October 30, 2020, 10:00-11:00
Bucharest Marriott – Grand Ballroom
Good morning everyone. It’s great to see so many great business leaders today – both in person and the many more joining us virtually. It is truly a pleasure to join President Florin Jianu and the National Council of Private Small and Medium Sized Enterprises as we honor entrepreneurs and companies for their amazing achievements this year. Romania is a country full of entrepreneurs-today is the 28th edition of this ceremony- meaning that only two years after the fall of communism 30 years ago, small- and medium-sized businesses were taking off in Romania. Just think how far you have come since then. You will go further – if you can think it, you can do it!
The United States has long supported Romania’s entrepreneurial and private sector development. As you know, promoting mutual economic prosperity is a core pillar of our Strategic Partnership, and something I take very seriously. I am convinced a healthy entrepreneurial environment is key to building and sustaining democracy. We know that when entrepreneurship increases, market-based economic growth, innovation and prosperity follow. We proudly support the National Council’s efforts to promote market-based entrepreneurial development.
Since my arrival in Romania, I have spoken many times about the Romanian Renaissance. Romania is on the path to becoming a European leader in finance, industry, agriculture, science and the arts. I have never wavered in my belief that Romania can do great things and I firmly believe Romania can be a world-class leader and a model for the rest of the region and all of Europe.
Thirty years ago after the fall of communism one of the first things that was done was to privatize many state owned businesses and enterprises. That was a good first step but the job was not finished. Today, Romania has the highest number of wholly owned state businesses in Europe – over 1200. It also has the highest number of partially state-owned businesses. Romania must pursue divestiture and a path to full privatization.
Government lacks the skills to efficiently and profitably create and operate businesses. Such state-owned businesses are a source of political patronage, the repository of the politically connected, family nepotism or other mediocrities. State owned businesses are a drag on the economy, foster corruption, stymie competition and impede economic growth. It is virtually impossible for private businesses to effectively compete with state owned businesses. It has been well documented around the world that free markets, private economies have developed more wealth and prosperity for their nations and people than any other system.
A healthy entrepreneurial environment takes amazing and talented people, such as you here today, representing all corners of Romania.
But that is just the first step, a seed, if you will. What is also needed is an environment in which the seeds of your ideas and hard work take root. This entails three items: strong protections for intellectual property, the rule of law and common-sense business regulations.
Without intellectual property rights, there is really no incentive to innovate. People have no incentive to work hard and develop products and services if they know the fruits of their labors will be stolen by companies in China and other countries that show little regard for intellectual property rights. It was no different under Communist rule here, when the talents and labors of the Romanian people all went to support a corrupt ruling class.
The second condition necessary for a thriving entrepreneurial environment is the rule of law – a legal system that is predictable, consistent – with enforceable rights – and transparent. True entrepreneurship cannot thrive in an environment where there is no recourse for addressing legitimate business concerns, where there is no predictability in the markets and where the personal whims of the well-connected and corrupt can undermine a fair judicial process. Once investors feel confident of a safe and secure system of laws, their money will become much more available to entrepreneurs such as yourself.
Finally, the last action needed for thriving entrepreneurship is for the government to get out of the way. Government should have only common sense regulations, reduce corporate taxes and create a business friendly environment. Under the leadership of President Trump, we’ve done this in the United States. As a result we have had the best economy and lowest unemployment numbers in its history. This approach has encouraged companies from around the world to invest in the United States.
Romania too can create an environment conducive to a stronger business climate. I applaud the efforts of President Iohannis and Prime Minister Orban in working to achieve this goal and I strongly encourage the government to redouble these efforts. When Prime Minister Orban took office, he was hindered by the ill-considered changes to laws and cronyism which infested Romania’s economic system. Despite these setbacks, his government has worked hard to create the proper legal and economic environment that will lead to Romania’s Renaissance, and the United States will stand by Romania’s side to bring this to fruition.
The Covid-19 pandemic has confronted both our countries with enormous public health and economic challenges. The economic and social damage wrought by this virus has been unprecedented and the path to full recovery from the crisis will no doubt be long and hard. This is a tragedy for all of us, and my sincere condolences to those of you who have lost someone dear to the pandemic. However, if we are to achieve a new normal, it will be due people such as yourselves, who use your talents and hard work to create solutions to new problems, so people can return to work, so children can receive the proper education they deserve and so those in need can receive appropriate health care. My faith in the Romanian people is absolute and I have no doubt that Romania, and you, can accomplish anything you set your mind to. This country holds magnificent potential. Investments in proper infrastructure, establishing common sense business regulations and enforcing the rule of law will unlock this potential and accelerate the realization of the Romanian Renaissance.
Thank you for the opportunity to speak to you all today and my heartfelt congratulations to the winners, and to all of you who are exhibiting the best of the entrepreneurial spirit. I wish you all the best in your future business endeavors.
Thank you and God bless you.