CHAPTER III - ECONOMY

3.1. General Survey

3.1.1 The Evolution of the main macroeconomic indicators

The year 2000 showed a slight improvement of the main economic social indicators, which recorded some increases against the previous year.

Note: The values in ROL were converted in dollars at the annual average rate
of exchange advised by the Romanian National Board.

3.1.2. Gross Domestic Product

In 2000 the GDP amounted to USD 36.7 bn.

The main resources of the 2000 GDP

*) Is measured by the balance between intrests cashed and paid by credit institutions, being the result of thier financial brokerage activity.

3.1.3 The ranking of the Turkish - Romanian companies in the total results of the financial year 1999

3.2. Romania's foreign trade in the year 2000

3.2.1. Weight of export and import in foreign trade

The covering percentage between FOB imports and FOB exports was 86.0%

3.2.2. Major partners

3.2.3. Exports and imports on sections acc. to CSCI Rev. 3*

* CSCI Rev. 3 - International Trade Standard Classification
Source: National Institute of Statistics

3.2.4. Outcomes in the Romanian - Turkish relation

The biggest excess in the 2000 commercial balance was registered with Turkey.

3.3. Agriculture

3.3.1. General survey

Farming area: 14.8 mil. hectares

Agricultural production: USD 7,526.2 million in 2000, it decreased by 14.1% against 1999. Vegetable production was 61.3% out of the total agricultural production.

3.3.2. Achievements on the Romanian - Turkish relation

In 1999 the share held by the Romanian - Turkish companies in the agricultural market was 0.01%.

3.4. Industry

Structure of the total production value, on industrial sectors

General presentation

In 2000 industry recorded some positive results. The production increased in all industrial sectors being 8.2% bigger in absolute volume as compared with 1999.

In case of processing industry, the production increase as absolute volume in more than half of the industries and significant increases were recorded at: clothes, machinery and equipment, chemistry and artificial fibres, metallurgy.

Achievements in the Romanian - Turkish relation

The industries with notable economic - financial results for the Romanian - Turkish companies, in 1999, are: food industry, beverages, metallic construction and metal products (exclusive machinery, equipment and installations), oil processing industry, coal coking and nuclear fuels treatment.

The Romanian - Turkish companies that carried on their activity in the field of industrial production, in 1999, hold important weights in the total economic - financial outcomes registered by the companies with Turkish contribution to capital: 30.9% out of the turnover, 54.3% out of the gross profit, 38.1% out of the value of assets and 63.4% out of the total number of employees.

3.4.1. Extractive industry

3.4.1.1. General Survey

In 2000, in comparision with 1999, the extractive industry recorded 7% increase in absolute volume. In 2000 the value of extractive industry production was USD 2.1 bn, that is 9.9% out of the total value of industrial production.

Production of the extractive industry

3.4.1.2. Achievements on the Romanian - Turkish relation

In the extractive industry this relation is not important.

3.4.2. Power industry

3.4.2.1. General Survey

In all industrial sectors, the power industry recorded the biggest increase 9.4% in absolute volum in 2000 against 1999.

The value of power industry production of the previous year was about USD 1 bn, that is 4.8% of the industrial production value.

Production of electrical and thermic power

The main primary power resources measured in thousand tons/fuels was 51109.0 out of which the domestic production 36195.7 and imports 14913.3 thousand tons conventional fuel.

3.4.2.2. Achievements in the Romanian - Turkish relation

In 1999 the Romanian - Turkish companies did not record economic - financial results in the field of power / thermo / gas / hot water production, transport and distribution.

3.4.3. Food Industry

3.4.3.1. General Survey

The increase of the food industry in 2000 against 1999 was 9.4% in absolute volume.
In 2000 the food industry production was USD 3.28 million, that is 15.7% out of the total industrial production.
The weight held in the total of processing industry production was 18.36%.

Production of the food industry

3.4.3.2. Achievements on the Romanian - Turkish relation

Among all industries the Romanian - Turkish companies recorded the highest values of the financial indicators in the food industry.

Analysing the weights held by the Romanian - Turkish companies with the results of all companies in Romania, of each industry, it comes out that they got maximum values in the food industry.

3.4.4. Industry of textiles, ready-made clothes and footwear

3.4.4.1. General Survey

In 2000 this industry recorded the biggest increase (53.7%) against 1999.
The value of the production in the previous year was USD 2.3 bn, representing about 11% of the total industrial production.
In the value of the processing industry it represented 12.87%.

The quantity achieved in the production of this industry was as follows:

3.4.4.2. Achievements on the Romanian - Turkish relation

Among the active Romanian - Turkish in 1999, the companies working the field of this industry recorded the highest role of profit, 27.5% calculated through the turnover.

3.4.5. Chemical industry and artificial / synthetic fibres

3.4.5.1. General Survey

This industry recorded an increase in absolute volume of 24.0% which is the same as for the industrial production last year.
In 2000, the production of this industry amounted to USD 1.81 bn which represents 8.7% out of the total industrial production.

