A second industrialization wave? – media commentary

In the Romania libera daily, economic analyst and Minister of Reform in the ‘90s Ilie Serbanescu surveys the evolution of Romania’s industrial sector after 1989.
He starts from the statement made by president of the State Assets Realization Authority (AVAS) Teodor Atanasiu, that the coming to Romania of US trust Ford by the takeover of the Craiovabased auto plant marks the beginning of the "country’s second industrialization."
This statement is followed by thread "comments on the solid and efficient nature of this industrialization, accomplished under market economy conditions," versus the "first industrialization wave" of the communist time – not specifically mentioned, but seen as forced and inefficient, notes Ilie Serbanescu.
One cannot contest the major positive impact of Ford’s involvement in Romanian industry, but even if this adds to Renault’s presence, it is still not enough for the critical mass of change to pile up, that could give solid ground for talk about a (re)industrialization, says the analyst. In his opinion, the critical mass could be accomplished only if Mercedes or Mitsubishi’s plans to come to Romania materialized too.

Regardless the shortcomings of the country’s "first industrialization" after the fall of communism (in December 1989, Ed. note), this was followed by dis-industrialization that is mentally and physically not yet over, notes Serbanescu.
"Romanian industry, good or bad, as it may have been, lost at least 3.5 million jobs in the post-Decembrist period and is practically the only net loss-making sector from this standpoint. Industries with an international position were liquidated for lack of capitalization. Ill-management or ill-will drove Romanian industry off foreign markets and massive embezzlements gave the final blow to trades that were barely breathing," writes the commentator.
One can count successful privatisation deals in industry on the fingers of one hand, whereas failed deals stand at thousands, remarks Serbanescu. Industrial restructuring is not yet over, and the workforce outflow from industry is higher then workforce absorption, despite more investments in recent years. Labour productivity is slightly rising but not due to higher production, but to job axing and the massive exodus that made industry now face a structural shortage of skilled professionals.
One cannot say positive signals from industry and particularly from exporting sectors are absent, but to a certain extent they are just the result of the shift of forward-processing from textiles to the auto industry, mentions the analyst.
The second industrialization is fully explained by the impact of foreign investments but, says Serbanescu, just that is no guarantee for the country’s industrialization or re-industrialization. "Foreign investments can add to domestic investments, the absence or weakness of which make talk about real and sustainable (re)industrialization shallow."
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