ROMANIA AND BULGARIA ON THE WAY OF INTEGRATION – INVESTMENTS ASPECTS

The present study as well as the studies produced by UNCTAD, United Nations Economic Commission for Europe1 and other institutions, reveal certain characteristics of the FDI flows in the transition countries from Central and South-Eastern Europe, applicable for Romania and Bulgaria, too: - These flows grow faster than the world average. - The FDI per capita is low compared to the values in Western Europe (2000-3000 USD) and USA (about 1800 USD). - There is a linear correlation between GDP per capita in the transition countries and the FDI level. - The main sectors initially targeted by foreign investors were the industrial sector (40-60%) and the trade sector (12-25%). - About 25% of FDI in the transition countries come from Hungary, Poland, Czech Republic and Russia. In addition to the above mentioned facts, the characteristics mentioned in the present study add to the picture we tried to present in Romania’s and Bulgaria’s case; these countries largely featured an identical evolution, no significant differences were found between them; these countries missed the start of economic transformations in early 1990s, but are trying to make up for the losses at the beginning of this new millennium, while also benefiting from a more favorable international conjuncture. The general framework for FDI attraction, of which the legal framework is a part, although now created by all CEECs, was either not completed or it was affected by instability and subordinated to political struggles, personal or group interests. Neither the institutional framework was mostly adequate and efficient in most CEECs, so that the foreign investment flows were mainly directed to three countries: Poland, Hungary, the Czech Republic. The foreign investors had a negative reaction to those countries in which political instability was manifested, which resulted in social and economic instability, often remembered in EU Country Reports. The drawbacks and frequent modification of legislation, corruption and bureaucracy have been the main disturbing factors. To sum up, it can be stated that the present development stage for most CEECs is far from the EU level in all the economic sectors. Only the five countries from CE (Poland, Hungary, Czech Republic, Slovakia, Slovenia) are closer to the EU parameters; the countries from SEE are far from completing the accession requirements. The large gaps already existing between the countries from CE and SEE would be bridged up only by an aggressive policy, of attracting foreign investors by the SEE countries with a faster rate than that in the CE, in those activity sectors that are interesting for investors; after that, by a „domino effect”, other sectors less attractive or with a higher risk level would be included in the international financial flows (e.g. agriculture). Romania and Bulgaria were generally avoided by the significant world investment flows. It is obvious that we are at fault. Only in recent years an acceleration of the investment attractiveness was experienced, with certain strategic privatizations, with largely yearly FDI inflows, with the elaboration of certain special lows for the important foreign investors; this is mostly beneficial and encouraging for the economy and it will be reflected in the future economic growth, while the economic revigoration will be possible. However, with all these positive signals and future hopes, a question still persists, namely: isn’t this start too late, is there time for bridging up the gaps or will these countries continue to remain in the future, too "second hand countries among the second hand European countries”