2016 Country Review
Table of Contents
Chapter 1 1
Country Overview 1
Country Overview 2
Key Data 3
Chapter 2 7
Political Overview 7
Political Risk Index 37
Political Conditions 10
Political Stability 52
Freedom Rankings 67
Human Rights 79
Government Functions 81
Government Structure 83
Principal Government Officials 93
Leader Biography 95
Leader Biography 95
Foreign Relations 98
National Security 109
Defense Forces 110
Chapter 3 112
Economic Overview 112
Economic Overview 113
Nominal GDP and Components 119
Population and GDP Per Capita 121
Real GDP and Inflation 122
Government Spending and Taxation 123
Money Supply, Interest Rates and Unemployment 124
Foreign Trade and the Exchange Rate 125
Data in US Dollars 126
Energy Consumption and Production Standard Units 127 Energy Consumption and Production QUADS 129
World Energy Price Summary 130
CO2 Emissions 131
Agriculture Consumption and Production 132
World Agriculture Pricing Summary 135
Metals Consumption and Production 136
World Metals Pricing Summary 139
Economic Performance Index 140
Chapter 4 152
Investment Overview 152
Foreign Investment Climate 153
Foreign Investment Index 155
Corruption Perceptions Index 168
Competitiveness Ranking 180
Stock Market 190
Partner Links 190
Chapter 5 191
Social Overview 191
Human Development Index 194
Life Satisfaction Index 198
Happy Planet Index 209
Status of Women 218
Global Gender Gap Index 221
Culture and Arts 230
Travel Information 232
Diseases/Health Data 243
Chapter 6 248
Environmental Overview 248
Environmental Issues 249
Environmental Policy 249
Greenhouse Gas Ranking 251
Global Environmental Snapshot 262
Global Environmental Concepts 273 International Environmental Agreements and Associations 287
Bibliography 313 Romania
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With a population of around 21 million, Romania is one of the largest countries in Central and Eastern Europe. Between 1250 and 1350, the independent Romanian principalities of Wallachia and Moldavia emerged. In the 15th and 16th centuries Ottoman Turks conquered the principalities.
In 1859 Wallachia and Moldavia were united as Romania. The country gained independence in
1878, and was proclaimed a kingdom in 1881. It joined the Allied Powers in World War I and acquired new territories - most notably Transylvania – after the war. Romania entered World War
II on the side of the Axis Powers in 1941, but after Soviet troops entered Romania in 1944 it joined the Allies. The post-war Soviet occupation led to the establishment of a Communist government, and in 1947 the king was forced to abdicate. Nicolae Ceausescu’s 24 years of harsh, repressive leadership was ended in late 1989 when he was overthrown and executed. However, former Communists dominated the government until 1996 when they were swept from power.
Romania joined NATO in 2004 and the European Union in 2007. Romania is endowed with substantial natural resources including rich agricultural lands, diverse energy resources such as coal, oil, and natural gas, and an industrial base encompassing a wide range of manufacturing activities.
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Temperate; cold, cloudy winters with frequent snow and fog; sunny summers with frequent showers and thunderstorms.
Currency: 1 leu (L$) = 100 bani
Holiday: National Day of Romania, 1 December (1990)
Area Total: 237500
Area Land: 230340
Coast Line: 225
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From about 200 B.C.E. (Before the Common Era), when it was settled by the Dacians, a Thracian tribe, Romania has been on the path of a series of migrations and conquests. Under the Emperor
Trajan early in the second century C.E. (Common Era), Dacia was incorporated into the Roman
Empire, but was abandoned by a declining Rome less than two centuries later.
Romania disappeared from recorded history for hundreds of years, to re-emerge in the medieval period as the Principalities of Moldavia and Wallachia. Heavily taxed and badly administered under the Ottoman Empire, the two principalities were unified under a single native prince in 1859, and had their full independence ratified by the 1878 Treaty of Berlin. A German prince, Carol of Hohenzollern, was crowned first King of Romania in 1881.
The new state, squeezed between the Ottoman, Austro-Hungarian, and Russian empires, with Slav neighbors on three sides, looked to the West, particularly France, for its cultural, educational, and administrative models. Romania was an ally of the Entente and the United States in World War I and was granted substantial territories with Romanian populations, notably Transylvania,
Bessarabia and Bukovina, after the war.
