EBRD’s Patrone: Romania needs new model of economic growth, based on innovation

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Romania requires a new model of economic growth, based on innovation and integration in the chain of global values, in order to accelerate on the path of convergence, Matteo Patrone, the Regional Director of the European Bank for Reconstruction and Development (EBRD) told a conference where the EBRD Transition Report 2017-2018 was presented.

“This year’s report focuses on the challenges of supporting economic growth, with a particular reference to the countries with a middle level income. Just as Valentin [Valentin Lazea, ed.n.] has mentioned, Romania is no exception to these issues and to these challenges. The GDP is growingh beyond its potential, based on consumption, fueled by wage rises, without a correlation with the improvement of the country’s productivity. In order to continue and possibly to accelerate on the path of convergence, Romania, much like many other countries in the region, without the difference that was mentioned, needs a new model of economic growth, based on innovation and integration in the chain of global values. It is my belief that Romania is well placed on this path, as a result of human capital and cutting edge technology, as information and communication technologies (ICT), aerospace or automotive industry, to name a few. But there are a series of ingredients that are missing or should be supported, some mentioned by Valentin, such as the structural reforms. I believe that the infrastructure is a crucial ingredient, said Matteo Patrone.

According to him, the infrastructure represents a crucial ingredient because it supports social inclusion, geographic integration and raises productivity, as it opens the way towards trade and direct foreign investments.

Moreover, he mentioned that the required investments in infrastructure in the region will rise in the next five years to 40 percent of the required total of investments, namely 1.9 thousand billion euro.

With a network of 747 kilometers of motorways, Romania ranks poorly, as opposed to the countries in the region, with regard to the density of the network infrastructure or its spread, geographically speaking.

Matteo Patrone maintains that there are sectors where progress was recorded, such as the hydro or energy sectors, mentioning the interconnection of the gas line with Bulgaria or Hungary.