALIZATION PARTNERSHIPS

Bogdan Balaci, also spoke of increased inte-

city manager at the City Hall in Alba Iulia, the

Public-private partnerships (PPPs) are more

gration and called for lighting in public and

first smart city in Romania, developed with

efficient in bringing digitalization forward,

private spaces to connect to IT networks and

Orange Romania. According to Moldovan,

Jianu argued, as private operators are more

telecommunications. “Once lighting systems,

despite having started small, the fundraising

interested in a project when there is a finan-

such as street lighting, facade lighting, those

team at Alba Iulia City Hall currently numbers

cial contribution. Telekom Romania and Phil-

for the industrial and retail sector and office

34 people, 7 of whom are working to attract

ips representatives speak of plans to develop

spaces as well as for households, connect to

funds for the smart city project.

initiatives with local authorities.

the IT and telecommunications networks,

Another incentive for introducing smart

they will slowly become smarter,” he com-

technologies to cities is the fact that the funds

mented.

invested can be recovered in under ten years.

According to Razvan Ionescu, segment business marketing director at Telekom Romania, the company is currently in talks with

Currently, he argued, there is a lack of

According to Philips’ Balaci, the cost of imple-

the local authorities in several cities around

awareness among local authorities as well

menting smart lighting systems in cities, for

the country interested in implementing the

as at central authority level regarding the

instance, can be recovered, through the sav-

smart city concept. The firm’s interest in this

benefits integrated smart city projects can

ings it brings, over five to seven years.

www.business-review.eu Business Review | May 2017

26 INTERVIEW

How medical subscriptions help heal an ailing system Fady Chreih, CEO of the REGINA MARIA, private healthcare network, tells Business Review about the importance of prevention and emphasizes the role of medical subscriptions in the development of the local healthcare system.

By Anda Sebesi How does medical subscription work in comparison with the insurance, and what are their main benefits?

for SMEs, startups and individuals, including

relies on the infrastructure developed by

children.

private healthcare providers, since these pro-

Insurance and subscriptions are complemen-

unconditional access to primary care and,

tary and have different roles on the three

also, a direct relationship with the private

levels of the medical system: continuous

healthcare provider, with ongoing patient

al and financial burden on public hospitals

education and prevention (through medical

monitoring by the GP, through an electronic

(and, consequently, on the budget of the

subscription), evaluating and solving minor

medical record.

National Health Insurance House), by allow-

Third, it is about ensuring continuous and

viders are the only ones that actually invest in the Romanian healthcare system.

Last but not least, they ease the operation-

medical situations (covered by subscription

Fourth, medical subscriptions contribute

ing the subscriber to access primary care,

and with the possibility of claiming on insur-

to the development of medical infrastructure,

included unconditionally in their medical

ance or not), and more serious problems requiring surgery and/or hospitalization (where the patient claims on medical insurance).

through the profit reinvested by private healthcare providers. They are an

subscription package.

In Romania, there is currently a reverse investment pyramid to those in other EU states:

important driver in

more money is spent on hospitalization and

the following advantages: first, the pre-

the expansion and

less on prevention. Therefore, local life ex-

vention and early detection of serious

modernization of

pectancy is seven to eight years lower than in

medical issues. In the long term, this will

the national medical

Western European countries. Romanians treat

help increase the overall health and life

network, filling the

more than they prevent. They go to the doctor

expectancy of the public. Figures reported

gap left by the public

when they are already sick, rather than having

by companies in Europe and the US show

system. Even health

regular medical checkups that could prevent

In brief, medical subscriptions have

that healthcare and wellbeing programs aimed at employees have a significant impact on

insurance

severe medical conditions, which also place a great burden on public hospitals.

On the other side, insurance is a financial

reducing costs associated

instrument that covers a potential risk: the

with medical leave, as well

patient uses it mostly in the event of serious

as increasing productivity

medical problems that require surgery and/or

levels and staff retention.

hospitalization, involving high medical costs.

The ROI is approximately three to one.

Second, they can be

What is the next step in the development of prevention packages in Romania?

customized to respond

Regina Maria was the first to introduce the

to specific industry

concept of medical subscriptions in Romania,

needs (for example,

21 years ago. Since then it has been the engine

employees in the au-

leading the development of the healthcare

tomotive industry have

market.

different health issues

Corporate subscriptions now number more

than those in banking

than 1 million. Over 400,000 of them are in

or IT). Regina Maria has

Regina Maria’s portfolio, and our forecast

developed personalized

for this business segment is an increase of 15

medical subscriptions

percent in 2017.

www.business-review.eu Business Review | May 2017

The trend focuses on further customiza-

INTERVIEW 27 means better health and quality of life.

respect their dignity. And I am not referring only to their salaries, but also to a decent

tion of these medical products, depending

work environment in which they can improve

We have demand from smaller companies

More private medical networks are focusing their investments on expansion. Is there any room for further development on the local market?

and entrepreneurial businesses, where the

There is plenty of room for the expansion of

volved in keeping doctors in the local system,

penetration of medical subscriptions is still

private medical networks, as (currently) a

by offering a solid alternative to leaving the

very low. Regina Maria anticipated this trend

quarter of Romanians do not have sufficient

country.

and introduced last year the first prevention

access to basic healthcare services. And this

packages for SMEs and startups.

is not only a business strategy, but a social

and theoretical training of doctors, at the

on the customer’s profile and their field of activity. Another logical step to support the evolution is to go beyond large corporations.

themselves professionally. Regina Maria, as well as other private providers, has tried to respect these needs and has been actively in-

Moreover, we contribute to the practical

need. We are making efforts to cover the gaps

highest level. At Ponderas Academic Hospi-

How have prevention packages influenced the development of the Romanian healthcare system?

where the public system has delayed invest-

tal we have the only private training center

ments in new medical units or staff.

in Romania for laparoscopic surgery, which

It is a simple circuit. Growing demand for

numbers of inhabitants where demand for

medical subscriptions in the past 20 years

services is higher. Regina Maria is planning its

has brought profit to the private healthcare

biggest investment outside Bucharest: at the

in our network and we are taking all measures

providers which, in return, have reinvested

end of this year, we will open the first private

to increase this number and to keep the best

this profit in medical infrastructure – either

hospital in Cluj-Napoca, a EUR 15 million

specialists in the country.

Our first stop was communities with larger

serves not only Romanian, but also foreign doctors.

At present, we have 1,700 doctors working

investment.

by opening new clinics and hospitals

Almost all

nationwide, or by modernizing

large cities

existing ones and buying

in the

state-of-the-art equipment, training medical staff and aligning overall medical activity to European standards.

More and more complex medical procedures are premiering in Romania.

What lies behind this and how can Romania encourage innovation in medicine?

The road to excel-

In fact, private

lence is paved with the

providers are the only

experience of the best country

ones who have contrib-

are home to

uted to the development

private medical provid-

of the Romanian health system.

specialists helped by stateof-the-art medical equipment. In a word: investment, in

Hundreds of millions of euros have been

ers and patients’ trust is increasing every

human resources and their training, as well as

invested by Regina Maria and other providers

year. A study carried out by GfK for Regina

in technology. At Regina Maria we are trying

in new openings and medical equipment. We

Maria indicates that 64 percent of inhabitants

to build a long-term business strategy in such

have also supported healthcare professionals

from these cities used our services in the past

a manner that our investments materialize

(HCPs), by creating a proper environment for

year.

in substantial benefits for patients. And it is

them and convincing them to stay and work

By introducing fiscal deductibility for

fulfilling when our efforts are acknowledged:

medical subscriptions, we expect to make the

we have the only hospitals in Romania with

next step towards smaller towns. Demand

international accreditations – Ponderas Aca-

analyze the investments made by Regina

will grow and healthcare services will de-

demic Hospital and Baneasa Hospital.

