Romania regresses to economic competitiveness

Romania regresses to economic competitiveness

Last year, 62th, this year in the 68th place, Romania loses its economic competitiveness worldwide. This is what reveals, for our country, the World Economic Forum’s Global Competitiveness Index. Because it is very common to compare oneself with countries in the region, it is worth mentioning that Bulgaria is ranked 49th, rising from the 50th place, the Czech Republic ranked 31st staying the same, Poland dropping from 36th to 39th place, Turkey rising slightly from 55th place to 53rd, Slovakia rising from 65th place to 59th place and Hungary rising from 69th place to 60th place.

Romania regresses to economic competitiveness

Why should we look for such an index? Because it measures growth factors and long-term prosperity. It helps policy-makers to identify the challenges they must overcome and the strengths they can strengthen up when designing the country’s economic growth strategies.

Competitiveness, the criterion of ranking, is defined as the set of institutions, policies, and factors that determine the productivity level of an economy, which in turn determines the level of prosperity that the economy can generate for its citizens.

In 2017, in Romania, the productivity per employee was 65.3% of the European average*

On the other hand, in terms of the number of hours worked, Romanians are among the most diligent workers. In other words, in Romania, there is a lot of statistical work and no result, let alone to say otherwise. Except for Bulgaria, all other EU countries are in front of Romania in terms of productivity. Despite this ranking, the reasons for Bulgaria’s increased competitiveness are the stability and predictability of the tax system, the policies adopted, and thus the messages sent to investors over the past year.

We list briefly Romania’s results on the 10 pillars considered in the global competitiveness index for the 140 analyzed countries, as follows:

Romania ranks 86th in terms of institutions, 83rd in infrastructure, 38th place in the macroeconomic environment, 92th in the level of primary health and education, as well as efficient in the goods market, ranks 70th in terms of education and the level of high education, regarding efficiency in the labor market, Romania is on the 89th place, for the development of the financial market Romania is placed on the 88th position, on the level of technical training is 51st worldwide, for the level of sophistication of the business environment is 116th, and on innovation is on the 96th position for a market rated 41th out of the 140 countries surveyed.

According to the Global Competitiveness Index, the five biggest challenges of the Romanian business environment are: 1. the level of taxes; 2. inefficient government bureaucracy; 3. access to finance; 4. inadequately educated workforce; and 5. corruption.

The latest Eurostat report reveals that Romania recorded the highest economic growth in the European Union (1.4%) as compared to the previous quarter. Good news! We know of moderating consumption and adjusting inflation from 5.4% to 4.5% with the prospect of reaching 3.5% at the end of the year. We know that the economic kinetic is influenced by the combination of consumption-investment-export, macro indicators to which Romania seems to be best placed in its global competitiveness index mix.

But what do we do with competitiveness? The competitiveness of a country is also given by the level of sophistication of the business environment (currently 116), the level of innovation (currently 96), the level of primary health and education (currently 92), the efficiency of the labor market (88th), institutions (88th place) or infrastructure (83rd place).

Romania has managed to be the best yet not a competitive country. The competitive pressure should guide our focus on the future of Romania.

*Eurostat

Foto: Pixabay

Read also 6 out of 10 companies have not the leadership skills needed to develop a digital business model