Most of Romania's pre-World War II governments maintained the form, but not the substance, of a liberal constitutional monarchy. The quasi-mystical, fascist Iron Guard movement, exploiting nationalism, fear of communism, and resentment of alleged foreign and Jewish domination of the economy, was a key factor in the creation of a dictatorship in 1938. In 1940-41, the authoritarian
General Antonescu took control. Romania entered World War II on the side of the Axis Powers in
June 1941, invading the Soviet Union to recover Bessarabia and Bukovina, which had been annexed in 1940.
In August 1944, a coup led by King Michael, with support from opposition politicians and the army, deposed the Antonescu dictatorship and put Romania's battered armies on the side of the Allies. Romania incurred additional heavy casualties fighting the Germans in Transylvania, Hungary and Czechoslovakia. The peace treaty, signed in Paris on Feb. 10, 1947, confirmed the Soviet annexation of Bessarabia and northern Bukovina, but restored the part of northern Transylvania granted to Hungary in 1940 by Hitler.
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The treaty required massive war reparations by Romania to the Soviet Union, whose forces occupied Romania until 1958. Meanwhile, the Soviets pressed for inclusion of Romania's heretofore-negligible Communist Party in the post-war government, while non-Communist political leaders were steadily eliminated from political life. King Michael abdicated under pressure in
December 1947, when the Romanian People's Republic was declared, and went into exile.
In the early 1960s, Romania's government began to assert some independence from the Soviet
Union. Nicolae Ceausescu became head of the Communist Party in 1965 and head of state in
1967. Ceausescu's denunciation of the 1968 Soviet invasion of Czechoslovakia, and a brief relaxation in internal repression, helped give him a more positive image both at home and in the West. Western leaders were slow to turn against a regime that, by the late 1970s, had become increasingly harsh, arbitrary, and capricious. Rapid economic growth fueled by foreign credits gradually gave way to wrenching austerity and severe political repression.
After the collapse of communism in the rest of Eastern Europe in the late summer and fall of 1989, a mid-December protest in Timisoara against the forced relocation of a Hungarian minister grew into a countrywide protest against the Ceausescu regime, sweeping the dictator from power.
Ceausescu and his wife were executed on Dec. 25, 1989, after a cursory military trial.
Approximately 1500 people were killed in street fighting. An impromptu governing coalition, the National Salvation Front, installed itself and proclaimed the restoration of democracy and freedom.
The Communist Party was outlawed, and Ceausescu's most unpopular measures, such as bans on abortion and contraception, were repealed.
Dozens of new political parties sprang up after 1989, gravitating around personalities rather than programs. All major parties espoused democracy and market reforms, but the National Salvation
Front (FSN), which since July 1993 has been called the Party of Social Democracy of Romania, or
PDSR, proposed slower, more cautious economic reforms and a social safety net. The Democratic
Convention, on the other hand, favored quick, sweeping reforms, immediate privatization, and reducing the role of the ex-Communist elite.
Ion Iliescu, a former Communist Party official demoted by Ceausescu in the 1970s, emerged as leader of the FSN. Presidential and parliamentary elections were held on May 20, 1990. In the presidential election, running against representatives of the pre-war National Peasants' Party
(renamed the National Peasants' Christian Democratic Party or PNTCD) and the National Liberal
Party, Iliescu won 85 percent of the vote. The FSN captured two-thirds of the seats in parliament, named a university professor, Petre Roman, prime minister and began cautious free market reforms. The new government did not endure for long, falling a year and a half later.
Note: The political developments from this period onward are discussed in the "Political
Conditions" of this review.
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Note on History: In certain entries, open source content from the State Department Background
Notes and Country Guides have been used. A full listing of sources is available in the Bibliography.
In the presidential election in 1990, running against representatives of the pre-war National
Peasants' Party (renamed the National Peasants' Christian Democratic Party or PNTCD) and the National Liberal Party, Ion Iliescu won 85 percent of the vote. The National Salvation Front (FSN) captured two-thirds of the seats in parliament, named a university professor, Petre Roman, prime minister and began cautious free market reforms.
The new government made a crucial early misstep. Unhappy with the continued political and economic influence of members of the Ceausescu-era elite, anti-Communist protesters had camped in University Square in April 1990. When miners from the Jiu Valley descended on Bucharest two months later and brutally dispersed the remaining "hooligans," President Iliescu, by publicly expressing gratitude, convinced many that the government had sponsored the miners. The miners also attacked the headquarters and houses of opposition leaders. The following year, in late
September 1991, the Romanian government fell, when the miners returned to Bucharest to demand higher salaries and better living conditions.
