Romania is a country that is located strategically in Southeastern Europe. According to the CIA world fact book, it has a GDP of $186.5 billion and an annual growth rate of 5% as per 2016. It has a Purchasing Power Parity (PPP) of $441 billion and GDP per Capita of $22,300. Romania has a population of around 19 million people.
A comparison between the communism era which lasted up to 1989 and the post-communism era upon introduction of a free market economy indicates that there has been a higher growth rate regarding trade. For instance, its Foreign Direct Investment has gone up by approximately $170 billion since it adopted a free market. The grow accelerated significantly in 2004 and 2007 when Romania acceded to the NATO and the European Union treaties thus becoming a member (James et al. 10-13). However, it was significantly affected by the Global Economic Crisis of 2009-2009 like other European countries
The main export of Romania includes wheat, insulated wires, refined petroleum products, cars, and vehicle parts. Its main imports include crude oil, packaged medicaments, vehicle parts, insulated wires, and cars. Her main export is vehicle parts, and her primary import is crude oil. As a result of importing more than it exports, Romania has had a negative trade balance of around 5%. The imbalance means there is a trade deficit which leads to a decrement in the GDP (Cristian-Balasan 3-10).
The most significant changes that have taken place in Romania came into being in 1991 when they adopted a new constitution which leaned towards a free market economy. In 2004, Romania was declared Functional Market Economy which allowed it to be part of NATO. In 2007, it became part of the EU by acceding to the EU treaty (Cristian-Balasan 4). The accession of the EU treaty introduced massive changes including the abolition of customs barriers such as trade tariffs with other European Countries. The elimination of trade barriers led to a free movement of goods and labor which has considerably boosted its business volumes (International Business Publication 93).
Other measures that are in place by the government include the introduction of new currency measures which have yielded fiscal sustainability. The improvement of tax collection and administration and the promulgation of an investor-friendly framework is another significant change. The proposals have made FDI a seamless process (International Business Publication-USA 60-73). The government has also sold a majority of its minority shares in state-owned corporations, particularly in the energy sector so as to pave the way for independent corporate governance devoid of government interference.
It, therefore, can be concluded that Romania has made tremendous strides since it made the transition from communisms in trade and its economy. Though it was significantly affected by the economic recession after joining the European Union in 2007 to 2010, since 2011, it has shown a steady growth in trade and the economy at large.
Works Cited
Cristian-Balasan, Andrei. The Recent Trend of Romania’s International Trend of Goods.
CES Working Papers. (2013): 1-10.
IBP USA. Romania Doing Business for Everyone Guide-Practical Information and
Contact.International Business Publications-USA. (2013)
Roaf, James., Atoyan, Reuben., Joshi, Bikas & Kroguliski, Krzysztof. 25 Years of Transition
Post-Communist Europe and the IMF. IMF Publications. (2014)
