Considerations regarding economic situation of Romanian five West Region.

Harangus, Daniela

1. INTRODUCTION

[paragraph]

West 5 Region is located in the Western part of Romania's border with Hungary and Serbia and comprises four counties: Arad, Caras-Severin, Hunedoara and Timis.

West 5 Region is part of the Euroregion Danube--Cris Mures --Tisa (DKMT) involving the four counties of the Region V West, four counties in Hungary and the autonomous region of Vojvodina in Serbia. Euroregion was established in 1997 under a cooperation protocol signed by representatives of the local authority regions components. The signed Protocol has proved a powerful support for the first border institutions and for development of more intense relationships between the administrations of the both side of the border.

The region covers two counties with a level of development higher than the national average (Timis. and Arad) and two other counties (Caras-Severin and Hunedoara) passing through an economic crisis and social failure. In addition to these disparities observed in each county, especially in Timis and Arad: a strong atraction exerted by the two well-developed urban poles--Timisoara and Arad--put in the shade the areas significantly lower situated in the eastern part of the two counties (Basaraba, 2008).

2. THE ECONOMIC SITUATION OF THE REGION

Gross Domestic Product per capita realized in Western 5 Development Region has increased steadily from 1998 (1697 euros), reaching in 2008 the value of 3363.7 Euro, reaching the second place in Romania, after Bucharest--Ilfov Region. The most significant contribution to GDP is the services sector (43.8%), followed by industry (29.5%).

In 2007, the labor productivity was 6979.4 Euro, the Region reaching a medium level in comparison with the national one. Until 2008, the tertiary sector focuses 78% of the total number of firms in the region, and realizes almost 13.6% of total turnover. Most companies in this sector operate mainly in tourism, general services, transport and professional services (table 1).

In 2007 the external trade (imports value--the value of exports) in the Western Region was 7 916 516 thousand Euros, representing 13% of the value of foreign trade of Romania (table 2) (Harangus & Duda Daianu, 2008).

<15_TB010>

3. SWOT ANALYSIS FOR WEST 5 ROMANIAN REGION

SWOT analysis is an analysis of strengths, weaknesses, opportunities and threats that was created and used by enterprises as a tool for the formulation of strategies. Strengths and weaknesses concepts are "static" based on the descriptive parameters of an area, within a specified period of time (what exists).

Opportunities and threats are related to the future, and refer to the choices that have made the persons involved in the planning process (what will be).

3.1 Strengths

* Ethnic and cultural diversity meeting point of different cultures, different communities coexistence, tolerance towards diversity, open European spirit

* The twin universities with universities in the EU and the rest of the world.

* The school performance teaching in German, English, French, etc. languages and ethnic minorities in the region.

* Putting the extreme western region of Romania on the main road and railway routes of entry into the EU from Romania

* High degree of tolerance, low social conflicts between citizens;

* Major share of the population of adult age group (20-60 years) over 50% of the total population;

* The existence of research centers with tradition and personal experience with the specialist in the field on various profiles;

* Existence of an infrastructure to support business--business incubators, industrial parks and technology consulting firms, development agencies and other organizations to support the SME sector

* A surplus buildings and industrial space funds available in industrial platforms equipped with appropriate technical and utilities;

* Reserves of land that can be converted for various functions;

* Reserves of land of good quality for practicing agriculture, with land improvement works;

* Stable free market of land and buildings in urban and rural areas, the existence of a valuable architectural heritage;

3.2 Weaknesses

* Generally negative demographic balance;

* Payments made for compensation, which produces social laziness;

* Technical exceeded in research institutes;

* An important percent of the population from Caras Severin and Hunedoara counties who choose to emigrate and work abroad

* Points of strangulation of the movement--production delays and reduced speeds of travel;

Business environment

* The economy is in the area of stabilization;

* The economic obsolete, old machines wear with high moral and physical;

* Lack of a mechanism regarding the selective stimulation of industrial activities and regarding promotion of the clean industry and with high added value;

* Lack of effective partnerships between school and business

* Reduced number of companies that meet international standards for quality products and services made / rendered

* The small sharing of higher technology industry outside the area including Timis and Arad counties;

* The existence of polluting industries with high energy consumption.