An independent technocrat, Theodor Stolojan, was appointed to head an interim government until new elections could be held. Parliament drafted a new democratic constitution, approved by popular referendum in December 1991. The National Salvation Front split into two groups, led by
Ion Iliescu of the Democratic National Salvation Front or FDSN, and Petre Roman of the National
Salvation Front, in March 1992; Roman's party subsequently adopted the name Democratic Party, or PD.
The 1992 local and national elections revealed a political cleavage between major urban centers and the countryside. Rural voters were grateful for the restoration of most agricultural land to farmers - but fearful of change - and strongly favored President Ion Iliescu and the National
Salvation Front. The urban electorate favored the Democratic Convention of Romania, or CDR, and quicker reform.
The national elections in September 1992 returned President Iliescu by a clear majority, and gave his party, the FDSN, a plurality in both houses of parliament. With parliamentary support from the nationalist Romanian National Unity Party, the Greater Romania Party, and the Socialist Labor
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Party, a technocratic government was formed in November 1992 under Prime Minister Nicolae
Vacaroiu, an independent (that is, non-partisan) economist. In July 1993, the FDSN merged with the Socialist Democratic Party of Romania, the Republican Party, and the Democratic
Cooperationist Party to form the Party of Social Democracy of Romania (PDSR). Prime Minister
Vacaroiu joined the PDSR in May 1996.
The Vacaroiu government ruled with the support of various smaller parties, all of which abandoned the coalition by the time of the November 1996 general elections. Meanwhile, in January 1994, the stability of the government became problematic when the Romanian National Unity Party, or
PUNR, threatened to withdraw its support unless given cabinet portfolios. In August 1994, two members of the nationalist PUNR received cabinet portfolios in the Vacaroiu government. In
September, the incumbent justice minister announced that he had become a PUNR member. The Greater Romania Party, also known as the PRM, and the Socialist Labor Party, or PSM, withdrew their support of the government in October and December 1995, respectively.
The 1996 local elections realized a major shift in the political orientation of the Romanian electorate. Opposition parties swept Bucharest and most of the larger cities in Transylvania and Dobrogea. This trend continued in the November 1996 national elections, where the opposition dominated the cities and made steep inroads into rural areas previously dominated by President
Iliescu and the PDSR. The campaign of the opposition hammered away on the twin themes of the need to staunch corruption and to launch economic reform.
In the presidential elections, Emil Constantinescu of the Democratic Convention (CDR/PNTCD) defeated President Iliescu of the Party of Social Democracy of Romania (PDSR) in the second round of voting and replaced Iliescu as head of state.
In the parliamentary elections, the Party of Social Democracy of Romania, or PDSR, won the largest number of seats of any single party (42 seats in the Senate and 91 seats in the Chamber of Deputies, for a total of 132 seats). The PDSR, however, did not form the government. The constituent parties of the Democratic Convention of Romania, or CDR, alliance joined the Social
Democratic Union, or USD, alliance and the Hungarian Democratic Union of Romania, or UDMR, to form a centrist coalition government, led by Prime Minister Victor Ciorbea, a former labor lawyer and government prosecutor, and member of the CDR/PNTCD. Together, the CDR (122,
53), the USD (53, 23), and the UDMR (25, 11) held 200 out of the 343 seats in the Chamber of Deputies and 87 out of 143 seats in the Senate, for an overall parliamentary majority of 287 out of 486 seats. [The National Peasants' Christian Democratic Party of Romania, or PNTCD, the National Liberal Party, and the National Liberal Party-De mocratic Convention form the bulk of the CDR. The Democratic Party, led by former Prime Minister Petre Roman, and the Romanian
Social Democratic Party form the USD].
After the 1996 parliamentary elections, a centrist coalition government comprised of the Democratic Convention of Romania, the Social Democratic Union, and the Hungarian Democratic
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Union of Romania, and led by Prime Minister Victor Ciorbea, was formed. The ruling coalition held 200 out of the 343 seats in the Chamber of Deputies and 87 out of 143 seats in the Senate, for an overall parliamentary majority of 287 out of 486 seats. (The National Peasants' Christian
Democratic Party of Romania, the National Liberal Party, and the National Liberal Party-
Democratic Convention are the main parties of the CDR. The Democratic Party, led by former
Prime Minister Petre Roman, and the Romanian Social Democratic Party form the USD.)
