BrexitToRemainia Newsletter #29By CC / In Newsletters / 1 Comments
A lot is going on in the world at the moment, so being in the right place at the right time can have valuable consequences. This is what might just have happened with Romania’s president visit to the White House. The visit might be remembered as the one where US committed to NATO’s article 5 and/or “scolded” Qatar on their support for terrorism. But never mind, we got our aims achieved: stronger partnership with USA, support for democratic institutions, recognition of status in the region. This goes in line with expectations that Romania will become largest economy in the Balkans soon. It may also draw attention at the less mature, but exponentially growing startup ecosystem in CEE (more US investors maybe?). As president Iohannis mentioned in his speech, a country strives when its neighbours and alliances are strong.
Be savvy: know what`s happening right now in Romania. News from politics, economy, business, various industries and social life.
Meeting Donald Trump
Romania’s Klaus Iohannis was allegedly the first Eastern European president to pay a formal visit to Donald Trump, just last week. The meeting was concluded to be a major / historical success by local media. Why? Because:
- It reconfirmed the strategic partnership between Romania and the USA, in terms of military, economic and cultural ties. The partnership this year celebrates its 20th anniversary, which makes Romania one of the most stable partners of US in the region. It remains to be seen what this will mean in terms of business opportunities, US foreign investments in Romania, visa regime for Romanians etc.
- It places Romania high(er) in the fight against terrorism. While most of president Trump’s intervention on terrorism was linked to Qatar and his recent summit in the Middle East, Romania was praised to be the 4th largest contributor of troops in Afghanistan
- It finally made president Trump engage USA against clause 5 of the NATO treaty (i.e. intervening to support any NATO state that is being threatened). There was a failed attempt by other leaders to do the same during recent NATO Summit. Romania was also praised to have committed to spend above 2% of GDP on defense, a claim president Trump has made on all NATO members
- There was clear support from the US in terms of fight against corruption in Romania. This is absolutely critical and perfectly timed, as you might recall the recent protests against political parties plotting to pardon their members from penal charges. Whether this will deter our politicians from further blunt attacks on justice remains to be seen
- It places Klaus Iohannis on the “radar” of high politics. Internally he was praised to speak decent English (as simple as that :)) and to have achieved all points above (by either will or luck, we would add). Externally its is rumored that Iohannis will soon meet Angela Merkel and Emmanuel Macron to debrief. After all, he was clear in his urge for USA to recognize the need for a strong EU.
PS: If you have 27 minutes, you can watch the full press release in this Youtube video
PPS: the most important news from this meeting (e.g. on Qatar, on NATO’s article 5) had nothing to do with Romania … but hey, sometimes it’s nice to just be in the right place at the right time 😉
Taking over Greece’s GDP
The first quarter of 2017 saw Romania’s adjusted GDP overtaking the one of Greece for the first time (44.2 vs 43.9 billion EUR). If the trend continues, Romania can become the largest economy in the Balkans. And if the growth continues (by the way: 5.6% in Q1 = the highest in EU) we have a chance of overtaking the Czech Republic and Portugal in few year`s time. Right now our annual GDP (2016 values) is 169.6 billion EUR compared to 174.4 billion for the Czech Republic and 184.9 billion for Portugal. We just need some time and contextual luck.
Take action: grasp opportunities for advancing business in (and/or with) Romania. What others think & do. What business events to attend.
CEE and the growth in startup funding
Investments in CEE region have increased 10 times since 2012, albeit from a very low base (merely $15 million five years ago). This is what a Reuters’ recent article on the topic observed. “First time founders have gained experience and are now starting their second and third companies with higher ambitions”, one argument goes. Another one is that Central and Eastern European universities are producing high quality, low(er) cost graduates in mathematics and computer sciences. This helps the build-up of an ecosystem for tech-based startups in the region, a topic that was also picked up by Financial Times recently.
Some nice examples to go with the story:
- DocPlanner, a Polish startup which does for doctor appointments what hotels.com does for hotel reservations, is active in 30 countries and has 17 million users/month
- Prezi, the Hungarian cloud-based rival of Microsoft Powerpoint just acquired Latvian Infogram. Overall, the startup raised $70+ million to date
- UiPath, a Romanian startup of which we wrote in a previous newsletter, raised 30 million USD in one round to expand their robotic process automation (RPA) operations
Online retail on the rise
It’s been a long time since we covered the online retail sector in this newsletter. Back then we were estimating the volumes for 2016 to be roughly $2 billion. In 2017 the magical number seems to be 2.5, meaning a nice +/- 25% increase. Apart from last year`s favorite things to buy online (fashion, IT&C, toys) Romanians seem to have acquired the taste for cars and do it yourself tools. Likewise, bio and natural foods are on the rise in Romanian online shopping as is the case throughout Europe. There seem to be no less than 3.000 online shops in the country, so a Trademark program is under preparation to ensure trust & standardization in the industry.
Techsylvania and its Hackaton
Whereabout are you during June 17-20? If in Cluj Napoca, then make sure to attend Techsylvania, the leading technology event in Eastern Europe. “4 days, 1500 delegates, 40 speakers, 20 connected devices” is what the organizers praise for this years` edition. There is a Hackaton of course and the top 3 winner teams will also present their demos on stage. Last minute tickets are available from 100 EU (regular access) to 200 EUR (VIP access), so there is no reason for you to say “no”, is there?
Know your game: Build your Aces for when you meet a Romanian business partner for coffee. What we (might) like to talk about.
The ups and downs of world class tennis
On Saturday Romania’s highly ranked Simona Halep met Latvia’s less known Jelena Ostapenko in the final of Roland Garros. Unfortunately she did not win the Grand Slam that was widely predicted to be hers (and which would have propelled her as world’s number 1). The match started well for Simona as she won the first set and was about to win the second one too. Then something happened (maybe the relaxation in front of imminent defeat) and Jelena started to play more aggressively and make less mistakes. Kudos to the winner!
Romanian Overview Report: In this comprehensive report you will find information about: macroeconomic landscape, industries and investments, infrastructure and technology, taxation system, human capital, governmental support and last but not least quality of life in Romania (if you decide to move over here ;)).
Investor Guide Romania: In this well-structured guide you will find information about: investment climate in Romania, economy in general and the business ecosystem in particular, availability of financing, employment and labour law, fiscal policies, as well as how it is for an expat to live in Romania (not too bad, we can assure).