* There are cooperation agreements engaged at the political level employees who are not technically-supported by the any concrete initiative or action targeting concrete results

* Lack of knowledge or erroneous perception on the European values and political--administrative European system;

* Lack of a widely shared vision on the place of Romania, in particular of the Region in the new European context for focusing the efforts in the right direction;

3.3 Opportunities

Human resources, infrastructure and research

* Free access for all researchers in Framework Program 7 of the European Union.

* The involvement of large foreign investors in technological innovation activities, or even setting up centers of innovation in the economic units in the region;

* Develop the Timisoara airport like intermodal center (air, rail and road), but also the airport from Arad, for fluidity of the traffic;

* Center for coordination and professional training (for Example: Incubation Center for business, training, coordination and professional training from Sacalaz) Business environement

* Increasing the number of investors in Caras-Severin and Hunedoara county due to the phenomenon of investors' migration from the Arad and Timisoara cities-poles to the eastern areas of the counties;

* Outsourcing of business activities in the region of political and economic cooperation through international administrative policies (fiscal) local

* Access to know-how and new concepts designed to increase competitiveness and attractiveness of the Western Region for external cooperation

* Advertising business opportunities in the region, including those regarding the disadvantaged areas;

3.4 Threats

* The possible maladjustment of enterprises in terms of quality demanded by the EU

* Invasion of the market with imported products

* Specialization in narrow areas mono-industrial and lack of consistent carrier consulting training programs reduce the attractiveness for investors of these areas

* Maladjustment of transport infrastructure in existing application

* The migration qualified and highly qualified labor force through the EU Member States

* Social problems due to the restructuring of mining sector

* Negative balance for birth-death indicators

* Degradation of health and social services infrastructure

4. CONCLUSION

The future development of Western 5 Region is determined by their ability to capitalize on the strengths especially in terms of human and natural resources, traditional educational, scientific, industrial and agricultural region. This can be achieved only through a change of mentality, the potentiation factors to ensure cohesion and cooperation at regional level, by promoting transparency at all levels and raising the competence and social attitude to rank of the single criterion of differentiation, promotion, allocation it is therefore evident that the critical factor for future competitiveness of the region is the human factor.

Efficient recovery of tradition and skills existing in the areas of education, science, industry and agriculture will depend on all of the human factor and finally by the ability to achieve sustainable partnerships at all regional levels of regional and involving all those related to the promotion activities and exports achievement for the region.

5. REFERENCES

Basaraba, A. (2008). Reginal Policy, Eurobit Publisher, ISBN 978-973-620-382- 4, Timisoara, Romania

Harangus, D. & Duda Daianu, D.C. (2008). Aspects Regarding the Romania'S Position in the Global Competition of Knowledge-Based Economy, pp.0589-0590, Annals of DAAAM for 2008 & Proceedings of the 19th International DAAAM Symposium, Katalinic, B. (Ed.), pp 295-296, ISBN 978-3-901509-68-1, Published by DAAAM International, Vienna

*** (2008) http://www.insse.ro--The National Statistics Institute, Statistics Year Book, Accesed on: 2009-07-13

*** (2009) http://www.adr5vest.ro--Agency for Regional Development, Accesed on: 2009-07-10

Tab. 1. Indicators for characterization of the development level
and economic potential
 Caras- Hune-
Indicators Arad Severin doara Timis

Population 459289 331876 480459 658837

Employed
population in total
population (%) 44,1 36,06 40,3 48,3

Unemployement 3,6 7,9 9,4 2,3

GDP/loc 3465,4 2644,5 2801,9 4066,5

Density of
public roads/
100 km (%) 28,9 22,8 45,4 33,4
+
Source: The National Statistics Institute, Statistics Year Book,
2008

Tab. 2. Foreign trade activity in the West 5 Region

 (Export
 FOB /
County Export FOB Import CIF Import CIF) Sold

Arad 1240695 1218989 101,78% 21706
Caras-Severin 95211 71837 132,53% 23374
Hunedoara 421640 359.667 117,23% 61973
Timis 2083133 2425344 85,89% - 342211
West 5 Region 3840679 4075837 94,23% - 235158
Romania 26996714 46444357 58,12% -19447643

Source: The National Statistics Institute, Statistics Year Book,
2008