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Heritage: Romania has improved its economic freedom in last 5 years

Romania is the 65th country in the world in point of economic freedom, evaluated at 63.2 points, according to a study made by Heritage Foundation. That shows an improvement of grades for five out of ten economic liberties analyzed.

The figure marks a progress of 1.5 points in 2009 as against 2008. Romania also ranks 29th of 43 European countries and the general score granted to the country is higher than the world average.

Romania has constantly restructured its economy, improving economic liberties in several domains, reaching an economic growth rate of about 6% in the last 5 years, according to Heritage Foundation analysts.The general rule frame is efficient and the financial system is according to international standards and was consolidated by a recent reform and privatization program.

Romania is worse quoted for the freedom of labor, property rights and corruption. Although Romania has made progress in the fight against corruption, the judicial system remains vulnerable in front of corruption and inefficiency, experts show.The general freedom of leading a business was evaluated at 74.9 points over the average level of 64.3 points and is relatively well protected by Romanian laws. Starting a business lasts only 10 days, compared to the world average of 38 days and obtaining a license lasts as long as in other countries.

Closing down a business may be a lasting process however. Romania's commercial policies are similar to those of other EU member states and Romania's commercial freedom is evaluated at 85.8 points in the conditions in which the world average is 73.2 points. In point of investment freedom Romania has a score of 60 points, over the world average of 48.8 points. Foreign and domestic investments benefit from equal treatment in front of the law, while obstacles facing investors are juridical and legislative unpredictability and bureaucratic procedures.

Residents and non residents can hold accounts in free currency which are subject to some restrictions and all payments and transfers should be well documented. Most restrictions on market transactions in the stock market were lifted but those based on derivatives have to be approved.The evaluation of financial freedom at 50 points is a little above the world average of 49.1 points.

Supervision and regulations in Romania's financial sector observe international standards, but the most significant reforms made at the end of the 1990s include privatization of several state owned banks.

39 out of 41 banks in Romania are private and credit institutions held by foreigners represent about 90%of shares in the banking sector. The largest five commercial banks control 60% of overall active stock and public banks less than 6%, on the drop from 75% in 1998.

Heritage Foundation took into consideration for its analysis criteria concerning fiscal freedom (87 points), government expenditure (70 points), monetary freedom (75 points) and property law (35 points).As for corruption, which is still considerable, Romania has a score of 37 points below the world average of 40.3 points.

The last criterion refers to the freedom of labor where Romania has a score of 57.1 points, below the 61.3 average.Heritage Foundation is an American research institute with public support, set up in 1973 to elaborate and support policies based on the principles of individual freedom and free enterprise.

 

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Tags: points freedom romania average world heritage economic