Maria so far. In 2017, over EUR 2 million was

velop accordingly.

in their home country.

To understand the proportions, you can

invested in Q1 and we intend to continue our expansion this year. We are looking at a sim-

This allows us to attract the medical elite.

Among our collaborators are some of the most respected surgeons in Romania, who

ple equation, directly proportional growth:

How can the current exodus of Romanian doctors abroad be stopped?

more medical subscriptions bring more pri-

Indeed, since the liberalization of the labor

system because here they have the necessary

vate hospitals and clinics to the country. We

market in Europe, the public system was

infrastructure to perform complex surgery.

are a constant partner for the public system:

powerless in the face of a massive exodus of

Last year we invested millions of euros in

medical subscriptions reduce the burden on

doctors: over 40,000 have left Romania in the

equipping the existing units and recently we

the public system, and moreover, prevention

last ten years, according to data provided by

opened the Central Laboratory, the biggest

packages increase the level of medical educa-

the Ministry of Health. In order to stop this

investment in medical lab equipment in Ro-

tion in Romania, which, in the long term,

phenomenon, we must do one simple thing:

mania, with a value of EUR 3.5 million.

have chosen to work in the private medical

www.business-review.eu Business Review | May 2017

28 MONEY

Romania’s planned EUR 10 billion wealth fund raises questions of transparency, investment policy As the center-left government led by PM Sorin Grindeanu sticks to its plans to launch Romania’s first sovereign wealth fund, strong control mechanisms will have to be put in place to make sure that public money is not wasted. The question on everybody’s lips is who will manage the Sovereign Fund for Development and Investments (FSDI), which should reach around EUR 10 billion in assets in the next four years.

By Ovidiu Posirca

Loredana Van de Waart, Gruia Dufaut

L

Serban Paslaru, Tuca Zbarcea & Asociatii

PM Sorin Grindeanu

egal experts have suggested that the

official discussions, will make strategic joint

initiative aimed at improving infrastructure

state should recruit private managers

ventures to finance large investment projects

in the country. We know that the Romanian

to head the fund, which will be fully

in Romania. We will also start to build plants

authorities are working on this initiative.

and production capacities in areas where they

We have been contacted in the context of a

owned by the Ministry of the Economy.

didn’t exist,” Dragnea told public broadcaster

comprehensive stakeholders’ consultation

and since the start of 2017, the head of the

SRR in early February. Since then, the govern-

exercise that we understand will start soon.

Social Democratic Party (PSD), Liviu Dragnea,

ment has created a commission tasked with

Before that takes place we cannot comment

has made only brief comments about the

setting up the fund.

on the structure of the fund as we do not

The design of the fund remains a mystery,

investment strategy of the FSDI.

The government has announced that it will

know the details,” Matteo Patrone, regional

seek the assistance of international financial

director for Romania & Bulgaria at the EBRD,

holder. It will not sell any shares, because

institutions such as the International Mon-

told BR.

these are strategic companies. In addition,

etary Fund (IMF) and the European Bank for

as happens in other parts of the world, this

Reconstruction and Development (EBRD) to

fund, the Fund for Large Investments and

design the fund.

“The state will remain a 100 percent share-

international banks, with which we have had

“We certainly welcome in principle any

SOVEREIGN FUND TO BE USED FOR PUBLIC INVESTMENTS The plan of the ruling coalition is to use the

www.business-review.eu Business Review | May 2017

MONEY 29

FSDI as a financing source for the construction of new hospitals and highways, and the head of the PSD suggested that the money will contribute to the reindustrialization of the country.

When the fund was first announced during the political campaign for the last general elections, the PSD said that the initial funding of the FSDI would come from dividends paid by profitable state-owned companies and from

vestment from the fund’s perspective, except,

The FP is currently managed by American in-

the sale of assets, such as hotels, that are still

maybe, those projects generating enough toll

vestment firm Franklin Templeton. The FP’s

in public hands. Moreover, the fund would

or similar revenues,” Serban Paslaru, partner

manager has been one of the main backers of

issue bonds that would target retail buyers in

at law firm Tuca Zbarcea & Asociatii, told BR.

the implementation of corporate governance

Romania.

He added that the purpose of the fund has to

principles in companies controlled by the

be clarified by the government.

state and called for the listing of these firms

“The establishment of a national sovereign

on the local stock exchange. The fund has a

development and investment fund could be a

net asset value of EUR 2.6 billion and is man-

there are funds established for the special

QUESTIONS ABOUT THE FUTURE MANAGEMENT OF THE FSDI

purpose of developing investments at na-

Whomever is appointed to head the fund will

and Greg Konieczny (portfolio manager).

tional level. However, one must be aware that

come under increased scrutiny from the pri-

this is not a guarantee of success or necessar-

vate sector, the media and even politicians,

ily a providential choice. There are still many

as the transparency of public spending has re-

investment resources that the state fails to

mained one of the authorities’ main challeng-

POLE POSITION: WHAT ROMANIA CAN LEARN FROM THE POLISH FUND EXPERIENCE

use properly, and European funds are proof of

es. And the government has yet to announce

From the public statements regarding the

this inability,” Loredana Van de Waart, partner

its vision for the leadership of the fund. It is

FSDI, it seems that it might bear some

at law firm Gruia Dufaut, told BR.

not clear if the FSDI will have a director ap-

similarities to the Polish Development Fund

solution for the country’s development, and

She added that going forward, the state

aged by Johan Meyer (co-portfolio manager)

pointed directly by the state or if there will be

(PFR). The latter was set up last year as a

has to provide guarantees that the fund’s re-

a recruitment process outsourced to private

venture capital platform with more than EUR

sources will be used efficiently and the money

headhunting firms.

600 million of financing available. The PFR

will go into the real economy.

“Let us not forget that we currently face

“In addition, knowing the administrative

was used to partially finance upgrade works

weakness in Romania, private management,

at a sea container terminal and additional

two vulnerabilities, which may affect the

supervised by a council consisting of officials

funds will be used for the planned ring road

fund’s activity: the state’s inability to carry

from the government, the National Bank

in Cracow

out long-term projects with full transparency

of Romania and the Financial Supervisory

and the availability of resources dedicated to

Authority, is desirable. However, it is most

budget and is managed by independent

the fund. Special attention must be paid to

important to ensure the balance between

experts, who are liable to the government

the nature of investments and to their opera-

subordination to government/the state and

authorities. In terms of assets, both the Polish

tional management,” said the Gruia Dufaut

the strategic and operational independence

fund and the Singaporean one deal with prof-

partner.

of the fund, in order to avoid having a non-

itable investments nationally or internation-

functional and corrupt structure,” said Van de

ally, in strategic and profitable fields. More

Waart.

directly, the Singaporean fund’s main mission

There might also be an issue with the way in which the fund actually makes investments, because the FSDI currently looks like

The state has worked in the past with

“The PFR receives funds from the national

is to increase the reserves it manages, in or-

an institution that takes money and puts it

recruitment firms to appoint private board

der to meet the island’s development needs,”

into public projects. This can already happen

members and directors to strategic public

said the Gruia Dufaut partner.

now and billions of euros are available in EU

firms such as grid operator Transelectrica and

funding for such investments.

railway company CFR.

