President Basescu: Romania’s development, slower but based on investment

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President Traian Basescu told a meeting on Friday in Timisoara that conditions have to be created for Romania’s development to be slower but preponderantly based on investment, at the same time with earmarking a larger share of the Budget for investment rather than for boosting consumption.

„The economic crisis has shown us that the story of economic growth preponderantly based on consumption cannot be a successful one in times of crisis, and the bill for such an approach is being acutely, promptly and deeply paid.

We can see countries that have walked a similar path as Romania – Poland and the Czech Republic – that have grounded their growth on consumption less than we did and we made this mistake after 2004; so there should be less consumption and more investment. The fact that Romania has had a consumption-boosted growth seriously affected us when the crisis emerged,” said Basescu.

For solid and sustainable growth, said the President, grounded in modernism, attention should be focused on agriculture, because many believed that once Romania becomes an EU member state it will get subsidies and its agriculture will modernise. The President warned that this should no longer be the case, particularly when the subsidies for the Romanian farmers are seen against their demand.

„Obviously, we cannot hope in a rapid growth of the Romanian agriculture pinning our hopes strictly on the funds coming from the European Union, but we have to start from some realities, and I hope the next year’s Budget will reflect such an approach, all the more so as the Government has until late October, early November at the latest, to come up with a draft Budget before Parliament,” said Basescu.

He also pointed out that there are conditions in Romania for its agricultural output to feed 80 million people, yet it is importing 70 percent of the foods for consumption, which makes you think that something is wrong about our agricultural policies, and specialists on a presidential agricultural board have some clear things to offer.

He mentioned that the development of a food industry that allows to capitalise on agricultural produce has to be boosted, and that the output should reflect the real potentials. The President also remarked that the irrigation system has to be remade and expanded and the food industry should be developed to capitalise on the agricultural output.

The President believes that objective should be to channel European and public finance resources into the rural areas to help develop processing lines for agricultural produce, from crops to livestock.

He added that this is not a short-term process, but a strategy to equip the countryside with produce processing capabilities has to be developed so as to try and develop the countryside so that jobs may be created there and the rates and taxes generated from the operation of businesses may stay there.

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