Economic GROWTH FUELED BY THE PRIVATE SECTOR
would be difficult to enter into a conversation in Romania concerning
the state of the nations economy without
uttering the buzzword of the day: privatization. The topic is on the
lips of government officials,opposition
leaders and those citizens employed in every sector of the economy.
Nastase points out that all this is necessary in order for Romania to
become a member of
the European Union, probably just five or six years from now. We
have to prepare our economy to be powerful and strong enough to counterbalance
some of the pressures on the EU market, he says. Thats
why we are not in a hurry to get in. We have to prepare ourselves. We
want to use the transition period in order to prepare the economy, to
modernize it, to solve some of our problems, to introduce EU legislation
wooing foreign enterprises, Romania can now point to the recent economic
turn-around, and a series of steps taken by the government to improve
the investment climate. Not only was the economic contraction of recent
years reversed in the first half of 2001, when a healthy annual growth
rate of over 4% was registered, the Prime Minister notes, we have
twice received a credit rating upgrade from Standard and Poors,
we have succeeded in putting together over US$1 billion in Euro-bonds,
we have adopted a very modern law on direct investments, and have undertaken
significant privatizations, like Banca Agricola or (the steel company)
also acknowledged that the government would be taking a closer look
at the management of the companies preliminary to privatization, so
theres something left to privatize and review the programs
methods and implement new ones where needed, such as capital injection
to increase investor interest.
the time of going to press, the sale of the company to LNM Holdings
Ispat had just been finalized, pending approval from the Romanian parliament.
As Sidex general director Dan Nicolae Soiman says, the
fundamental issue in the entire privatization process was to increase
the capital of the company, which will ensure that Sidex becomes a major
global player in the iron and steel industry.
Besides Sidexs production capacity of over 5 million tons of steel per year and the variety of its products, the companys geographic location has been a major selling point, Mr. Soiman notes. Our location gives us access to river and sea transportation. We are right beside a huge coal source, namely Russia. The area also has a highly-qualified workforce and the tradition of the iron and steel industry there goes back a long way. And to ensure a better future for the company, we have built professional schools and universities and we also provide training. Dr. Nastase comments that the privatization of Sidex has clearly demonstrated the governments commitment to liberalizing the economy. The deal with LNM Holdings Ispatwhich has committed to invest US$351 million in the company over the next ten yearswill help finance the modernization of Romanian plants.
In the congratulatory letter to the Prime Minister of Romania, Tony Blair stated that the event was a major step forward in the efforts of the Romanian government targeting to restructure and to modernize the Romanian economy. "I hope this event will stimulate the renewed interest of the British investors in Romanian. Moreover, I believe this event will place Romania more firmly on the road towards European Integration" added the British Prime, highlighting that the UK is a strong supporter of this objective.