Productivity in Romania up 5 percent over 1999-2005, shows World Bank survey
The labour productivity in Romania advanced 5 percent over 1999-2005, mainly due to the development of the existing companies on the local market, said on May 22 the economist with World Bank Paloma Anos Casero in a press conference.
The data was included in a bank survey, measuring the increase in competitiveness in the new EU states (Romania, Bulgaria, the Czech Republic, Slovakia, Hungary, Latvia, Lithuania, Estonia and Poland), Turkey, the Balkan states (Albania, Bosnia-Herzegovina, Croatia, Macedonia, Serbia and Montenegro), as well as in the former USSR states, in comparison with states in Western Europe.
Thus, at the level of the entire studied region, the analysis saw an increase in productivity with 50 percent, over three quarters of the economic growths in this region being due to an increased productivity.
"The share of increased productivity in the economic growth, of 80 percent, was seen only in this region,” said Casero, the main author of the survey, present in Bucharest.
He stressed that the productivity of analysed countries is half compared to western states.
The WB analysts split the region into groups: the early reforming countries, including the new EU members and Turkey, and the late reforming countries, including the Balkans states and the former Soviet republics.
"For the first group of states, the most economically advanced, we recommend a stronger focus on innovation, for the development of competitiveness on the European market. For the second group, we recommend the finalisation of transition and elimination of obstacles for the entrance of new companies on the market,” said Casero.
The two types of countries are different in the way productivity grew. In the first group, the fast reforming countries, the increased productivity was due 70 percent to the already existing companies, 20 percent to the entrance in competition of new companies and 10 percent to labour force relocation to a more productive company.
"In Romania, the increase in productivity was due 70 percent to company development, 25 percent to the relocation of staff and 5 percent to the entrance of new competitors,” said Casero.
He recommended a series of measures to support the increase in productivity in the future, such as the adoption of coherent and stable macroeconomic policies, the labour force training, investment in technology and infrastructure and the guaranteeing of access to financing.
In his turn, the WB representative in Bucharest Catalin Pauna admitted that the Romanian market has a labour force deficit.
"This deficit can be balanced by relocating the labour force surplus from the rural to urban areas, and the local authorities have an important role, to encourage this movement, by helping labourers with the transport. On long term, the key is the investment in the professional training,” said the WB professional.
He said that since 2006 the average salary in Romania advanced more than productivity, but it is possible that the trend to reverse over the next period.