Romania - COUNTRY PROFILE
Geography
Covering a total of 237,500 sq km, Romania is the largest country in the Balkans. Its longest border of 608 km is shared with Bulgaria to the south. A 450 km border along the Prut River with the Republic of Moldova splits its 531 km northern border with the Ukraine. To the north-west lies a 476 km border with Serbia, while its western border with Hungary stretches 443 km. Romania also has 225 km of Black Sea coastline, providing it with access to the Mediterranean Sea through the Turkish Straits.
Romania is divided into six distinct regions. Transylvania, the country's largest and most varied province, extends throughout central and north-western Romania and includes most of the country's mountains, the Transylvanian Plateau and the north-western plain. Bukovina, north-east of Transylvania, is a thickly forested region in the Moldavian Carpathian Mountains. Moldavia, Walachia and Banat share a similar physical make-up, where the landscape transitions from mountains to hills and then to plains as one heads south. Finally, Dobruja is a small, marshy plain where the Danube River ends its meandering 2850 km journey through Europe north of Romania's largest Black Sea port, Constanta.
Lying in the north-eastern portion of the Balkan Peninsula, Romania's climate serves as a transition between the temperate Mediterranean and cooler Continental climates, with hot summers, cold winters and abundant precipitation. Average temperatures range from 5 to 25 C, with significantly cooler temperatures prevailing in the mountains.
Recent History
Romanian independence from the Ottoman Empire was secured in the form of a constitutional monarchy following the Russo-Turkish War in 1877. After maintaining neutrality during the first two years of World War I, Romania joined forces with the Triple Entente, declaring war on the Austro-Hungarian Empire. Treaties that brought the war to an end granted Romania control over additional territory including Transylvania. December 1, Romania's national day, celebrates the declaration of the "unitary Romanian nation-state", which marked the unification of Transylvania with Romania in 1918.
World War II also began with Romanian neutrality, but by June 1941 Romanian troops were fighting alongside those of Nazi Germany in the invasion of the USSR. With the German defeat before Stalingrad and the Red Army advancing into Romania in 1943, pressure grew on Marshal Ion Antonescu to reconsider his alliance with the Nazis. Finally, a military coup in August 1944 overthrew the Antonescu regime and Romanian troops were placed under Soviet command.
Soviet occupation following World War II led to the abdication of the king and the formation the People's Republic of Romania in 1947. Following the death of Romania's post-war communist leader Gheorghe Gheorghiu-Dej in 1965, Nicolau Ceausescu began an increasingly oppressive 24-year reign. A week-long series of riots and protests in late December 1989 triggered the overthrow and execution of Ceausescu, and his wife, Elena. Still subject to much controversy, the period is often referred to as “the stolen revolution”. Although it was the only violent overthrow of a communist regime in Eastern Europe, it did not produce profound regime change, with most of the former communist leaders hanging on to power throughout the transition period.
Ion Iliescu, the father of modern Romanian politics, was in power for 11 of the 15 years of that transition, along with the Social Democratic Party (PSD). This extended rule finally came to an end when Traian Basescu, the former mayor of Bucharest, defeated the PSD prime minister, Adrian Nastase, in the second round of the most recent presidential election, which was held on December 12, 2004.Government and Politics
Major Political Players
Traian Basescu: President since the start of 2005, this former sea captain ended a long period of political hegemony by the PSD. Formerly mayor of Bucharest, he has pushed an anti-corruption, pro-reform agenda.
Calin Popescu Tariceanu: Prime Minister of the new Justice and Truth Alliance (ADA) government, by mid-2005, he was increasingly at odds with President Basescu, particuarly over the need for fresh elections. He is also faced with the sometimes difficult task of pushing through parliament reforms required by the European Union if the country is to acceed in 2007.
In accordance with the constitution adopted in 1991, Romania is a parliamentary republic. Its bicameral parliament consists of a 140-seat Senate and a 345-seat Chamber of Deputies. Members of both bodies are elected by direct, popular vote on a proportional representation basis to serve four-year terms.
The president appoints the prime minister and the government, and those appointments must win the approval of a majority of parliament.
At the December 2004 polls, despite winning the majority of seats in the Chamber of Deputies (131, compared to 112 won by the opposition), the former ruling Social Democratic Party (PSD) was unable to form a government. The socialist coalition fell apart after the newly elected president, Traian Basescu, made it clear he was not going to accept a socialist prime minister. Subsequently, he gave a mandate to form a government to current prime minister, Calin Popescu Tariceanu of the Justice and Truth Alliance (ADA), a coalition of the Democratic Party and the National Liberal Party.