“Romania needs more investments in road

For instance, the closed-end fund Fondul

Paslaru of Tuca Zbarcea & Asociatii added that we should know from the start if the FSDI will be “a genuine investment instru-

infrastructure and hospitals, but it is not clear

Proprietatea (FP), which has in its portfolio

ment or rather be used as a saving tool

how the fund will recover this sort of ‘invest-

minority stakes in dozens of state-owned

destined to cover various budgetary or social

ment’ or if they could even be treated as an in-

firms, could serve as a model for the FSDI.

expenses. Or both.”

www.business-review.eu Business Review | May 2017

30 EU FUNDS

Romania facing new EU funds programming period with old problems With Romania starting to put together projects under the new European Funds framework for the 2014-2020 period, in which the total budget stands at EUR 33 billion, there are still major delays in the appointment of the management authorities that will oversee the usage of the funds, while public sector workers in this field need additional training, according to consultants.

By Ovidiu Posirca

Romania used EUR 14.8 billion in the operational programs that ran throughout the 2007-2013 period

A

t present, Romania has only two

new EU funds management authorities had

can lead to slippages of the budget deficit

management authorities in operation

been submitted for approval and that new

and, implicitly, of the public debt,� Laurentiu

out of the ten that were designated to

guidelines would be launched in April.

Dinu, country manager of consultancy EU Ad-

send payment requests to the European Commission, the executive arm of the EU.

“The immediate priority is the successful

visors, told BR. He added that there needs to

completion of the process of designating the

be tight control of the fiscal policy to prevent

structures, systems management and control

such risks.

While the president, Klaus Iohannis, said

STRUGGLING TO START OPERATIONS FOR MANAGEMENT AUTHORITIES

for structural funds and investments in the agriculture field. Without this, the absorption

that he wanted to speak to the government

In late March, PM Sorin Grindeanu said that

of EU funds is guaranteed implicitly from the

about the absorption of EU funds, the PM said

the documents for the authorization of three

national budget. So the risks in this process

that the progress being made is visible.

www.business-review.eu Business Review | May 2017

EU FUNDS 31

EU MONEY AVAILABLE FOR ROMANIA OVER THE 2014-2020 PERIOD Operational

Budget (billions of euros)

POCU (Human Capital)

4.3

the EC at the end of the first quarter, meaning that from now on, Romania should officially start to focus on the new programming period.

JUNCKER PLAN SET TO TRIGGER MORE THAN EUR 700 MILLION OF INVESTMENTS IN ROMANIA

POC (Competitiveness) 1.3 POIM (Large Infrastructure)

9.4

POAT (Technical Assistance)

0.2

POR (Regional)

6.7

Romania has started to attract investment

POCA (Administrative Capacity)

0.5

under the major program announced by the

POAD (Helping Disadvantaged Persons)

0.4

president of the European Commission, Jean-

PNDR (Rural Development)

8.1

Claude Juncker. The initiative is designed to

POPAM

0.1

mobilize EUR 315 billion of fresh investments

CEF (Managed directly by the EC)

-

in the EU in a bid to boost the job market.

Total

32.9

Up to now the EC has approved operations with a total financing volume of EUR 180 million, expected to trigger EUR 743 million

Source: Ministry of EU Funds

in investments.

The European Investment Bank (EIB) has intermediary bodies or in the correlated evo-

approved five projects with a total financing

partner of Relians, an EU funds consultancy,

lution of the internal process for the absorp-

volume of EUR 148 million that are expected

Romania needs to have all management

tion of EU funds,” said Dinu.

to trigger EUR 424 million in investments.

According to Ovidiu Rata, managing

authorities operational by the half of this year,

In the current budgetary framework, the

so that the country can attract more European

EC will look more closely at member states’

of a loan taken out by Agricover. The com-

money.

efforts to attract EU funds. This means that

pany will use the funding to grant loans to

the low achievers risk losing money.

small and medium-sized enterprises active in

He added that there is a need for better trained public sector workers in the manage-

“The new EU regulation for the current

This includes the first EUR 15 million tranche

the agricultural sector.

ment authorities and in the intermediary

programming offers the EC mechanisms for

bodies that can answer quickly and clearly

checking the results of the absorption in

350 million to finance its research and

potential beneficiaries’ questions.

the middle of the implementation stage and

development program in seven member

“The employees in the institutions that

In addition, Arcelormittal received EUR

the option to reduce funding if the

states including Romania. The total

manage EU funds are poorly qualified and

performance is below the target

there are too few of them, so the quality of the

agreed with the European

support materials (guides, instructions) and

institutions,” explained

the advice they offer leave a lot to be desired.

Dinu, adding that the

To get over this, either the employees need to

commission will also

provide EUR 32 million

receive additional training or services need

deploy more indicators

under three agree-

to be outsourced to specialized operators

to analyze the quality

ments with financial

through technical assistance contracts,” Rata

of the absorption rate.

intermediaries. In to-

told BR. The managing partner said that the

EUR 1.2 billion.

The European Investment Fund (EIF) will

The EU Advisors head

guidelines for potential beneficiaries of EU

went on to say that the

funds need to be better linked to the eco-

capacity of beneficiaries,

nomic realities.

either public or private, to

Meanwhile, Dinu of EU Advisors pointed

expected investment reaches

tal, some 2,200 smaller companies and start-ups will benefit from this support, which is expected to trig-

develop projects with the greatest

ger EUR 319 million in investments.

out that Romania has had an “innovative ap-

benefits for the economy will be key to mak-

proach” to the coordination of the implemen-

ing sure that Romania increases its absorption

finance large-scale investments through the

tation of operational programs and financial

rate in the current seven-year period.

Juncker plan, such as a new subway line and

instruments, which has boosted the insti-

According to government data, the effec-

Although the government wanted to

energy transport infrastructure, European

tutional arrangements both in the previous

tive absorption rate of EU funds in Romania

experts have not yet vetted such invest-

programming period, 2007-2013, and in the

reached 82 percent at the end of February

ments.

current one.

2017. This means that the country used EUR

Meanwhile, the government is working to

14.8 billion in the operational programs that

launch Romania’s first sovereign fund, which

to now in the consolidation of the administra-

ran throughout the 2007-2013 period. The

should in theory support new investments in

tive capacity of management authorities and

final expenses bill is supposed to be sent to

roads and hospitals from national funds.

“This dynamism hasn’t been reflected up

www.business-review.eu Business Review | May 2017

32 ENERGY

Massive Black Sea energy investments stumble into slow public decision-making process Although Black Sea gas was touted as the main solution to help Romania reach energy sufficiency, the slow development of legislation to support risky offshore developments and protracted discussions over the new taxation framework for oil and gas deposits could hinder the country’s attractiveness to investors.

By Ovidiu Posirca

Romania’s gas production could come to a standstill close to 2050

A

merican oil major ExxonMobil and Austrian oil and gas producer OMV

the end of this decade.

Although the authorities have been saying

in April.

