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City Guide > Europe > Romania > Bucharest | |
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Business Business Profile Communism – particularly under the regimes of Gheorghe Gheorghiu-Dej and Ceausescu, during the 1960s – attempted to force Romania to become a heavy industry economy, transferring people from rural to urban areas to work in factories. But the country lacked the necessary energy resources for this shift. Romania had been one of Europe’s biggest oil suppliers during the 19th century, however, production decreased considerably, exacerbated by the earthquake of 1977, with its epicentre in the main oilfields of Ploiesti, near Bucharest. Ceausescu, nevertheless, continued to pour huge amounts of money, borrowed from Western credit institutions, into industry, power projects and grandiose building schemes, resulting in a massive trade deficit by 1980. Attempting to pay off these debts, the standard of living plunged, as Romania reduced imports by one-third and increased exports of vital materials, resulting in drastic shortages of oil, food, energy and medicine, and setting the scene for the 1989 revolution. Recovery has not come swiftly. Industrial output continued to decrease throughout the 1990s, causing widespread and long-term unemployment, while increased imports resulted in massive inflation, averaging over 100% annually, between 1991 and 1998. Today, however, with an eye to joining NATO and eventually the EU, market reforms and the encouragement of foreign investment are showing a significant effect. Inflation figures slowed from 44.9% to 34.5% between 2000 and 2001, and are expected to be 25% in 2002. The average income, less than US$100 per month in 2000, is now US$148, with unemployment at 9% (6.5% in Bucharest itself). Many people have returned to now privatised agriculture, which accounts for 20% of the GDP, while industry, still struggling with structural reforms in energy, accounts for 36%) and services 48.3%. The IMF estimates an overall growth rate for Romania of 4.5%, the highest among EU candidate countries. Bucharest is Romania’s main communications and industrial centre. A modern business district is now blossoming in the massive buildings that were once Ceausescu’s Civic Centre. Some of the largest multinational companies in in the city are in oil (Shell, Texaco and Agip), automobiles (Renault/Dacia and Nissan) and IT (IBM and Microsoft). Other key industries are agricultural machinery, transport equipment, textiles and clothing, chemical products, construction materials, furniture, footwear and wine. The ministry of IT&C services is actively deregulating the telecommunications market and, as of April 2002, a subsidiary of UK mobile phone giant Orange, Orange Romania became the main shareholder in the previous Mobil Rom S.A – working in junction with Alcatel to develop the first UMTS on air operation in Central and Eastern Europe. The tourist industry is strongest on the Black Sea coast and the Poiana Brasov ski resorts but is very much on the back burner in Bucharest. Business Etiquette Romanians are sociable and love to talk, so mobile phones are a must for doing business in the city. People are extremely friendly and a surprising number speak excellent English, although the older generation may prefer French or German. However, Bucharest natives are also extremely formal, in the old European sense, and business visitors should respect this tradition, making appointments for meetings well in advance. Punctuality is important and suits are expected. On greeting it is customary to shake hands and business cards are often exchanged. Business lunches may take two hours, with wine or beer the most popular tipple. Work colleagues may socialise together in the evening at a local bar, although this tends to take place more among those working in multinational companies. It is relatively uncommon for Romanians to invite foreign businesspeople to their homes. Should this occur, gifts such as flowers, chocolates or high quality Scotch will always be appreciated. Summertime is not good for doing business as many companies go into hibernation. Easter and Christmas are also difficult, as companies and shops close down for an indefinite period. Normal business hours are 0900-1700. |