In the framework of the project “Comprehensive redesign of the licensing system in Romania”, funded by the EU through the Structural Reform Support Programme, the OECD has been supporting Romania in identifying bottlenecks and practical reform actions to simplify business licensing procedures and improve the business environment, in co-operation with the Directorate-General for Structural Reform Support (DG REFORM) of the European Commission and the Romanian Competition Council. The project’s objective is to conduct a comprehensive stocktaking of business licenses in the commercial, industrial and services sectors and develop a roadmap for simplifying procedures in one sector of the economy.
This report provides an overview of reform options and practical actions that could support the simplification of business licensing procedures in the industrial sector, with potential spill-over effects for other sectors of the economy. It draws on international practices and experience of OECD countries and tailor them to Romania’s administrative and legislative context. It is accompanied by a simplification roadmap and business licensing inventory with practical advice on how to translate recommendations and practices into reform actions.
Over the last two decades, Romania has converged rapidly towards the OECD average income per capita. Its economy has also proved resilient: after a deep contraction in 2020 triggered by the coronavirus pandemic, activity has rebounded fast. However, short and medium term challenges remain. The recent surge in inﬂ ation and the new pandemic wave require prudent macroeconomic policies. Eventually, ﬁ scal sustainability needs to improve to cope with ageing. Productivity levels remain well below the OECD average, calling for reducing competition barriers, raising human capital, enhancing the regulatory framework, and improving transport infrastructure. Romania should seize the opportunity provided by the NextGeneration EU plan to boost investments for the green and digital transitions. Poverty remains high and some groups have difﬁ culties to join the labour market. Active labour market policies need to be reinforced and access to training is a pre-requisite for addressing skills shortages. Finally, pursuing convergence to the highest OECD standards requires improving the rule of law and ﬁ ghting corruption.
After reaching its pre-pandemic level in the first half of 2021, economic activity will temporarily moderate due to the fourth wave of the virus. Over the next two years, GDP growth is projected to remain strong, at about 4.5% in 2022 and 2023, assuming the pandemic is brought back under control. Pent-up demand will sustain private consumption, and investment will surge supported by the absorption of EU funds. Tensions on the labour market will drive wages upwards and keep inflation above the central bank target.
The COVID-19 pandemic risks putting a halt to past strong improvements in living standards and aggravating poverty, especially among marginalised communities, informal workers, and working poor, who are more vulnerable to economic shocks and insufficiently protected by a weak social security system. The crisis also raises concerns about low capacity in the healthcare sector and a lack of resources in deprived schools.
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2021 Structural Reform Priorities