Romania Launches New Drive to Build the Small Business Sector

11/09/2002 - The small business sector in Romania has the potential to drive economic growth provided certain reforms are taken by the country to facilitate business development, according to a newly published report by the OECD and European Bank for Reconstruction and Development.

In Entrepreneurship and Enterprise Development: Romania, the OECD and the EBRD chart the progress made in Romania towards establishing a strong small and medium-sized enterprise sector. The two institutions conclude that there is room for further reform towards unlocking as yet untapped entrepreneurial potential. By developing a stronger SME sector, they argue that Romania will spur economic growth and create jobs.

The report suggests ways in which Romania could enhance its small business sector without necessarily requiring major financial commitment from the state budget. In particular, the OECD and EBRD urge for greater stability in the institutional environment of the SME sector as well as closer co-operation between government policy makers and the small business community. They suggest the creation of an effective network of business support centres and the simplification of business procedures and tax systems. They also advocate measures to ensure the independence of the newly created State Guarantee Fund and to strengthen the financial structure of SMEs by cutting the backlog of payments by state-owned enterprises to their suppliers.

In a statement, Silvia Ciornei, Romania's Minister for Small and Medium-Sized Enterprises and co-operatives said recent positive macroeconomic results achieved by Romania confirmed the appropriateness of the government's economic policy stance and the role of SMEs as a driving force for re-launching the Romanian market economy. "The favourable appreciations of the report highlight the progress achieved in the field of government policies for supporting the development of the SME sector," she observed.

Declan Murphy, head of the OECD's South East Europe Investment Compact Unit, noted that Romania has made progress in stabilising its economy and in key policy areas affecting the SME sector. "What is needed now," he added, "is a period of stability and fine-tuning in order to focus on policy implementation and to make the existing system work more effectively."

Romania's Ministry for Small and Medium-Sized Enterprises and Co-operatives had commissioned the report within the framework of the Investment Compact for South East Europe, adopted in 2001 to boost development of the region's private sector. Ms. Ciornei and high-level policymakers, government officials and representatives of entrepreneurs in Romania will discuss the report's recommendations and to debate the future of SME development at a meeting in Bucharest on 12 September 2002.

The full text of Entrepreneurship and Enterprise Developmentis available on the OECD website . For further information, journalists are invited to contact Florentina Ionescu in the Romanian Ministry for SMEs and Co-operatives; Declan Murphy in the OECD's Investment Compact Unit (tel. [33] 1 45 24 97 01) ; or Ben Atkins in the EBRD Press Office (tel. [44] 207 338 7236).