Preparing for Demographic Change in Nord‑Vest, Romania

Executive Summary

The Nord-Vest region is one of Romania’s eight development regions, strategically positioned in the northwest of the country. The Nord-Vest economy is steadily converging towards the European Union (EU) average. The region has witnessed the third fastest growth rate in regional GDP in Romania in the last ten years, accompanied by a 79% increase in labour productivity over the same timeframe. Economic growth is supported by its vibrant cities, twelve universities, an emerging information technology sector and significant natural capital.

Despite these strengths, Nord-Vest has experienced long-term population decline. In the ten years to 2024, the region’s population decreased by 1.8%, albeit a slower pace than the national average (4.0%) due to natural change (births and deaths) and emigration. Over this period, around 4 500 more people left every year than arrived. By 2050, Nord-Vest’s population is projected to shrink by 15% and it could experience a 23% increase in elderly residents (aged 65+). As a result, the European Commission identified Nord-Vest to be at risk of falling into a ‘talent development trap’.

Policy responses to demographic change in Nord-Vest are complicated by Romania’s fragmented multi-level governance system. While Romania has undergone a gradual decentralisation process, the central government maintains primary responsibility across most policy domains. The North-West Regional Development Agency (RDA) plays a key role in co-ordinating a regional response to demographic change, in particular by targeting investments through the ERDF-funded Regional Programme that it manages. However, action from the RDA alone will not be sufficient – robust action will also be needed by national, county and local governments.

Adapting land use and spatial planning

Efficient land use and effective spatial planning are critical to respond to and steer demographic change. The spatial planning framework in Romania is characterised by outdated spatial planning tools and insufficient co-ordination among and within governments, including with sectoral policies. Housing is a particularly acute challenge. While the dynamic cities of Nord-Vest are magnets for youth, high housing costs in Cluj‑Napoca and Oradea risk deterring young talent from moving to, or staying in, the region. On the other side, a significant share of residential buildings in Nord-Vest are vacant. Inefficient land and property use in the region are linked to the prevalence of secondary residences, unoccupied inherited homes and abandoned properties due to emigration. In Sălaj County, for example, the vacancy rate increased from 15% in 2008 to 18% in 2018 and it is projected to exceed 20% by 2030. To help address these challenges, the report provides detailed recommendations in three broad areas:

• Streamline the spatial and urban planning framework to support a coordinated response to demographic change

• Enhance access to affordable housing in urban areas

• Support efficient adaptation of land and buildings as the population shrinks.

Adapting multi-level governance frameworks and subnational finances

Multi-level governance frameworks and subnational finances in Nord-Vest need to be aligned to the current and future population. Although regional-level strategic planning has strengthened over time with the growing role of the North-West RDA, it remains fragmented and could become more forward-looking. Counties and localities focus on local investments to enhance attractiveness but have limited ability to adapt public services and infrastructure to long-term demand changes. The territorial structure in Nord‑Vest is fragmented and the system of classification of localities is outdated. More than half of the cities and towns in the region no longer meet relevant population criteria. Further, despite there being many small communes, inter-municipal co-operation and metropolitan bodies remains under-developed. County and local governments’ ability to act is also limited and they are highly reliant on grants and transfers, which make up 84% of their government revenue. A complex inter-governmental fiscal framework risks limiting autonomy to respond to local needs and in-efficient allocation of transfers. To help address these challenges, the report provides detailed recommendations in four broad areas:

• Enhance long-term strategic planning to better align investments to future populations

• Adapt territorial structures as the population changes

• Gradually and asymmetrically increase subnational government autonomy to facilitate more tailored local responses to demographic change and attractiveness

• Strengthen county and local government finances to support an equitable and locally designed response to demographic change.

Adapting service provision

To adapt to a shrinking and ageing population, Nord-Vest will need to strengthen its transport networks, and education and healthcare services. The region’s public transport is fragmented, reducing attractiveness and access to jobs and public services, especially for youth, minorities and the elderly. While ongoing investments are improving road and public transport networks, transport planning remains somewhat disconnected from land use and sectoral planning and fragmented across administrative borders. The region will also need to grow its skilled workforce to offset the impact of demographic headwinds. Yet, Nord-Vest’s education system faces a triple challenge from insufficient childcare and education quality, low participation rates (especially in pre-school and upper-secondary education) and rising per student costs. By the end of lower-secondary education, students in Nord-Vest are much less likely to achieve basic competence in mathematics, reading and science as their EU peers. The regional healthcare system is also lacking, with Nord-Vest residents experiencing a mortality rate one and a half times that of the EU average. While the region has seen significant investment in healthcare in recent years, it is not yet prepared for an ageing population. For example, preventative and public health interventions are limited despite their role to support healthy ageing and reduce the future health burden. To help address these challenges, the report provides detailed recommendations in three broad areas:

• Improve public transport to better reflect and shape demographic trends

• Enhance education access and quality to improve social and economic outcomes and offset the negative economic impact of demographic change

• Improve the quality of the regional healthcare system to better meet the needs of an ageing population.