3.4.5.2. Achievement on the Romanian - Turkish relation

3.4.6. Metallurgy

3.4.6.1. General Survey

In 2000 the metallurgical industry recorded on increase in absolute volume of 22.1% against 1999.
The value of the metallurgical production was about USD 3.55 bn which represents 17% out of the total industrial production.
The most important products of this industry, steel, hot iron rolled goods recorded some quantitative values of 4,770.2 thousand tons and repsectively 3,675.7 thousand tons.

3.4.6.2. Achievements on the Romanian - Turkish relation

3.4.7. Machine - building industry

3.4.7.1. General survey

The increase of this production was 28.5% in absolute volume in 2000 in comparison with 1999.
The value was about USD 1 bn which means 4.8% of the total industrial production.
Considering the quantity, the products of this industry was:

3.4.7.2. Achivements on the Romanian - Turkish relation

3.4.8. Electronic and electrotechnical industry

3.4.8.1. General Survey

The evolution of the production in this industrial sector, in 2000 in comparison with 1999, was somehow contradictory. Some industrial branches recorded spectacular decreases (radio and TV sets -74.1%), other branches recorded slight increases (precision medical instruments and equipment, optics and clocks and watches +5.9%).
The value of the production was USD 561.2 million in 2000 which represents 2.68% out of the total industrial production.

The production achieved on the electronical and electrotechnical industry.

3.4.8.2. Achievements on the Romanian - Turkish relation

3.4.9. Industry of furniture

3.4.9.1. General survey

This industry registered on increase of 7.5% in 2000 against 1999.
The value of the furniture production was USD 404.98 million in 2000 which means 1.9% out of the total value of the industrial production.

3.4.9.2. Achievements on the Romanian - Turkish relation

3.5. Construction

3.5.1. General survey

The value of the construction works was USD 3.1 bn in 2000, that is an increase of 5.4% in comparison with the year 1999. The construction works achieved in the wholly private sector represented 87.3%.

The biggest weight is represented by new constructions and repairs (79.8%), the new construcions representing 63.6% out of the total value of the construcion works.

The number of the ready houses in 2000 was 26,127 in 2000 which shows a decrease of 3,390 houses in comparison with 1999.

The number of the houses built with budgeting subsidies was 1,270, 480 less than in 1995.

3.5.2. Achievements on the Romanian - Turkish relation

3.7. IT & C

3.7.1. General survey

In Romania one can say that the IT is at the very begining of its life, but there are signs of fast development. As concerns the local "hard" manufacturers, they record a steady increase but the first place is still held by the leading transnational companies in this field, mostly for the tenders of the complex systems. It should be mentioned that the evolution of PC market is more and more spectacular, the sales of units go up: 100,000 systems in 2000, they envisage an increase of 150,000 systems this year.

The "software" industry also keeps on expanding, the number of companies slightly increases every year, now they are about 30. More than half of their number is in Bucharest and the weight of the private capital is overwhelming majority (93.5%). The average turnover of a "software" Romanian company was USD 1,564,667 in 2000 with an average number of 50 employees. The weight of export in the total production is also increasing every year. In 1999 was 28.6% and in 2000 was 36.5%.

3.7.2. Achievements on the Romanian Turkish relation

3.10. Romanian - Turkish Economic Co-operation

3.10.1. The Turkish investment in Romania

Turkish investment structure in Romania on industries

The Turkish investment in Romania between December 1990 and 31 December 2000 was USD 225,527.6 thousand for a number of 6,689 companies representing 8.6% out of the total number of companies with foreign contribution and 3.7% out of the value invested in foreign currency. Turkey is on the 10th place in the ranking of the countries with foreign contribution to equity between December 1990 and 31 December 2000.

3.10.2. Bilateral Business Councils

• 1995 - setting-up of the Romanian - Turkish business Commission (President Mr Komuran Gortuk - Bayindir holding);
• 1996 - foundation of the Romanian - Turkish business Commission (27 founder members), it was later, enlarged as other companies joined out at present they are 45 members.

The President of the Romanian party is the George Cojocaru - CCIRB's President and the President of the Turkish party is Mr Muhtar Kent, president of Anatolu Efes.

The Romanian - Turkish business commission is held every year and they were scheduled:

• March 1997 in Bucharest
• March 1998 at Samsun in Turkey
• 21 June 2001 in Bucharest.

3.10.3. Bilateral businesses associations

• The Romanian - Turkish Chamber of Commerce and Industry set up in 1995 in Bucharest is:
  • non-governmental, non-profit, independent institution;
  • headquarters: 1, Libertatii Blvd., Bl. A1, et.4, ap.83, Bucharest.
  • target: to promote the commercial relations between Romania and Turkey
  • President Mr Tamer Atalay who is also Vice-President of the Romanian - Turkish Business Committee and Vice-President of the Boarding Committee of the Bilateral Chambers of Commerce and Industry Union in Romania
  • affiliated member of CCIRB.

