Foreign investors to focus on poor Romanian east
BUCHAREST (Reuters) – Foreign investors will start targeting the poor eastern part of Romania, closer to the large ex-Soviet bloc markets, lured by cheap labor and low land prices, a government official said this week. So far, most of foreign direct investment (FDI) has gone to the capital of Bucharest and the richer western part of the country, attracted by its better infrastructure which facilitates exports to other European Union member states. Romania, which joined the EU in January, has attracted record FDI volumes in recent years, peaking at -9.1 billion in 2006 after it cashed in -2.2 billion from selling its largest bank BCR to Austria’s Erste Bank. «Investors are starting to evaluate the eastern regions also, because they target exports to huge markets like Russia or Ukraine,» Florin Vasilache, head of the Romanian Agency for Foreign Investments (ARIS), told Reuters in an interview. «The land is incomparably cheaper in the east and they will find a much greater work force, also skilled and reliable.» Last year, only retailers like Germany’s Kaufland and real-estate developers like Spain’s Fadesa or Poland’s Globe Trade Center wanted to take their cash into eastern Romania. But Vasilache is confident that the region will soon attract investments which will create new jobs and raise its industrial output, mainly in the car industry, energy and construction. ARIS has said it sees FDI volumes at 7 billion euros this year, as the privatization process is coming to an end. But Vasilache said that is no reason for concern, as greenfield investments are expected to rise in the coming years.
