Romania ranks 79 in global change readiness index

Romania ranked 79th in the Change Readiness Index (CRI) prepared by KPMG International in partnership with Oxford Economics from a total of 127 countries surveyed (expanded from the 90 countries surveyed in 2013). The CRI measures countries’ capacity to prepare and respond to accelerated change brought about by economic and political shocks or long term trends such as demographics and new technologies, as well as natural disasters.

Singapore has maintained its number one ranking from 2013, while Northern and Western European countries dominated the top 20 overall. The ten countries to have reached the top are: Singapore, Switzerland, Hong Kong, Norway, United Arab Emirates, New Zealand, Qatar, Denmark, Sweden and Finland.

Romania, the survey says, has improved its overall CRI score since the last survey in 2013, which is built on three main pillars: enterprise capability, government capability and people and civil society. Romania scores best for the people & civil society capability, although this is the only major category for which the country’s score has fallen compared with the last survey.

Although income is an important trigger for increasing change readiness, Romania is outpaced in the CRI ranking by 13 lower-middle income countries and even by 5 low-income countries from Africa. Romania belongs to the Eastern Europe and Central Asia group of countries, and is included in the upper-middle income countries category. In its group, it ranks 14th out 16 countries.

Romania is ranked 79th for enterprise capability which reflects the soundness of a country’s business environment. Romania performs better in terms of technology infrastructure (50th place), economic openness (51st) and labor market flexibility (61st). The subdivision in this category which is cause for concern is innovation and R&D for which Romania performs badly (109th), due to poor financing and cooperation between research institutes and industry. Romania also scores poorly for business environment (95th place) reflecting difficulties in starting a business; the degree of government regulation, property and contract laws, taxation, and investor protection. Romania also performs badly in the financial sector (93rd), as this indicator mainly measures the efficiency of funding to enterprises and entrepreneurs.

Government capability is Romania’s weakest pillar in the change readiness index, for which the country ranks 86th, mainly because of poor government strategic planning as well as suboptimal fiscal and budgeting management. Romania also ranks weakly in terms of responsiveness to environment and climate change as well as food and energy security. Romania has shown signs of improvement in terms of bureaucracy, positive regulatory policies and a more stable macroeconomic framework, for which it is placed near the average of the classification.

Although the score has fallen since the last survey, people and civil society are Romania’s strongest capability, taking 62nd place in the ranking. The country’s weakest point lies in its demographics, as it is ranked last but one (126th out of 127), due to a low fertility rate and high migration. Romania ranks well in terms of technology use, inclusiveness of growth and good health, due to high life expectancy at birth (74,6 years) and a low infant mortality rate.