• The Association of the Turkish Businessmen (in Romania) TIAD, set up in 1993 in Bucharest, having the following characteristics:
  • non - profit, independent, non-governemtal institution;
  • address: 73, Bd. Unirii, Bl. G3, et. 6, ap. 50, sector 3, Bucharest;
  • purpose: develop the economic social cultural relations between Romania and Turkey; support the investments and commercial activities of the Turkish businessmen in Romania;
  • leading bodies in Association:
    • general assembley;
    • broading committee;
    • President Mr Dr. Dursun Altînîsîk who is also Vice - President of the Federation of the Turkish Businessmen Associations in Europe (headquarters in Koln - Germany).
  • affiliated member of CCIRB.

3.10.4. Bilateral agreements

• Governmental
  • Turkey-Romania agreement for preventing double taxation regarding income/assets tax - 1 July, 1986
  • between Turkey - Romania for mutual promotion and protection of investments - 24 January, 1991
  • between Romania and Turkey to settle direct connections at the Black Sea between Romanian and Turkish ports - 8 April, 1982
  • through exchange of letters for pushing from clearing to free convertible free currency for the Romanian - Turkish trading exchanges - 14 March, 1973
  • free trade between Romania and Turkey - 29 April, 1997
• between CCIRB and homologous Turkish partners
  • the Turkish Union of the Chambers of Commerce, Industry, Navigation and the Exchange. Within the CCIRB and the Turkish Chambers Union they reciprocally created Relation Sections since 1975 through the co-operation protocols signed at Bucharest. The Turkish Union of the Chambers of Commerce, Industry and Navigation - December 1996
  • The Izmir Chamber of Commerce - 29 June, 1998
  • The Istanbul Chamber of Commerce - 1996
  • The Istanbul Chamber of Industry - 24 April 1994 in Bucharest
  • The Antakya Chamber of Commerce and Industry
  • The Eskisehir Chamber of Commerce - 1 November, 1994 in Bucharest
  • The Bursa Chamber of Commerce and Industry - October 1996
  • The Romanian - Turkish Business Committee - August 1996.

Other organizations with which the CCIRB collaborates:

• DEIK (Foreign Economic Relation Board)
• IGEME (Export Promotion Centre)
• KOSGEB (Association of the Turkish Small and Medium Firms)

3.10.5 Joint participation in regional initiatives

Joint participation in regional intitiatives

a) ABC - Association of the Chambers of Commerce - www.abcinfos.com

The CCIRB is founder member. During its presidency (1999), it put forward some new elements:

• the first organization of a Balkan partnership without any financial support (neither from the Romanian state nor from any international organisms), meant to ensure direct contacts between the firms in this zone and to develop the interBalkan trade and co-operation;
• organization of the first tourism forum, which has become traditional and was taken over and continued by the Turkish party;
• the steady updated publishing of the ABC guidebook and the organization's biannual publication covering legal regulations in force and the economic development stage of the member countries;
• achievement of a regional agreement of collaboration and harmonization of the regulations concerning the commercial arbitration;
• adoption of the business ethical code;
• reciprocal participation with information stand in the Balkan fair, working by turns and focused on an outstanding exhibition from each host-country;
• development of the collaboration with Euro Chambers and the Association of the Chambers of Commerce of the Black Sea zone and the Mediterranean Sea region (the last ones are under discussion);
• ABC involvement in the process of regional reconstruction according to the SE European Stability Agreement;
• setting up an information-working group with aim to set up a mutual database which helps know better the co-operation potentials and facilitate the process of business opportunities identification (ABC Info);
• active involvement in the programme of improving ABC activity assisted by DHT Germany, and the programme is housed at the operation headquarters in Bulgaria;

b) CCIRB's involvement in the accurate application of the provisions stipulated by the Balkan Stability Agreement;

• active contributions together with Romania's government to realize the regional evaluation survey "Investment Compact" and to identify many concrete crossborder co-operation projects for the reconstruction in the zone which was much troubled during the regional conflict. It should be emphasized the use of PARTINVEST database within the working table no. 2 concerning the economic relations in the stability agreement;
• active participation by a significant contribution in the business conferences and forums organized in the area, also the promotion of all information within the business community in Romania through the organization of tenders for the reconstruction projects (achievement of the links between CCIRB's web page and MAE's web page on the stability agreement);

c) in the Black Sea Economic co-operation, CCIRB is involved on two levels:

• Boarding Committee of the Black Sea Economic Co-operation Council and the Association of the Balkan Commercial Chambers;
• in the year 2000 when CCIRB had the leadership of the Boarding Committee of the Council, it endeavoured to bring as many concrete elements as possible meant to highlighting the economic potentials in the zone;
• creating an information-working group, suggesting a viable solution of mutual setting up and exploiting a unitary database on economic legislation and business opportunities in the member countries;
• BSEC BIN;
• promoting the idea of an active involvement of the business community of the Black Sea zone together with the business communities of the Balkan zone in the reconstruction process stipulated by the stability agreement;
• active participation on the business forum and Conference aiming to the co-operation in the Black Sea zone focused in the specific necessity of turning the Black Sea development bank into a real operating instrument of the companies in the zone.