Raising Romania's Private Sector Potential for Greener Growth
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The Romania Country Private Sector Diagnostic (CPSD) explores how Romania can harness private investment in critical sectors to reignite sustainable economic growth and social inclusion. Romania has made impressive strides in economic performance over the past two decades, as EU integration helped accelerate income convergence towards the bloc’s average. Yet the shift towards sustainable, well-governed, and inclusive economic growth remains in progress, with headwinds for the private sector. Substantial internal inequalities exacerbate the country’s challenges and highlight the urgency of expanding access to economic opportunities and better jobs. Two recent shocks and two impending transitions further highlight both existing gaps, and opportunities for a more inclusive, resilient, and sustainable private sector−led growth model.
First, the CPSD outlines some of the most important challenges faced by private actors, including the need to (1) have an adequately educated workforce to strengthen innovation in the economy, (2) improve the business environment, especially deficiencies in governance, (3) tackle impediments to competition distorting market outcomes and hampering the efficient allocation of resources, and (4) improve essential infrastructure (e.g., in energy and transport).
Second, the core part of the report focuses on how the private sector can help close gaps in three crucial sectors that impact the whole economy, identifying short- to medium-term opportunities for private sector growth and enhanced service provision across the country. These three critical sectors are: (1) the energy sector, with a focus on renewables; (2) the transport sector, across multiple modalities; and (3) the financial sector, with an analysis focusing on inclusion through digitalization on the one hand and the sector’s readiness for the green transition on the other.
Finally, the CPSD showcases three short “tradeable opportunity highlights” — focusing on industry, services, and agriculture, respectively — outlining how improvements in the three key enabling sectors could expand opportunities for trade across the economy.