The minister hinted that there would be

for years that they want new investments

two taxation levels – one for companies that

1 billion in the Black Sea. The companies are

in the oil and gas sector, companies are still

export raw natural resources from Romania

jointly looking for gas off the Romanian coast,

waiting for the updated taxation framework

and another for firms that exploit and process

and although some gas deposits were discov-

in this field in order to plan their next moves.

the resources inside the country.

Petrom have invested more than EUR

ered in the exploration stage, it is not clear if

In the second quarter of this year, the

they will kick off commercial production in

Ministry of Economy should finish the new

the coming years.

royalties’ law, which would also apply in the

CRITICAL AGENCY FOR OFFSHORE PROJECTS IS MISSING

energy sector, according to the minister of

Although Romania has attracted companies

finance, Viorel Stefan.

willing to venture into the Black Sea in search

However, the minister of energy, Toma Petcu, suggested that the joint venture could

“The plan is to have a common regula-

of oil and gas, the National Authority for the

2020, by when the country should build the

tion when we talk about the mechanism for

Regulation of Offshore Petroleum Operations

transport infrastructure.

start extracting gas from the Black Sea in

establishing and collecting royalties, cover-

in the Black Sea is still not working, although

Petcu said that the new BRUA gas pipe-

ing all natural resources, from gravel from

it was set up through a special law last July.

line (Bulgaria - Romania - Hungary - Austria)

the bottom of the water and natural spring

would bring Black Sea gas onshore, adding

water to, why not, petroleum, gas and mining

industry leader at Deloitte, the professional

that this project must become operational by

exploitation,” Stefan told Mediafax newswire

services firm, says that this new agency must

Razvan Nicolescu, energy & resources

www.business-review.eu Business Review | May 2017

ENERGY 33

AVERAGE ROYALTIES AND SIMILAR TAXES FOR OIL & GAS IN UPSTREAM SECTOR Region 2014 2015 2016 Romania

15%

16.9%

17.5%

Europe (except Groningen field)

9.3%

7.9%

-

Europe

11.7%

10%

-

rules and fiscal methodologies to be clear, understood and interpreted uniformly by all the institutions in Romania,” said Nicolescu of Deloitte.

Despite the potential development of new gas fields in the Black Sea, Romania’s production could come to a standstill close to 2050.

The country’s oil output would also disappear in the same period, according to Romania’s

Source: Deloitte Romania

new draft energy strategy. The analysts’ scenario is based on the reduced consumption of

ROMANIA’S GAS PRODUCTION (TONNES OF OIL EQUIVALENT)

ROMANIA’S GAS IMPORTS (TONNES OF OIL EQUIVALENT)

Year Amount

Year Amount

after reaching a new high of 132 TWh in 2025

2015

8.87 million toe

2015

163,000 toe

as a result of the Black Sea production, to 96

2014

8.85 million toe

2014

470,000 toe

TWh in 2030 and 65 TWh in 2050. As with oil,

2013

8.6 million toe

2013

1.17 million toe

the low price scenario forecasts a decrease

fossil fuels.

“The production of natural gas will fall,

of gas production to close to zero by 2045,” Source: INS

Source: INS

states the strategy.

Meanwhile, the government has approved

ENERGY TAXATION ROSE OVER PAST THREE YEARS

the start of the deregulation of gas prices for

While companies have been struggling to

will be protected through price regulation

does not provide incentives for companies

make business plans for the coming years,

by the National Energy Regulation Authority

willing to invest in offshore projects, where

given the unstable regulatory framework,

(ANRE) to June 2021, meaning that costs will

the costs are higher than with onshore devel-

they paid more in taxes over the 2014-2016

go up gradually.

opment.

period.

start operations swiftly so that Romania can attract more investments.

Aside from this, the current legislation

“When talking about the authorization of

According to a study by Deloitte, the ef-

households in April. Individual consumers

Analysts say that by liberalizing prices for households, companies extracting gas from

such projects, there isn’t a clear regulation

fective rate of royalties and similar taxes in

the Black Sea could have a stronger business

or clarification of procedures for documents

the oil and gas sector grew from 15 percent

case to sell the majority of their production in

that could replace the construction permit for

in 2014 to 17.5 percent in 2016, while the tax

Romania.

offshore facilities, on the right of operators

burden for such companies in other European

to build pipelines under the beaches of the

markets was reduced.

Black Sea, which are owned by the state, or to

The study revealed that the average effec-

Discussions have shifted towards offshore investments, and the prospect of shale gas seems to have been abandoned for good.

reserve capacity and connect to the National

tive rate of royalties and similar taxes fell in

American oil major Chevron, which had start-

Transport System,” Miruna Suciu, managing

Europe (including the Groningen gas deposit)

ed searching for shale gas in Romania back in

partner and coordinator of the energy & natu-

from 9.3 percent in 2014 to 7.9 percent the

2013, exited the country two years later.

ral resources department of law firm Suciu

next year.

Popa, and Cleopatra Leahu, partner at Suciu Popa, told BR.

“The industry is the target of over-taxation, which discourages investments in the

Recently, the US ambassador to Romania, Hans Klemm, said that the company’s move had economic reasons.

“The lack of predictability in the fiscal

development of production,” Daniel Apostol,

“Just when Chevron was closing its opera-

framework in this field is the main source of

general secretary of the Romanian Petroleum

tions in Romania, in 2015, I was arriving here

dissatisfaction for potential investors, as the

Exploration and Production Companies As-

as ambassador. What they told me at that

new law on royalties and taxes in the oil and

sociation (ROPEPCA), told BR.

time was that the economic situation did not

gas field has been on investors’ agenda since 2015,” they added.

Under the current rules, oil royalties stand

According to Deloitte, state-owned gas

for shale gas. So it was an economic decision,”

22.5 percent in 2015 and 21.8 percent in 2016.

said Klemm in April.

at between 3.4 and 13.5 percent of the total

For OMV Petrom, it stood at 14.7 percent in

production, while for gas they are in the

2015 and 15.9 percent in 2016.

3.4-13 percent range. Additional taxes come

allow the continuation of exploration plans

producer Romgaz had an effective tax rate of

“I think that the most important thing

Chevron faced massive protests in the areas where it was looking for shale gas, with many fearing that such developments would pose serious risks to the environment.

on top of this, such as a tax on the additional

for Romania is to have a fiscal framework

revenues of gas companies stemming from

that is clarified fast and is stable on the long

Klemm said that he does not currently

the liberalization of the market.

run, and that this clarification is made in full

know of any company interested in develop-

transparency. It would be better for the future

ing shale gas locally.

www.business-review.eu Business Review | May 2017

34 INTERVIEW

Dictie.ro, a diction app for Gen Z Carmen Ivanov, a well-known radio anchorperson and trainer, launched the first Romanian mobile diction app, an extension of the website of the same name. BR dove deeper to find out more about the idea and the process behind it.

ABOUT Carmen Ivanov A radio and TV journalist with over 10,000 microphone hours, she currently produces and presents the show IT Republic for Radio Gold FM. Ivanov is a diction trainer offering specialized diction, commercial voiceover and public speaking courses, and the only author of a diction manual and mobile app in Romania.

By Romanita Oprea When did your passion for diction first start?

that one day someone would write, for example, the first diction manual in Romania.

What were the criteria for choosing the app’s developers?

