www.business-review.eu Business Review | July May2020 2016
COVER STORY FDI 17 14
How can Romania attract the FDI it needs to recover? As Romania posted a negative foreign direct investment (FDI) inflow in 2020, we should look at solutions for recovery in the short and medium term. Romania must act decisively to retain its attractiveness. By Claudiu Vrinceanu
R
omania had registered a decline of EUR 454 million in FDI by the end of April this year, compared to a posi-
tive figure of EUR 2.16 billion during the first four months of 2019. Foreign direct investments are projected to plunge by 40 percent in 2020 due to the recession caused by the COVID-19 pandemic. “Developing and emerging economies are expected to be the worst affected, with exportoriented and commodity-linked investments projected to be severely impacted. The decline in FDI may transform international production and increase sustainability,” said the United Nations Conference on Trade and Development (UNCTAD). The projections are based on UNCTAD’s 2020 World Investment Report, which estimates that FDI will decline below USD 1 trillion for the first time since 2005. FDI is expected to further decline by 5-10 percent in 2021. An alarming number
The decline in FDI may transform international production
of executives are pessimistic about Romania’s prospects post-COVID-19, with many believing that Romania is at risk of being less
intensive sectors is not guaranteed. The local
tion that should be on the map for potential
or much less attractive for investment. Of
economy needs a robust digital infrastruc-
investors,” said the president of the Foreign
course, all countries are likely to be less at-
ture, with fast and reliable connectivity.
Investors’ Council (FIC), Ramona Jurubita.
tractive for cross-border investment, not just
COVID-19’s impact on market demand
In this framework, what should be the role
Romania. One way Romania could act deci-
and operational capacity varies significantly
of Invest Romania, our investment promo-
sively to retain its attractiveness would be by
by sector and this influences FDI as well. A
tion agency, especially in the context of
investing in the technology, health care, and
global survey of investment promotion agen-
COVID-19? The focus should be on aftercare
environmental industries.
cies conducted by the World Bank revealed
to secure the portfolio of actual investors,
that supply chain disruptions were hitting
but government representatives should also
ogy and sustainability sectors in economic
production and revenues. This is resulting in
scout for potential investors, identify their
growth is not lost. Investors rank CleanTech
Capex and employment reductions in invest-
concerns, and facilitate their access to sup-
first in terms of its potential for economic
ment plans, particularly impacting manufac-
port services offered by local authorities.
growth across Europe in the coming years.
turing investments in the transportation and
Another priority could be the digitalization
The digital economy sector ranks second,
textile industries. “We need to have a much
of certain marketing services and creating a
and the health care and well-being sector is
more proactive approach to attracting foreign
new online platform to promote Romania.
third,” said EY representatives. But contin-
investment in the country and, at the same
This might be a good way to cope in the post-
ued investment in Romania’s technology-
time, work on Romania’s image as a destina-
lockdown recovery.
“The importance of Europe’s technol-
