#FIS2019 | Rozalia Pal (EIB): The low availability of skilled workforce is a problem across the European Union, not just in Romania

Anca Alexe 30/10/2019 | 15:36
Rozalia Pal, Country and Financial Sector Analyst in the Economics Department at the European Investment Bank, said during the concluding panel of the Foreign Investors Summit on Wednesday that the low availability of skilled workforce is an issue for every country in the European Union, and that those in Eastern Europe, including Romania, are also affected by the fact that they have lower wages than countries in western Europe. 

“Skill availability is the biggest problem across the EU – a recent survey has found that it’s biggest obstacle for 80 percent of companies in the EU, acting like a barrier to investment – among Romanian respondents, 73 percent said workforce was the biggest issue, but it ranked below the uncertainty indicator in this country.

This happens for several reasons, including rapid changes in technology and negative demographic trends. In response, countries must develop their education systems, promote lifetime learning and make serious investments in training.”

The EIB representative also spoke about foreign direct investment in Romania and how the situation has changed over recent years.

“The peak period for Romania was 2006-2008, driven by the big privatisations such as BCR, but it was a very different environment compared to what we’re seeing today. The investment flow stagnated during the financial crisis, and now we can see that the structure of FDI is changing in terms of the share of capital inflow and reinvested profits from existing investors.

Today Romania has an FDI rate of 2-3 percent of GDP, with about EUR 5 billion, but the GDP has been increasing faster than the FDI rate in the past few years. 75 percent of Romania’s export comes from FDI-related companies.

Romania has an urgent need for investment. Growth and development cannot be achieved without investment.”

Rozalia Pal also noted that 60 percent of FDI goes to the Bucharest-Ilfov area, which creates a major gap between the capital and other areas of the country. She added that the companies which have driven FDI have also brought a lot of know-how to Romania, but that at this time the country is ready to begin relying on local innovation.

She also talked about the recent upgrade of Romania’s stock exchange market to emerging status – “This is great news and we expect a major improvement as a result, but at the same time companies should understand that they need to become more transparent, while regulation must be raised to international standards. Trust is the most important element for investors,” she argued.

“In the past few years, there has been a lack of financing for emerging market, but now this trend is reversing at the global level, which means that liquidity may begin to flow back to emerging markets.”

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