It came along with my passion for radio,

Or create the first interactive diction audio-

I was looking for a young team, but with

because my first job was in the radio business. It’s the place where, for the first time, I heard my voice in headsets and I realized that, besides a good voice, impeccable diction from pronunciation to intona-

book, the one with a very hard to pronounce name: “Sase sasi in sase saci” (Six Saxons of Transylvania in six bags).

Once I started to teach

understand exactly what I wanted a person to receive the second they opened the dictie. ro app. In only half an hour, the guys from Kappsule Studios succeeded in delivering

tion was also extremely important.

You are the first person in the Romanian media to place so much importance on diction. How have you paved the road for others?

experience in mobile apps, a team that would

what we wanted, and even more. We can say

What made you decide to create an app for diction?

that the diction app in Romanian is the most

The dictie.ro app is

able for free both in the AppStore and Google

a communication

complex diction app on the market because similar apps in other languages do not offer as many functions as ours. The app is availPlay.

channel created

diction at the Center

especially with

for Independent

the younger gen-

Who is your target and how do you intend to reach it?

Journalism and

eration in mind.

My target was 10,000 downloads in the first

the Television

Generation Z,

month. Fortunately, this number was reached

School, I found

those born after

just two days after the official launch.

that there was

1995, prefers

I would love every Romanian with a smart-

a real need for

to get informed

phone to have the dictie.ro app installed and

diction train-

with the

to use it. I made a lot of media partnerships

ing. There

help of the

to promote the app, as it is free and useful for

are hundreds

internet,

those that want to practice their diction or

of classes for

apps and

take phonetic, grammar and correct speaking

social media.

quizzes.

public speaking out there,

I decided

but very few of

that diction

them offer diction

in Romanian

in such a way as to

needs to be ac-

help one speak in

cessible also to

At the moment, we are working on an update that will enrich the app’s content and bring new features.

public. Why me and

those who spend

How much time did it take to create and what was the initial investment?

not somebody else?

all their time

I invested almost EUR 5,000 of my own

This is a question I never asked myself before, but I realized

with their mobile phones in their hands.

funds. The development – from idea to the launch – took almost seven months. The actual development, almost six months.

www.business-review.eu Business Review | May 2017

36 MOBILE APPS

Useful mobile apps winning consumers’ hearts Smartphones and tablets are outselling computers by over three to one, and many consumers access the web on a smartphone, instead of a computer. As a result, mobile experience is key for businesses.

By Romanita Oprea They recognize the need to understand consumer behavior, both to see what is working in their apps as well as to identify and improve what isn’t,” noted the specialists at Apsalar.

According to Nielsen research, the average smartphone has about 100 apps, but only 1015 are regularly used. A big part of delivering on this app “must” is ensuring outstanding app user intelligence and user experience.

Another way of making an app successful is to have it solve a problem and make the user’s life easier. At a time when ease and convenience rank supreme, an app that simplifies one’s life and helps in everyday tasks is a great way to penetrate the market.

BACK TO ROMANIA As seen in the latest advertising competitions, Clients are more open to the idea of creating and using mobile apps in their strategies

A

creative apps and campaigns that focus on usefulness, with a touch of entertainment on the right scale, are winning not only consum-

n app can push information to users,

ing and shopping. “Moreover, 85 percent of

ers’ hearts, but also jury members’. Mobile

adjust to slow data speeds and cre-

Romanians access shopping websites via their

apps such as First Aid for Crucea Rosie,

ate a cleaner, more inspiring visual

mobile phone. I don’t think it’s a trend; it’s

created by the agency Lowe, and #seatbeltb-

experience. Worldwide, around 90 percent of

just something that characterizes Romanians,

00bing, created by Publicis for the Romanian

app installs are generated by just 10 percent of

in general. They need and want the clear

Automobile Club (where women are encour-

apps, meaning that the odds of an individual

usefulness factor,” said Daniel.

aged to upload selfies in which they wear the seatbelt), have received high praise.

discovering one specific app are slim. For

More recently, mobile apps such as diction

example, in the iTunes store, app rankings

WHAT MAKES AN APP GREAT?

are based on install speed; therefore, to rank

To achieve success, the app creator must:

app Dictie.ro and WhisperMe are making

high, an app must generate a lot of installs in a

create a great product, make it viral (both

waves. By the end of March, WhisperMe had

short amount of time and may not guarantee

draw users to download it and inspire them

been downloaded over 5,000 times, espe-

long-term success.

to share it) and ensure compatibility for both

cially by people from the USA, Romania and

iPhone and Android platforms. Moreover, a

Brazil.

Snapchat was the most-downloaded free

Still, some questions arise: is it easier to

iPhone app in 2016. Facebook Messenger

marketing and PR budget to help promote

remained the second most-downloaded app,

it to influencers and specialists is necessary.

convince companies to invest in mobile apps

while Pokémon Go was third, taking Dub-

And finally, make it free. An app can be mon-

in Romania? Do they consider them important

smash’s spot from 2015.

etized with in-app purchases, but to expo-

enough for the brands they are representing?

According to Andreea Daniel, owner of Good Vibes, the most used mobile applications in Romania created by local agencies or

nentially increase the odds of trial, the magic word free should do the trick.

“Successful apps are much more likely to

“Clients are more open to the idea of creating and using mobile apps in their strategies and plans. I’m receiving briefs that request

companies are those with a high usefulness

have mobile app measurement and attribu-

the mobile component and, especially, the

factor in day-to-day tasks, such as taxis, bank-

tion platforms in place before they launch.

mobile app one,” notes Daniel.

www.business-review.eu Business Review | May 2017

ARTS 37

Geta Bratescu represents Romania again at Venice Biennale The 57th Venice Biennale will once more host Geta Bratescu, a central figure of local contemporary art since the 1960s, with the exhibition Apparitions, curated by Magda Radu. So what’s inside the local pavilion?

By Oana Vasiliu and for artists, says curator Christine Macel, and deals with the forms they propose, the questions they pose, the practices they develop and the forms of life they choose.

“The exhibition Apparitions was conceived through the lens of thematic clusters, including the most recent phase in [Bratescu’s] artistic practice, in an attempt to provide a mirror of her studio space, understood both as a physical space and a meta-artistic entity,” runs the official description of what will be on view in Venice.

Photos courtesy of Apparitions

“Geta Bratescu’s presence at Biennale Arte 2017 is aimed at communicating art’s capacity to invent narratives that transcend the gloomy climate of the contemporary world, by means of an artistic reflection that highlights the transformative strength of femininity as the consummate embodiment

B

Lady Oliver in Her Traveling Costume, 1980 – 2012, b/w photography

of a ‘nomadic subject’. Her art finds itself in full consonance with the return to material-

ratescu’s participation in the Venice

She has participated in the Biennale twice

ity, to the power of the artistic imagination, to

Biennale 2017 brings together works

before – in 1960, as part of a group exhibi-

art’s power to give shape,” explained Magda

representative of all the stages of her

tion, and again in 2013 at the Central Pavilion,

Radu, curator of the exhibition.

artistic journey, demonstrating the comfort

alongside Stefan Bertalan and Andra Ursuta.

Apparitions will go on display in two locations – the Romanian Pavilion in Giardini

with which she employs a multitude of artis-

This time, her creations will be part of

tic media. The artist’s career has bridged the

Viva Arte Viva, the 2017 biennale’s concept,

della Biennale and the New Gallery of the

past 50 years and seen her working in mul-

described as an exclamation, an expression of

Romanian Institute for Culture and Human-

tiple mediums, from textiles and sculpture, to

the passion for art and the state of the artist.

istic Research – and will be open to the public

film, photography, drawing and even writing.

