2002 OECD Economic Surveys: Romania 2002

image of OECD Economic Surveys: Romania 2002

This 2002 edition of OECD's Economic Survey of Romania examines recent economic developments, policies and prospects. It includes special features on co-ordination of reforms and exit and entry in the enterprise sector.

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Slow restructuring has been a general feature of the large state-owned enterprise sector in Romania. Before 1997, privatisation in industry was mainly oriented to small and medium sized enterprises, which is reflected in the fact that, in spite of a massive wave of privatisation during 1995-96 (see Figure 15), 58 per cent of industrial production still took place in the public sector in 1997. This lack of decisive action on privatisation and restructuring of large companies actually worsened the problems of transition in Romania. Inefficient state-owned enterprises, kept afloat through large direct and indirect subsidies, weighed heavily on state funds. The lack of fiscal stability prevented macro-stabilisation, which, together with the misallocation of resources, significantly impeded sustainable economic growth.

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