While recent co-operation with the United States in its war on terrorism helped Romania to become a member of NATO in April 2004, slow progress on economic and political reform has left Romania off a list of 10 countries that could assume EU membership in 2004. Along with Bulgaria, Romania is expected to complete negotiations and join the EU at the start of 2007.
Population
While the "Old Kingdom", colonised by the Romans in the second century AD, was a relatively homogeneous area, the subsequent ebb and flow of empire, migration and displacement has introduced a moderate degree of ethnic diversity. Transylvania, in Romania's north-west, remains the country's most diverse region, settled by the Magyars and the Szeklers (two Hungarian groups) in the ninth century. The ethnic German population is also concentrated in Transylvania. In the 19th century, Jews from the Austro-Hungarian Empire and Poland settled in Moldavia. The world's largest Roma population can also be found in Romania.
Under communist rule Romania's minorities were granted nominal rights, on the condition that they support the country's socialist structure. They were, however, not given a substantial role in the running of the state. The situation worsened considerably under Ceausescu.
The country's current population of 22.3m is predominantly Romanian (89%). Minorities include Hungarians (7%), Roma (2%), and small populations of Germans, Slovaks, Turks, Russians, Bulgarians, Croats, Tartars, Czechs, Greeks, Armenians, Poles and Albanians. Most Romanians are Orthodox Christians (87%); Catholics of the Oriental and Roman rites are well represented with 5.6%. Reformed Lutheran, Unitarian, Protestant, Armenian, Muslim and Jewish communities comprise the rest.
Fifty-six percent of Romanians live in an urban setting. The nation's capital, Bucharest, is the largest city with 2.5m inhabitants. According to the 2004 United Nations Human Development Index Romania ranks 69 out of more than 170 countries, with relatively high adult literacy rates of 97.3% and life expectancy rates of 70.5 years, offset by low income levels.
Economy
Despite more than 10 years of post-Cold War economic reform, Romania remains one of the poorest countries in Central and Eastern Europe. Like other former Warsaw Pact members, Romania began the transition from a Stalinist economic plan with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Its efforts to transition toward a market-driven economy in the early 1990s got off to a rocky start with a drastic fall in GDP. In order to mitigate the severity of the economic downturn, large state subsides were handed out to companies, which lead to budget deficits, inflation and an overvalued leu, the national currency. Market development was hindered by the state's efforts to slow industrial privatisation. Regulations regarding contractual relationships, private property rights and price liberalisation remain ambiguous, incomplete or altogether absent. Over the past decade living standards have fallen with real wages averaging $130 per month, a 40% decline. Between 2000 and 2002, GDP growth averaged 5.3%. These numbers have remained strong through 2003 and the first half of 2004, remaining constant during 2005.
Despite the disappointing track record to date, a cautious optimism has begun to emerge, as many investors believe Romania has turned the corner. The country emerged in 2000 from a punishing three-year recession thanks to competitively priced exports and strong demand for Romanian products in EU markets. Strong domestic activity in construction, agriculture and consumption led to 4.9% growth in 2003 despite the worldwide slowdown. In the first few months of 2004 the growth rates for industry (6.6%) and construction (7.2%) have shown a lot of hope for this year. Inflation is edging down and the state is in the process of selling off inefficient concerns. A standby agreement with the IMF covering the period from October 2001 to March 2003 helped smooth the bumps of privatisation, regulatory reform, deficit reduction, and the curbing of inflation. A new standby agreement was announced May 2004 and was signed in July. The money from this agreement is only to be used in emergency situations. This agreement will last for 24 months, ending June 2006.
A major concern for both 2004 and 2005 has been consumer debit. While the increase in purchasing has helped the economy by generating growth and increasing sales of local products, many fear that this new spending behaviour will cause many negative macroeconomic effects.
Romania has agreed to a country assistance programme with the World Bank for 2001-2004. The lending programme is aimed at structural reforms including the shoring up of the country's social net, increasing investment in health, education and rural development, and reforming the financial sector.
The biggest test, and one watched closely by international lenders, is Romania's privatisation programme. A Private Sector Adjustment Loan (PSAL) worth $300m from the World Bank has been devoted in large part to the privatisation of more than 1500 small- and medium-sized state enterprises. These steps are essential for transitioning to a more competitive, market-driven economy. However, concerns over the pace of change in this area have begun to emerge, with question marks beginning to appear as regards the country's ability to meet its reform commitments.