Viva Arte Viva is a Biennale designed with, by

from May 13 to November 26.

Stone Giving Birth, 1960s

Game of Forms, 2012, collage on paper

The Line, 2014, HD video

www.business-review.eu Business Review | May 2017

38 MEDIA

Press freedom: how does Romania fare?

On World Press Freedom Day, May 3, people assess the state of press freedom around the world, and pay tribute to the journalists, editors and publishers who risk their lives in defense of the public’s right to know. Where does Romania stand?

By Oana Vasiliu

R

omania came 49th in the 2016 World

While independent media were active and

dent Journalism, Cristina Lupu, comments

Press Freedom Index, unveiled by

expressed a wide variety of views without

that for 17 years now, her organization has

Reporters Without Borders, up three

overt restriction, politicians and persons with

been examining press freedom locally. The

places from the previous year when it came

close ties to politicians and political groups ei-

center annually releases the Romania Media

52nd. The organization highlighted the main

ther owned or indirectly controlled numerous

Sustainability Index, an analysis of the local

problems of the mass media in Romania:

media outlets at the national and local levels.”

media. “Once again, the discussion tone was grim. Negative trends continue and, usually,

“excessive politicization of the media, corrupt financing mechanisms, editorial policies sub-

Local view: moguls set the agenda

have worsened. Everywhere in the world,

ordinated to owner interests and intelligence

Business Review canvassed organizations

the press is marked by biased or false news.

agency infiltration of staff – such has been

working towards press freedom and freedom

Financially speaking, journalists and media

the impact of the media’s transformation into

of speech for their input. “Not only are we

businesses barely survive. But, there is some

political propaganda tools, which has been

talking about obvious economic and political

good news: in 2016, several new media voices

particularly visible in election years, includ-

interests which are

ing 2014.”

represented by the

Freedom House’s freedom of the press re-

institutions domi-

port gave Romania a score of 38 in 2016, down

nated by the media

from 42 in 2015, categorizing it as a “partly

moguls, but also

free” country. Some 41 percent of the world’s

press manipulation

population has a “partly free” press, 46 per-

by the secret ser-

cent live in “not free” media environments,

vices,” says Raluca

and only 13 percent of the world’s population

Feher, co-founder

enjoys a “free” press – that is, where coverage

of the Frontline

of political news is robust, the safety of jour-

Club, which pro-

nalists is guaranteed, state intrusion in media

motes independent

affairs is minimal, and the press is not subject

journalism and

to onerous legal or economic pressures.

freedom of speech.

The US State Department, in its 2015 Hu-

She underlines

man Rights Report, also profiles Romania in

that the national

terms of media freedom, and finds it wanting.

media landscape is

“Personal and professional threats to journal-

clearly divided into a

ists undermined media freedom. (…) The

majority of obedient

law’s restrictions on insulting state insignia;

voices and very few

religious defamation; denying the Holocaust;

independent institu-

using fascist, racist or xenophobic symbols;

tions, whose power

commemorating individuals who have com-

is limited.

mitted crimes against mankind; or promoting

The director of

fascist, racist, or xenophobic ideologies apply

programs at the

to the print and broadcast media as well.

Center for Indepen-

www.business-review.eu Business Review | May 2017

MEDIA 39

consolidated their position and we also published investigations that impacted the lives of each of us.” Asked by BR to comment upon Romania’s ever improving international media freedom ranking, Razvan Martin, coordinator of the FreeEx Program at ActiveWatch, attributed this to favorable legislation for the freedom of speech. Romania is one of the few European countries where insults and criminal defamation are not punishable. Also, attacks reported by journalists are relatively few, and media outlets aren’t closed down by the authorities. The pressure is more on whistleblowers from public institutions who go to the press rather than those who actually write the news. Martin also underlines the problem of media baron influence: “The Romanian press’s big problem is that moguls use the media for other interests than for public information. Media influence, which sets the public agenda, is in the hands of owners who have often faced political, economic or criminal charges. The editorial policy of these media outlets often ignores the public interest, sacrificing truth for the patron’s interests. So self-censorship is a sine qua non rule of survival in these newsrooms, with any dissent punished.”

The cover of Freedom of the Press report from 2015 designed by Freedom House

www.business-review.eu Business Review | May 2017

40 FILM

Lights, camera, TIFF! It’s Transylvania International Film Festival (TIFF) time again, and Business Review got a sneak peek with Tudor Giurgiu, president of what is one of Romania’s biggest arts festivals.

By Oana Vasiliu so we want to provoke the audience and challenge ourselves to be fresh and different every year.

How does the funding compare with last year? Are all stakeholders back on board?

How about support from local authorities?

The main supporters have remained roughly Photo: Dragos Dumitru

the same as last year; these are well cemented relationships. Without their support, TIFF wouldn’t be possible. We don’t have the same sponsors as last year because new ones joined our team with whom we hope to maintain long-term collaborations. Instead, we have

What should we expect from TIFF 2017?

the festival the day before, on June 1, with

the same key institutional partners: the Min-

It will bring many surprises, including the

Lotte, mon amour, a live music show com-

istry of Culture, the National Film Center, the

promotional campaign and special guests. I

bined with animation by Lotte Reiniger, for

Creative Europe Program – European Union’s

must keep the main special guest under my

children and parents.

MEDIA, the City Hall and City Council of Cluj, and the Romanian Cultural Institute. Their

hat for a bit longer. However, it will be worth the wait.

In terms of the program, TIFF audiences

What are the main challenges this year?

support is vital every year.

I think there are two major challenges that we

should prepare for more than 400 screen-

face every year: guaranteeing all the neces-

ings in the ten-day festival. We have special

sary funding and surprising our audience.

Where would you position TIFF 2017 on the international film festival scene?

screenings of films that debuted at Cannes,

With every year, with every new element that

TIFF has grown enough in recent years that

Venice, Berlin, Locarno, Karlovy Vary and

we insert into the festival structure, with each

it can be compared with the biggest film

Toronto, courageous movies from newcom-

big guest that we bring, we raise the public’s

festivals in the region. Major festivals such as

ers in the competition sections, Romanian

expectations. Every year, we have this big

Karlovy Vary and Thessaloniki look jealously

premieres, a meeting with Radu Mihaileanu

gathering and we know we cannot let down

at Cluj. Moreover, since 2011 we have had

and foreign actors from The History of Love

our public – this is not an option. As such, the

FIAPF (International Federation of Film Pro-

(partially filmed in Cluj), a focus on Austria

pressure increases gradually and the team

ducers) accreditation, which places us among

and Slovenia, a collection of new romantic

must become increasingly skillful and adept

the 40 largest film festivals in the world. It’s a

comedies as part of a thematic section, a

at juggling all these expectations and emo-

standard that we not only want to maintain,

Jean-Pierre Melville retrospective, and HR

tions. But, as the pressure increases, so do the

but to improve on every year, to bring some-

Giger’s Portrait, the fabulous artist who de-

rewards.

thing new and be connected to what happens

signed the alien from Alien.

