Eric Stab (FIC) speaks out on criticism over foreign investors in Romania: “If you are feeling stigmatized, you tend to react adversely”

Ovidiu Posirca 25/05/2017 | 14:51

Eric Stab, the president of the Foreign Investors’ Council, says that foreign investors in Romania have been stigmatized at the end of last year and the beginning of this year, underlining the fact that it is crucial for an investor to fell welcomed in a host country.

“Towards the end of last year and at the beginning of this year, we have had a number of messages, complaints by various decision-makers of this country, which were stigmatizing foreign investors. Of course, foreign investors, our members at FIC who listened to what’s being said about them. I think that one of the key aspects for any foreign investors is to fell welcomed. If you have the feeling that you are feeling stigmatized, you tend to react adversely. This is a little bit what we started to see and this is the reason why (…) beyond the emotions, populism, after the statements what counts at the end of the day is the reason,” said Stab, during the launch of a report by FIC and the Bucharest University of Economic Studies (ASE) on the impact of foreign direct investments (FDI) on the local economy.

When the protests broke out this winter across Romania, some leading political figures of the ruling coalition PSD-ALDE, suggested that some multinational firms in Romania asked their employees to take part in the protests so as to force the resignation of the government. This accusation was rejected by the representatives of the private sector. These claims were based mainly of fake news.

In addition, this spring, the head of the Social Democratic Party (PSD), Liviu Dragnea, suggested that multinationals should be “punished” if these firms don’t comply with the national legislation. This comment was made on the back of the scandal involving the rumored nationalization of the second pension pillar. NN Pensii was fined by the Financial Supervision Authority (ASF) after it notified its customers about this risk.

Romania remains behind in region on FDI per capita

The study, whose authors are Alexandra Horobet and Oana Popovici, points out that FDI companies have around 1.2 million employees in Romania, accounting for one third of the total employees in the private sector.

Furthermore, the companies based on FDI have a productivity that is two times higher compared to the one of firms with Romanian capital and invest two times more in employees.

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According to the report, Romania FDI stock stands at EUR 3,130 per capita, trailing behind Poland with EUR 5,053/capita, Hungary with EUR 8,386/capita and the Czech Republic with EUR 9,703/capita.

“Romania didn’t have a coherent strategy regarding foreign investors after 1990 and at this present we don’t have a plan to address FDI,” said Horobet.

Stab added that one of the reasons the report was published was to bring facts in reaction to potential criticism of foreign investors.

The report, based on data from official sources such as the National Bank of Romania (BNR) and Eurostat, shows that close to half of the total FDI stock, or EUR 28.7 billion, was placed in the industrial sector. Furthermore, over 50 percent of the FDI stock was generated by companies originating from The Netherlands, Austria and Germany.

 

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