Organize specific industrial zones, stop bureaucracy and promote Romania to European industrialists as “China at your door” | Ilias Papageorgiadis’ blog for Real Estate in Romania (and not only)

Organize specific industrial zones, stop bureaucracy
and promote Romania to European industrialists as “China at your door”

Friday, July 2nd, 2010

Part 2 of the text with title
Low Cost proposals to help Romanian economy exit the crisis:
4. Expensive Yuan. The big opportunity of Romania to become “China of Europe”
(to read part 1, please press here)

Proposal: Organize specific industrial zones, stop bureaucracy and promote Romania to European industrialists as “China at your door”.
I consider the moment as a great opportunity for Romania to reposition itself in the world map of investments. Now that several thousands of companies will start thinking about leaving China (in the following years), we need to organize and present a feasible solution to them:

We should decide what kind of investments we want and in which places of Romania. I don’t refer only to huge investments, but also to any investment over 3 million Euro, probably their existence is as critical as the presence of just 3 - 4 giants.
We should choose the areas which need / can be developed by industry.
The whole project, including the de-construction of bureaucracy should be properly “packaged” and promoted around Europe, informing the investors for the new “friendly for investments” business environment of Romania.

Proposed measures

There is no need to reduce not even one tax, in order to bring investors. What the politicians have to understand is that foreign investors don’t go only where the taxes are lower, but where the “whole package” is satisfactory. Business environment, bureaucracy, appropriate workforce and other factors are equally or more important than just the level of tax.
A company like a big multinational consulting firm or any serious local can easily study the country and its potential and propose what to develop where. If something like this already exists, even better, we can use it.
Like this, each investor will know automatically that “if he wants to invest in this, this and that, he can do it in this, this and that city or area”.
In each city which will be chosen to host a development, the State should choose an area where industrial development will be welcome.
This area can be either one which belongs to the State, but preferably it should be given the possibility to major international industrial developers to develop private zones, with State’s approval and help.
These zones will be ready to host investments. The municipality will not allow to investors to develop the same type of investments elsewhere, in order to finally create “industrial parks” around the country. These will be available not only for foreign investors, but ofcourse for local ones too.
More results are expected in the field of European Grants. Unblocking the money for investments and also for training the workforce will boost the economy and will make the investments “more attractive”.
But what happens to the companies which will not be able to get enough Grants? The solution is simple and it is implemented in many other countries: It may deduct the cost of investment from its profits, up to a level ofcourse. Like this the owner will know that either he gets the Grants or not, he will be able to get back his approved amount from his profits. (So, either you get your money directly from the Grants or you receive it back as part of your profits, as it happens elsewhere).
A special office should be created, a “one stop shop” for all investments over 3 million Euro. It should evaluate each project, reply in 2 months maximum and solve all issues with local bureaucracy, no matter where the investment will be placed. In Turkey you apply for an approval of a new hotel and you get the answer in 30 - 45 days. Why here to need more time?
The whole approach of promoting the country’s potential should be reorganized. Now, like Greece does as well, usually in 60 - 70% of the cases people travel abroad just for… “vacation”, without fighting to convince investors to come in the country, without plan or even strong solid arguments. We need professional work and approach, accurate feedback to the investor and proved ability to assist him to solve all problems.
This new professional work should be combined with a strong collaboration with all the bilateral chambers of commerce, organizing events at their mother country, promoting Romania there as an important host of major investments, a business hub.
We should target especially to all the companies which consider Western European markets as their priority. They will be very interested in having their production quite close to them, keeping their costs low and having maximum flexibility.

Results

Romania will return to the European map of investments, with strong potential to attract major investors once more.
This project needs time, but if we don’t start now, we will not benefit in the following 1 - 2 years.
Thousands of investors will be “liberated” to invest fast in the field of activity they wish. Today they are blocked due to expected money by Europe, or by a ministry or due to the several restrictions and delays for authorizations.
The State will benefit the most, with taxes on incomes, social insurance taxes, vat paid for the materials bought etc.
New wealth will be created in a healthy way and it will be spread to thousands of people. Thousands of new jobs, higher incomes for an endless number of professionals. Exactly what happened in the past, when the thousands of foreign investors contributed dramatically to the improvement of the life of millions of Romanians.
Romania will be ready to benefit from the “wave of investments during this world economic crisis”. “Close to your markets, but still in very competitive costs” can be a slogan and Romania will be able to be in “game” of new investments, preparing itself during 2010 - 2011.
The G20 leaders just decided for a longer period of “austerity” measures, in order to cut their deficits to half in three years. It is a good chance for Romania to offer to investors several different solutions in order to avoid the their problems and provide their clients with products of good quality, but not expensive, being produced just few hours away.

Let us change and improve this country for good. It is easier than you expect, if we just want it.