Of course, we’ll also have concerts as well

in other places and even take steps before others. TIFF is already positioned on a highly

Broadcasting, the new alternative sensation

You’ve been president of the festival since the beginning. How do you keep its approach fresh?

from the UK; British folk artist Charlie Cun-

I’m trying to age graciously, listen to those

ningham; Jozef van Wisse, a frequent collabo-

much younger than me and pretend I’m just

potential for filmmakers and one of my oldest

rator of Jim Jarmusch, who will sing songs

16 years old, as old as TIFF! Mihai Chirilov

dreams is to make the region a second center

from the soundtrack of Only Lovers Left

(e.n. the artistic director), myself, all our

of Romanian cinema, after Bucharest. We took

Alive, for which he was awarded at Cannes;

colleagues on the festival board, we all feed

the first step with the Transylvania Film Fund

and Christine Ott, who will unofficially open

ourselves with TIFF’s energy and adrenaline,

project, the first regional fund in Romania.

as cine-concerts: we will bring Public Service

selective festival map and marked as “not to be missed”.

Cluj itself and Transylvania have excellent

www.business-review.eu Business Review | May 2017

42 CITY

Ghost in the Shell FILM REVIEW

By Debbie Stowe are evident in its impressive look. Almost all

DIRECTOR: Rupert Sanders STARRING: Scarlett Johansson, Takeshi Kitano, Michael Pitt, Pilou Asbæk, Chin Han, Juliette Binoche, Anamaria Marinca ON AT: Movieplex Cinema Plaza, Grand Cinema & More, Happy Cinema, Cine Globe Titan, Hollywood Multiplex, Cinema City Cotroceni, Cinema City Cotroceni VIP, Cinema City Sun Plaza, Cinema City Mega Mall, T IMAX®, Cinema City ParkLake, Cinema City ParkLake VIP

I

the scenes are visually captivating, from the high-tech Hong Kong skyline to the dank and gloomy rebel underworld and the pristine corporate labs.

The plot is less powerful. Stories of huge, innovative corporations that might or might not be ethically dubious are a tired trope, one which feels old, even though the film’s aesthetic is so modern.

The acting is decent enough. Johansson’s lack of range is not an impediment given that she’s playing a cyborg – a bit like when direc-

n a futuristic Hong Kong, humans can

tors cast Keanu Reeves as an alien so they

get spare parts from robots to heal their

could have a much-loved star in their film

injuries and generally improve their all-

without it being ruined by his woodenness.

round functioning. The company pioneering

Ghost in the Shell’s main weakness is

the technology, Hanka Robotics, is working

probably the fighting versus non-fighting ra-

on a special project: putting a real brain into a

tio, which is tilted too far in favor of fighting.

mechanical body, thereby combining the best

The story works best in the moments of neat

of human and robot, to make a high-perform-

characterization, deduction and enlighten-

ing, indestructible, crime-fighting machine.

ment, when Mira gets closer to the mystery

Mira (Scarlett Johansson), a young woman

of what’s going on at the corporation. Its

seriously wounded by a terrorist attack that

shootouts, ambushes, punch-ups, chases and

left her orphaned, is the product of the top-

melees are done with some style, but overall

secret experiments. Despite the misgivings

they drag on too long, and distract from the

of her designer, Dr. Ouelet (Juliette Binoche),

narrative build and tension.

she is put to work on the counter-terrorism

Another criticism has been that of white-

squad, where she quickly rises through the

washing: the source material is Japanese, as

ranks to become Major.

are the main characters, and the parachuting

But Mira is troubled. Not only does she

in of white actors to play most of the lead

have difficulty remembering anything of her

roles has not gone down well with critics.

life pre-augmentation, while being plagued

The presence of non-Asians can partly be ex-

with hallucinations, but strange things are

plained with the transposition of the action

going on at Hanka, including a series of

to Hong Kong, where white people are a more

suspicious deaths. Soon, to the annoyance of

common sight than in the more monoeth-

the company’s dead-eyed CEO Cutter (Peter

nic Japan, but it still strikes a jarring note,

Ferdinando), Mira is going rogue, conducting

especially later in the film when Mira’s hazy

her own investigation.

background becomes clearer.

Cue lots of Matrix-style robotic fighting.

Romanian viewers’ interest in the casting

Although, given that the movie’s source

choices may instead focus on the appearance

questions presented by the narrative, such

material is a Japanese manga said to have

of Anamaria Marinca, of 4 Months, 3 Weeks

as the nature of humanity and the ethics of

inspired the Wachowski brothers’ trilogy,

and 2 Days fame, as a Hanka doctor.

biotechnology. However, Ghost in the Shell’s

director Rupert Sanders is not necessarily the one doing the borrowing.

Ghost in the Shell’s origins in animation

It’s not a particularly memorable movie,

charms, fleeting as they are, outweigh its

and, unlike some superior sci-fi flicks,

lack of originality and overreliance on high-

doesn’t attempt to engage with the big

octane action.

www.business-review.eu Business Review | May 2017

44 EXPAT EYE

Bye-bye Bucharest: lamenting a long (but not hot) summer away Faced with a near six-month exile back in her native land, BR’s resident UK expat outlines what she’s missing most about Romania and Bucharest.

than a few metro stops from most friends…

By Debbie Stowe

you want the same in London, you have to

T

The affordability of property (bought or rented) in the heart of a European Union capital is one of the joys of Bucharest life. If (a) be a footballer or celebrity, (b) have sold

en days from May (the month, not the

sunny day in March with the temperature in

your soul and be slaving 18-hour days for an

quasi-dictator prime minister), it’s

the balmy mid-20s – how spring should be.

amoral financial institution or corporation,

chilly and gray outside, politics is in

Three hours later, we touched down in the

or (c) have inherited a shedload of cash from

turmoil and the kettle’s on. Yes, this month’s

UK, to barely-above-zero grayness. As we

wealthy ancestors. A parking space in Lon-

column is brought to you live and direct from

disembarked down the plane steps, driving

don went on sale for over EUR 400,000.

England, and here are my current gripes

winds sent lashing rain into our bewildered

about that.

faces. My 18-month-old started crying. I felt

1

like doing likewise.

COFFEE

Most Brits – barring the really sophisti-

3

6

POLITICAL STABILITY

Okay, I’m (half) joking. However, as the Brexit fallout continues, we’re now facing

PRICES

a snap general election. At least Romania’s

cated ones – got their introduction to coffee

The taxi back from the airport cost about

top politicians only want to let their corrupt

through the instant variety Gold Blend. Ooh,

as much as the flight – our British spending

cronies out of prison and steal a few thou-

what an exciting alternative to the national

account was open, and it still is, with outlay

sand from state funds here and there, not

cuppa (tea) we thought, back in the 20th

rising rapidly. It’s too simplistic to say that

tank the economy, trash their international

century. The 2000s brought an explosion in

Romania is cheaper than the UK, because

influence and bring on the actual breakup of

popularity of international coffee chains such

that doesn’t apply across the board – super-

their country, as it currently exists.

as Starbucks, Caffè Nero and Costa, which

market food, clothes and electronics either

blew our minds – coffee… but not from gran-

cost less or can be better value in Britain.

colder, exiled far from big city excitement,

ules! Check out us chic Europeans! For many,

But, get a cab for a meal and a few drinks in a

and with only bad brews or trusty tea to pep

coffee drinking could get no fancier than a

modest restaurant, and weep for Cristaxi and

me up, I dream of drinking a lovely espresso

skinny latte in a chain store. (Proper stuff is

your local Bucharest trattoria.

on a Bucharest terrace on a warm autumn

available in some independent outlets in the more cosmopolitan cities, but you need to know where to look.)

