Governance and corruption are Romania’s biggest problems identified by a report by the Legatum Institute, which looks at the path from poverty to prosperity, based on data from the International Monetary Fund, World Bank, and other institutions.
The analysis, which was carried out with the support of the Templeton World Charitable Foundation, shows that Romania has reasons to be optimistic about economic development, but the inefficiency of governance, endemic corruption as well as poor infrastructure, hold the country back.
According to the report, Romania finds itself in a contradictory situation where it can boast of a solid basis for development, but almost every area under consideration is affected by corruption. At the national level, the development of infrastructure is jeopardised by the possibility that Romania could be cut off from EU funds because of its failure to respect the rule of law.
Since the fall of communism, says the report, Romania has built a multi-party democratic system, increasing living standards compared to the Ceausescu era and has obtained NATO and EU membership. These events have marked a large-scale economic opening and are a solid foundation for even more consistent growth.
But the report warns that Romania continues to fall short of meeting its potential. “Corruption is holding back Romania and obscuring the path to prosperity, eroding confidence in its future among its public-spirited citizens, among potential international investors, and the EU,” the report said.
“Several million people have moved abroad since 2007, equivalent to more than a fifth of the workforce including many of the brightest young Romanians, and, like those left in the country, they desperately want Romania to be well governed, free of corruption, and prosperous,” the Legatum Institute says in the analysis.
“Efficient and effective governance is at the center of an open and powerful economy. Real progress will need a cultural transformation – removal from corruption and adherence to the rule of law,” the report concludes.
