FOREIGN INVESTMENT IN CONTEMPORARY ROMANIA Introd

This research examines the effects on foreign investment and economic growth and development in contemporary Romania of selected economic factors. The economic factors of interest are price inflation within the Romanian economy, wage rates within the Romanian economy, and currency controls affecting the outward flow of hard currencies from Romania.

Romania Since the Socialist Collapse

When dictator Nicolai Ceausescu was overthrown in December 1989, the country was impoverished, Romanians generally were xenophobic, and the productive base of the Romanian economy had been eroded (Keay, 1990, pp. 52-54). Five years later, the Romanian economy continues to suffer from over-centralization, a dearth of middle-management expertise, a general ignorance of market-economy business methods, and an absence of initiative and responsibility among a majority of the country's populace (McPherson, 1994, pp. 59-69).

The state of the Romanian economy at the time of the socialist collapse, together with the absence of substantial political and economic reform since that time, has caused many potential foreign investors to have second thoughts about participation in the contemporary Romanian economy (Romania looks, 1994, p. 4). While the relatively low wage rates within the Romanian economy are attractive to many foreign investors, both the rate of domestic price inflation and currency controls that affect th

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bers of the Council of Europe openly doubted the validity of the commitment. Romania also became the first member of the former Warsaw Pact to sign an agreement with NATO--North Atlantic Treaty Organization (Ionescu, 1994, pp. 43-47). Nationalist and leftist forces inside Romania, however, threaten to attempt to block Romanian integration into NATO structures. Again, the level of dissension in Romania's domestic political environment causes potential foreign investors to become more cautious. Writing the Communist Party out of government in Romania made it possible for the introduction of economic changes that, it was hoped by reformers, would put an end to Romanian socialism (Tismaneanu, 1993, pp. 308-348). Unfortunately from the perspective of the reformers, the centrally-planned economic system of Stalin-style communism has never been completely replaced in post-socialist Romania (Black Sea, 1993, pp. 49-50). Hopes and dreams ran high in newly independent Romania, where many in the citizenry expected foreign investors to set up factories that would transform cheap raw materials from Eastern Europe into manufactured goods for export to the countries of Western Europe (Hofheinz, 1991, pp. 68-70, 74). As is true of most dre
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Some common words found in the essay are:
Eastern European, Romania Shipman, Issues Romanian, Communist Party, East European, Iron Guard, Europe Hofheinz, Black Sea, Eastern Europe, Romania Ionescu, 1993 pp, foreign investment, romanian economy, foreign investors, eastern europe, research report, potential foreign investors, political economic, 1994 pp, eastern european, potential foreign, research report 2, ionescu 1993 pp, black sea 1993, journal commerce commercial,
Approximate Word count = 2616
Approximate Pages = 10 (250 words per page)

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