Israel – Romania 70 years of commercial relations

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At the brink of Israel’s 70th Independence Day, there is no doubt that the Israeli export is a shooting star, launching from a very modest beginning to spectacular results, despite several threats and challenges. The journey Israel has made as a society and an economy is beyond remarkable. It is almost hard to believe that in 70 years, a State facing constant military conflict, absorbing immigration at a rate of 100% of its population in its first years, and having very little natural resources, would manage to reach the economic achievements that Israel has marked. In particular, the Israeli export amounted to only $ 28.5 million in 1949, the first full year of Israel’s independence. It was composed mostly (66%) of the export of citrus fruits in general, and oranges in particular.70 years later, the picture is completely different. Israel has become a scientific, technological and commercial superpower and a developed economy, part of the elite group of developed countries around the world. Since that period, Israeli exports have grown 3590 times! In 2017, Israeli exports reached a record volume of $ 102.3 billion, with more than 40% of its exports consisting of services, not products! These are mainly high technology services.

Surprisingly, although Israel has a magnificent and innovative agricultural industry, agricultural exports account for only 5% of Israel’s exports of goods. Nearly one-third of goods exports are made of products related to the chemical industry, including pharmaceutical products, 27% are machinery and electronics, and 11% are optics and medical equipment. Thanks to these industries, Israel became worldly known as the “Start-Up Nation”.Israel is one of the leading countries in research and development – more than 300 multinational companies have chosen Israel as a base for research and development centers. Israel is also the third country in the world in the number of companies listed on the New York Stock Exchange, after US and China.  More than 70% of Israeli exports are based on the free trade agreement infrastructure. The first agreement was with the European Common Market in 1975. In addition, today, the European market is an important market for Israeli exports, amounting to approximately 40% of Israel’s exports.

Mr. Matan Safran, the Commercial-Economic attaché of the Israeli Embassy, tells that “The volume of trade between Israel and Romania is about half a billion dollars a year, most of it from Romanian Import (about $ 380 million) and some from Romanian export (about $ 120 million). This trend reversed in 2011, apparently with regard to the relatively late influence of the global crisis in 2008“. According to Safran, there is a trend of recovery. “In recent years, Romania has been one of the fastest growing economic powers in Europe, with growth rates of nearly 6%.  This growth is based mainly on an increase in public and private consumption. There is a big difference between what was before 2008 and what is happening now. The growth in the first decade, 2000-2008 was meteoric, almost supernatural. Now it is much more stable and this is a positive prospect for Romania’s economy.”

Romania is an emerging economy that offers a variety of business opportunities to foreign companies. This is especially true for Israeli businesspersons, who in recent years have been active in the developing the Romanian market, especially since Romania joined the European Union in 2007. The main opportunities for Israeli companies in Romania are in the water, agriculture, energy, medicine and cyber industries.

“Romania is a country rich in natural resources it is a superpower in all types of energy, whether it is oil& gas, hydroelectric plants or alternative energy.”

Romania has a very broad energy infrastructure that includes government and private actors (mainly foreign) who operate the electricity grid. Many of them showed interest in Israeli technologies that can save costs, streamline processes and protect the network from physical attacks and cyber-attacks. In this regard, the Commercial Mission of the Embassy leads the connection between the Israeli Electric Corporation and a number of parallel Romanian government companies in a variety of fields, including network optimization, cyber protection, and modernization of power stations.

Safran tells about a draft law on cyber security that is being reviewed by the Romanian government and is expected to pass by the end of 2018. This law will define the minimum requirements of all government companies and the financial services system for cyber protection. “We believe and hope that Israel will be the first country from which the Romanians will want to adopt knowledge, processes and technologies in order to improve the level of resistance to cyber-attacks”.

In the last two years The Commercial Mission of the Israeli Embassy in Romania, has initiated ten different cyber related initiatives. Among these are included official Romanian Delegations to Israel for conferences and meetings with companies, B2B events and business meetings in Bucharest for Israeli companies and meetings between senior Romanian and Israel officials both in Romania and in Israel.

The Commercial Mission has continuously facilitated the presence of senior Israeli experts as speakers in cyberspace events in Romania in the effort to promote exchange of knowledge between the countries.

In March 2018, a historical delegation arrived from Israel. It included 21 large and medium-sized Israeli companies, that had high-quality personal meetings with over 70 Romanian entities – from both governmental and private sectors. This delegation represents a record-breaking commercial activity in these areas in the last two years. “The size and quality of the meetings that were held at the event was an expression of confidence in the cooperation between the two countries in these areas” says Safran.

“In the coming months, Romania is proceeding towards the issuance of the Private Public Partnership Law, which will regulate the foreign private investments in Romania which are concluded in cooperation with the government. This law is highly anticipated by Israeli investors, as it will create many opportunities for Israeli companies to participate in significant projects in various fields such as water, medical services, agriculture, cyber security, homeland security and more.”  Finally, Mr. Safran notes the importance of the strong and strategic relations between the Israeli and the Romanian leadership. “In light of the very recent official visit of Prime Minister Dancila and the President of the Chamber of Deputies Dragnea to Israel, I can happily indicate that the Economic, Trade and Investment relations where at the heart of the discussions. The leaders have discussed the ways to intensify the collaboration between the countries in the medical field, cyber security, agriculture and infrastructure, energy and innovation. I am very confident that it is not a coincidence that Romania and Israel are ever closer. We will soon see the fruitful results of the efforts of both countries to innovate together for the benefit of their respective economies.” From the point of view of the Commercial Mission, “the great potential in so many sectors in Romania combined with the will and efforts of the countries’ leaders and business communities, and the high quality human capital of Romania, I am certain that we will see success in the very near future.”