Thank you, Daniela. I am recently arrived in Romania so to have this opportunity to spend some time with you this morning is a great one and I’m thankful for your invitation for me to be here this morning.
Members of the Board of The American Chamber of Commerce in Romania, distinguished guests, ladies and gentlemen thank you for asking me to speak here today. First, I would like to congratulate The Chamber on receiving the 2015 Creative Network Award from the European Council of American Chambers of Commerce. This award is rightful recognition of the excellence of The Chamber’s work here in Romania, including assembling this conference this morning.
As I prepared for my mission in Bucharest and then since arriving, just a couple of weeks ago, I am struck by Romania’s great potential, and notice its commitment to improve the investment climate. As President Iohannis recently stated to the European Times: “Let us remember that the achievements of companies and investors directly depend on the quality of rules governing their activity. Ensuring transparency and stability, as well as fiscal and legislative predictability, continues to be one of our main objectives.” As Romania tackles necessary reforms, establishing a solid foundation for sustainable growth, the United States will be an unwavering partner for all stakeholders, including the government, parliament, business community, and civil society in this joint endeavor.
We can reach our common goals by concentrating on three cross-cutting themes: security, democracy, and prosperity. Whether in our U.S.-Romania Strategic Partnership Dialogue, within NATO, or other multilateral fora, Romania has shown that it is a true ally, committed to democracy, security, and prosperity for its citizens in a Europe whole, free, and at peace. Romania has made significant contributions to international peace and security, both in Europe and far beyond.
However, security transcends military and law enforcement cooperation. Security encompasses rule of law, energy security and diversification, as well as sustainable economic growth. This multidimensional nature of security is captured very well in the National Security Strategy crafted by President Iohannis earlier this year.
Just as security is cross-cutting, so is democracy. Democracy is the bedrock on which citizens build vibrant societies, cultures, and economies. Romania’s ongoing anti-corruption efforts are a testament to the country’s commitment to democratic values, and to ensuring that all citizens can prosper through honest, hard work, rather than nepotism or membership in unscrupulous patronage networks.
And prosperity or economic opportunity for all citizens is also paramount – without it, vibrant societies cannot flourish. Increased investment and trade will play a key role in ensuring the prosperity of Romania’s citizens and the country’s sustainable economic development. Security, democracy and prosperity.
Romania is blessed with considerable resources. With a highly educated, multi-lingual, tech savvy population, Romania is well positioned to attract investors, and to serve as an investor’s launch pad for the region. Romania is also fortunate to have diversified natural resources – energy, agriculture, forestry. Lastly, Romania’s strategic location offers great potential. At the border of the European Union, it is also at a crossroad – North, South, East and West. Realizing that Romania’s location offers the promise of increased economic ties with EU aspirant nations and beyond, smart investors would seek out a transparent, stable and predictable Romania. Romania therefore should seek, incentivize and secure investments that would ultimately benefit its citizens through jobs and access to secure energy.
Romania understands this great potential and the need to improve its investment climate. The evidence of this is clear. The government of Romania reflected on stakeholders’ requests for greater transparency and acted to implement stakeholder consultations. By working with the Coalition for Romania’s Development, – Coalitia – the American Chamber of Commerce, the Foreign Investors Council and others on fiscal and regulatory regime changes, the government has signaled its commitment to transparency. Notably, the government’s adoption of two separate Action Plans for Good Governance in Economic Matters shows its willingness to work proactively on these issues. Improvement of the business climate is also an important element of the US-RO Strategic Partnership.
But, Romania’s work remains unfinished. For security, democracy and prosperity to thrive over the longer term, the government and the parliament must continue reforms focused on sustainable development and a full adherence to the rule of law. Building and maintaining investor confidence is essential for new investments to be made and for existing investments to pay off and to expand. To ensure this, the state has to prove itself a reliable partner for all investors both at a policy level and in terms of policy implementation at a company level. As Romania’s regulatory climate still lacks cohesion and long term vision, Romania must tackle this challenge by passing and implementing regulation in a transparent, predictable and stable manner. Continued improvement of, and dedication to, across-the-board consultations with stakeholders would benefit all parties. The government has stated its commitment to transparency. It should now move forward with implementing transparent consultations for all contemplated policy and regulatory changes. Genuine consultations will strike a balance between short-term budgetary needs and social protection, and the overarching goal of fostering the investment that the country needs to grow sustainably. Investors will be reluctant to invest or to expand unless they feel that their voice is heard and that, when making changes, the government and the parliament fully consider the effect that their decisions will have on investment.
Reforms are possible in all economies and Romania’s is no exception. Romania needs structural reforms, robustly and fully implemented, that will increase labor market participation, reduce regulatory barriers, encourage greater entrepreneurship, and open sectors to more international competition and investment. These reforms include improvements to the country’s infrastructure, a deepening of the technical and administrative capacity of the fiscal and public administration, and the privatization of state owned enterprises through initial public offerings. In the long run, such reforms will bring much needed sustainable economic growth and greater opportunity for all Romanians.
Lastly, Romania must break the cycle of political influence in economic decision making. 2016 is a double election year and it offers the opportunity of being a watershed for Romania.
I call on Romania’s leaders to set an example for the future – put aside short-sighted political concerns and focus on the long term good of the country when enacting new or revisiting existing legislation or regulations; stop meddling in the management of state-owned enterprises for political gain and allow these enterprises to operate according to good business practices, so that all Romanians reap the benefits; and robustly and publically defend those prosecutors pursuing corrupt actors, and vocally support an independent judiciary.
United States and Romania are deep and abiding allies. During my tenure here, I will work on increasing trade and investment between our two countries. Romania’s potential is great, I am convinced, but so too are the reforms that it must undertake to realize it.
I encourage Romania to embrace the cross-cutting themes of security, democracy, and prosperity as essential tools to realizing its potential. These are the key ingredients that foreign and Romanian investors, private and state-owned, look for to invest their limited capital. We support Romania’s work to ensure it has a solid foundation for sustainable growth, grounded in a transparent, predictable and stable investment climate, and reinforced by stakeholder consultations and sound corporate governance.
And, we will do it because, as vice-president Joseph Biden said, “It’s no longer just what we can do for Romania, it’s what we can do together” for both Romania and the United States.