i. Communism
Romania was formerly a part of the USSR (1947-1989) until
the death of Nicolae Ceausescu, an “oppressive and draconian” dictator<1>.
Ceausescu had focused almost exclusively “on rapid industrialization at the
expense of other areas, especially agriculture.”<2>
Plenty of government investment went into the petrochemical industry but almost
nothing went into food, electricity, or consumer goods. The transition from
communism has allowed Romania to update its industrial base and realign its
production to suit the country’s needs, including immense agricultural efforts.
However, the post-communist era has resulted in much of the unemployment;
previously too many people had been employed to do too little, thus,
over-employment.
ii. Surrounding Countries
As previously stated, Romania borders Bulgaria, Hungary,
Moldova, Serbia and Montenegro, and Ukraine. Hungary is currently the only
border country in the European Union, so it would be Romania’s gateway into the
rest of the EU. However, Bulgaria is slated to join at the same time as Romania
(Appendix B).
iii. European Union
If all goes according to current plans, Romania is stated
to join the European Union in 2007, along with Bulgaria. By joining the 25
current member nations, Romania would have completely open borders with the
majority of Europe. This means free exchange of capital, labor, goods, and
services. This would specifically help them avoid protectionist practices by
other nations. All import duties between member nations have been abolished for
products like rebar. Also, all EU import duties have been “harmonized” so that
they will be the same for imports into any member nation from outside of the
EU. The European Union has strict standards in terms of economy and human
rights to which its member states must adhere. Due to their desire to join the
EU, Romania has been forced to institute reforms.
III. Implantation
Implanting a Canadian company in Romania involves much
advance preparation and necessitates some changes to normal business practice.
One must know about the culture, purchasing land, raising capital, employment,
and any incentives available to encourage foreign direct investment.
i. Culture
Culture clash can result in lost deals, a damaged image,
and possible problems with local governments. Especially with new territory,
businesses like Harris Rebar should pay attention to research. As with any
country, when implanting in Romania, one needs to know about the language,
local business etiquette and practices, religion, and holidays.
<1> CIA
Factbook
<2> “Romania:
History” Fact Monster http://www.factmonster.com/ce6/world/A0860790.html