4

day. Enjoy your summer!

CINEMA

In Bucharest, your options are: (1) a delight-

I was one of the instant-ignoramuses in

fully old-school downtown venue with

my time, but since moving to Romania, have

quirky charm; cost about EUR 2.50; (2)

classed up in this regard and can now (I like

comfortable though less characterful multi-

to think) tell a good coffee from hot, brown,

plex; cost about EUR 5; or (3) multiplex VIP

bean-flavored water.

cinema, reclining seats, with buffet, drinks

But, desperate times, desperate measures,

and popcorn included; cost about EUR 15.

and we thought we’d chance a Starbucks. I

In the UK: your main option is a multiplex,

ordered a decaf cappuccino and was asked

where the VIP section just means a slightly

what size. The smallest option seemed to

larger seat; the cost of two tickets, one pop-

contain about as much liquid as a Romanian

corn bucket and one drink came to GBP 46.

ibric, the largest, a small bucket. It tasted

GBP 46! Nearly GBP 50 to see a movie on a

burnt. Oh, for the sunlit uplands of Coffee

weekday afternoon! See previous point.

Factory, Caffe Latte, M60 and their ilk!

2

WEATHER

We flew out of Bucharest on a gorgeous

So, after a few months of being poorer and

5

CITY CENTER LIVING

Walking to work, concerts, theaters, the opera, restaurants and cafes; living no further

4

5

RESTAURANT REVIEW 45

Where the food does the talking >>> Dancing Lobster, Pescariu Tennis Complex, 0770 690 886 <<<

I

t has been a well documented social

a maritime nation, fish and shellfish rank

reveals the most tender, flakiest fish imag-

conundrum for ages as to why natives

high in the country’s diet. In order to keep

inable. There were two rice dishes, a choice

of Latin countries cannot speak ‘sotto

the cuisine accurate, the house flies in all its

of monkfish or octopus. Be aware that as

voce’; rather, they talk at the top of their

fresh produce directly from Portugal, with

soon as the octopus is landed, the fisher-

voice when speaking in their native lingo.

the result that it offers you the widest selec-

man must pound the dead octopus over

It is all a good natured thing, and they will

tion of seafood in the land.

and over on the rocks to tenderize it. I have

never change. So I am sitting in Dancing

And to better prove my point, amongst the

Lobster, a Portuguese chophouse, with an

various goodies on offer, there were: live crab

Argentinian family behind me, a Span-

(you can select it from the fish tank), prawns

ish group to my left and a Portuguese family to my right.

(either scarlet ,Mozambique or tiger),

no doubt that the house supplier adhered to this ancient practice.

But I was let down by my cataplana, a casserole containing a huge selection of shellfish.

I prefer the French

fresh

way of preparing

The chatter

this: cooking it

is deafening,

in wine with

and it is ex-

a copious

acerbated by a high

amount of

ceiling

garlic and

which

topped with

raises the

coriander.

decibel

All the above were missing,

level to an

but to be fair to

echoing ca-

the house, its ver-

cophony. Read on and you will see why this example should not put you off; rather

sion is the true way.

raw

By now I was oblivi-

lobster tail, John Dory, snapper, red scorpion

ous to the exuberant shouting

consider it to be part of the house’s eccen-

fish, cuttlefish, grouper, turbot, octopus,

emanating from the happy, excited tables

tric charm.

clams, Monkfish, and more.

all around me, as I was concentrating my

But there was more eccentricity to

So let’s look at the menu. For starters

mind on the amazing range of fish, and to

come, for as I spoke to our waitress in my

there were: moules au gratin, fresh crab meat

be honest I was making a mental note of

‘questionably perfect’ Romanian lingo, she

pate, fried cuttlefish with mustard mayo,

what to order on my next visit.

replied, “Sorry, I don’t speak Romanian,

squid in olive oil and coriander, and fresh

only English and Portuguese.” For Roma-

clams in wine and coriander. I chose the

and a selection of meat steaks plus des-

nians, there were Romanian waiters on

lobster tail, which thankfully had never seen

serts. But I had no interest in these, so I

hand. When I told her I was a former chef,

a freezer, hence it kept its flavor. But at RON

cannot report them to you for their quality.

she almost dragged me over to meet her

40/100g it was hellishly expensive. It came

They have an open kitchen, so all the crew

chef, who spoke only one tongue – Portu-

with a side of melted butter and garlic and it

are approachable and if you ask them to

guese. This fine fellow waved me to his

was every bit as good as I had anticipated.

‘customize’ by adding something to your

kitchen crew, who were all Portuguese!

Off to the mains, and I had the national

dish before it is cooked they are friendly

Something told me I was about to

dish of Portugal: bacalhau, fresh cod cooked

enough to accommodate such a request.

experience authentic Portuguese cuisine,

in a hard shell of salt. The cod steams itself

and pretty damn good it was too! As befits

inside the shell, which when cracked open

They had a few seafood pasta dishes,

Michael Barclay Mab.media@dnt.ro

www.business-review.eu Business Review | April 2017

46 CITY

Cultural calendar

By Oana Vasiliu

perience to jazz fans. More than

The must-see show combines

80 artists from 15 countries will

3D visual effects, modern audio

perform in Sibiu, including Kar-

technology, a superb lightshow

nas Formula, Yilian Cañizares,

and the Baroque genius of

Natalia M. King and Black String.

Antonio Vivaldi’s music. That’s the promise of this dazzling live

Vivaldianno Sala Palatului, May 21

experience, Vivaldianno – City of Mirrors, the creation of Czech composer and producer Michal Dvořák, while the visual concept comes from the imagination of Kosuke Sugimoto, the renowned Japanese artist, director and animator. Dvořák virtually reconstructs the Italian composer’s classic compositions with 30

Varekai by Cirque du Soleil Romexpo, May 3-7

musicians and a 3D musical on-

Recognized all over the world,

modern covers and the energy

Cirque du Soleil has constantly

of Vivaldi’s works with the latest

sought to evoke the imagination,

technology. Tickets cost from

invoke senses and provoke emo-

RON 115 to RON 280.

stage, and combines original and

tions. The famous circus returns to Bucharest’s stage, this time presenting Varekai. “Deep within a forest, atop a volcano, exists an extraordinary world, where

touring after circumnavigating

anything is possible: Varekai”, is

the globe countless times over

the story of the performance. In

the course of a nearly five-

gypsy language, Varekai means

decade career. Ticket prices run

“everywhere” and is a tribute to

from RON 130 to RON 350.

the nomadic soul, spirit and traditional art of the circus. Tickets cost from RON 89 to RON 301 and can be bought from the Eventim network.

Deep Purple concert Romexpo, May 13 The legendary rockers come to Romania with “The Long Goodbye Tour”, giving local fans the chance to see the Rock And Roll Hall Of Fame inductees, one of the genre’s most iconic bands,

Sibiu Jazz Festival Piata Mica Sibiu, May 18-21

present their latest studio album,

For the first time in years, the

inFinite, released early in 2017.

event’s main stage will be placed

The tour name fuels speculation

outdoors, bringing the magic of

that the band is planning to quit

the al fresco music-listening ex-