The inclusion of the Hungarian Democratic Union, or UDMR, and its ethnic Hungarian supporters in the Ciorbea government was considered a historic step toward improving relations between ethnic Romanians and ethnic Hungarians and also between Romania and Hungary. The UDMR was allotted two ministries and a number of state secretaries, county prefects and other senior positions.
The Ciorbea government outlined the following items as its top priorities: economic "shock" reform
(including privatization/closure of state enterprises and monetary and fiscal reform), decentralization, and a campaign against corruption. While Western governments initially praised the new coalition for its attempts at economic reform, the government's actions were far less popular at home. In particular, trade unions protested against planned economic restructuring (mainly privatization) of state-owned enterprises. This restructuring was no more popular with vested industrial interests. The government also suffered two key foreign policy setbacks in mid-1997 when both the North Atlantic Treaty Organization and the European Union failed to invite
Romania to begin accession negotiations.
A year after taking office, in December 1997, the slow pace of economic reform resulted in Prime
Minister Ciorbea reshuffling his cabinet, removing several ministers who were members of parties in the coalition and replacing them with technocrats.
That same month, a key member of the ruling coalition, Petre Roman of the Democratic Party (a constituent party of the Social Democratic Union or USD), called for the resignation of Prime
Minister Ciorbea if real reforms were not soon implemented. Coalition infighting worsened when the Romanian Senate, acting against the preferences of President Constantinescu, voted against education policies favored by the Hungarian Democratic Union of Romania, the ethnic Hungarian party. Not only did the Senate ban separate, minority-language university instruction, it mandated that all history and geography classes - even those taught in Hungarian-language schools - be taught in Romanian. Members of President Constantinescu's and Prime Minister Ciorbea's own party, the National Peasants' Christian Democratic Party of Romania, or PNTCD, were largely responsible for the legislation.
These developments led to increased tensions between the CDR and the UDMR, within the CDR/PNTCD, and between Romania and Hungary who, for obvious reasons, was concerned about the treatment of ethnic Hungarians in Romania.
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Coalition relations worsened when Prime Minister Ciorbea forced the foreign minister to resign and then sacked the transportation minister - both members of the Democratic Party/Social Democratic
Union. Petre Roman then demanded that Ciorbea resign and a new cabinet take office by the end of March, threatening to pull out of the coalition and force early elections. President
Constantinescu supported Ciorbea and called for every parliamentary vote to be considered a confidence vote. In doing this, President Constantinescu was, in effect, "calling the Democratic
Party's bluff." Public opinion polls at the time suggested that the Democratic Party/Social
Democratic Union would not perform well in parliamentary elections.
At the end of January 1998, the Democratic Party/Social Democratic Union pulled out of the governing coalition but agreed to continue to support the government's reform legislation for a sixmonth period. In effect, this kept the government in office and prevented pre-term elections.
Between the end of January and the end of March 1998, the situation in the governing coalition worsened. While it appears that the coalition parties were committed to the shared objective of economic restructuring, personality clashes, ties to vested trade and industrial interests, as well as a history of hostile relations, prevented the members of the coalition from agreeing upon and enacting the much-needed reforms.
The fact that many members of the government were inexperienced and that the required economic reforms -- especially the privatization of state-owned industries -- would be very painful did not help the situation. Generally speaking, there was very little of a natural affinity between the National Peasants' Christian Democratic Party of Romania, also known as the PNTCD, and the Democratic Party. The PNTCD had been anti-Communist during Ceausescu's rule and severely repressed. Many members of the DP had belonged to the Communist party elite. In particular, the two parties strongly disagreed about land reform and how to deal with former, Communist security officials.
By February, another member of the CDR, the National Liberal Party, was calling for the resignation of Prime Minister Ciorbea. Even the leader of Ciorbea's own party, the PNTCD, was suggesting that Ciorbea should go. The coalition was unable to pass the 1998 budget, and talks with the International Monetary Fund had broken down, largely because of the budget situation.
By late March, with the IMF withholding loans and at least 40 members of his own party calling for his resignation, Prime Minister Ciorbea stepped down. Gavril Dejeu of the PNTCD was named acting prime minister, and the Democratic Party/Social Democratic Union rejoined the governing coalition. The PNTCD soon nominated Radu Vasile to be the next prime minister; he took office in early April, leading a coalition of the same four alliances/parties of the previous government.