Strategies for improving the labour market in Romania (ideas from Bulgaria)

I'm reading an interesting article in Financial Times - www.FT.com
Bulgaria reopens labour links with Vietnam
I thin the sittuation is quite similar with the one in Romania and we could learn from their strategies.

I will just copy some interesting ideas from the article and try to make a parallel to situation in Romania.

For years Bulgaria has been a source of cheap labour for western Europe. Now the tables have been turned, as it finds itself facing an acute shortage of workers.
“Bulgaria employed Vietnamese workers under communism and they fitted in well. We would offer jobs on contract terms with temporary residence,” said Petar Dimitrov, the economy minister.
Quite similar to Romania, don't you think? I already wrote about the growing number of Asian people working in Romania. But I didn't hear of any initiative from the authorities to make bilateral agreements with some countries to facilitate the import of skilled labour in Romania. And as we now, it is badly needed especially in the construction industry. On the contrary, in Romania the immigration legislation is not helping companies at all.

The decision to seek workers from Asia follows a successful campaign to persuade the 500,000-strong Bulgarian diaspora in Moldova and Ukraine to return home by offering a fast-track process to acquire Bulgarian citizenship [...] Diaspora workers are much in demand because they don’t have a language problem.
Its sad, but it looks like Bulgaria is more successful to attract people from Moldova than we are. Even if most of the people in Moldova speak Romanian and this could be a big advantage. It's obvious that Romania could gain a lot by attracting skilled workers from Moldova. Ukraine could also be a source of skilled people. And, because the salaries are still better in Romania, we might even attract some people from Bulgaria.

This policy is being revised after thousands of the “Bessarabians” left to seek jobs in Spain, Italy and Greece once they received their Bulgarian passports. "What we need to do is introduce a green card arrangement, requiring five years’ work here to qualify for a Bulgarian passport” Mr Dimitrov says.
Our Bulgarian neighbors already have experience with this strategy. They identified an important problem and they are also giving us the solution for it. We just need to modify our immigration legislation accordingly and then start the campaign to attract the Moldavians.

Another measure is to cut 12,000 civil service jobs [...], “to make additional white-collar workers available to the private sector”, says Plamen Oresharski, finance minister.
That's an excellent idea. In Iasi county the pubic sector is by far the biggest employer. And we all know that the Romanian state is not very efficient. People are not very productive in pubic jobs. This is the main reason why the GDP per capita is so low in Iasi. But these people have a good education and reasonable good skills. If they receive some training on the job they could reach high productivity levels in the private sector.

Wind Energy in Iasi

Wind currently produces about 1% of world-wide electricity use. The wind energy is one of the most used renewable energy forms in Europe. It accounts for approximately 19% of electricity production in Denmark, 9% in Spain and Portugal, and 6% in Germany and the Republic of Ireland. Globally, wind power generation increased more than 5 times between 2000 and 2007. So it's obvious that having wind energy in Iasi county could prove to be a very good thing.

Energia e Servizi, an Italian company plans to develop several windmills in Iasi county. The local authorities offered their full support for the project. So far the best region for wind energy in Romania is considered the sea shore in Tulcea county. But there are also other wind energy projects in the North-East region: Suceava, Botosani, Bacau, Neamt, Vaslui.

More details about the plans of windmills in Iasi in BZI (English translation).

Iasi Airport update

The plan to transform the Iasi Airport in a modern international
airport capable of becoming the leading one in the region is one step
closer to becoming reality.

A problem that was stoping the plan to move forward was the fact that
some of the land needed to expand the airport belongs to the Ministery
of Defence.

Finaly the local authorities reached an agreement with the Ministery
of Defence. Acording to this agreement, the local authorities will
receive from the Ministery of Defence the needed land for the
expansion of the airport. In exchange, the Ministery of Defence will
receive other lands in another area.

Let's hope that by next year we'll be able to fly directly to Iasi
from Paris or Amsterdam or London.

250K new business in Iasi

Gabriel Mardarasievici, the CEO of Ness Romania, and Bogdan Pitigoi,
the owner of Tester Group, are 2 of the most important businessmen in
Iasi. They started MP Business Angels earlier this year. After
carefuly analysing 20 business plans, MP Business Angels announced
today that they are going to invest in their first start-up 250.000
Euro.

The owner of the winning business plan is a 20 years old student from
Iasi - Razvan Antohie. The new company will provide outdoor promotion
services through a network of bilboards with LED lamps. Initially the
company will focus on the most important cities in Moldova region from
Romania. After the initial phase the initiators hope to be able to
gaign national coverage.

I'm very courious to find out more technical details about how the
bilboards will be build. I think that they shoul use Philips
technology as it's the most advanced in the world, Philips Lighting
being the market leader and the pioneer of LED lamps.

If the business will involve a sucessful partnership with Philips
maybe in several years we'll see Philips lights on the Palace of
Culture same as on Le Tour Eifel or the Big Ben.

IKEA is a Dutch company

I just found out IKEA is a Dutch company:
http://en.wikipedia.org/wiki/IKEA

"INGKA Holding B.V. is the parent company for all IKEA Group companies, including the industrial group Swedwood, which manufactures IKEA furniture, the sales companies that run IKEA stores, as well as purchasing and supply functions, and IKEA of Sweden, which is responsible for the design and development of products in the IKEA range. INGKA Holding BV is wholly owned by Stichting INGKA Foundation, which is a non-profit foundation registered in Leiden in the Netherlands. Inter IKEA Systems B.V. in Delft, also in the Netherlands, owns the IKEA concept and trademark, and there is a franchising agreement with every IKEA store in the world."

I think that most of us think that it's a Swedish company.

This is why it's important to have a smart, friendly and predictable financial system. Important International companies are moving their HQ in countries like Netherlands because of that. Even some important companies that do their business in Romania are headquartered in Netherlands, like Rompetrol for example.

34% of Moldavians are ready to migrate (how many to Iasi?)

One of the reasons why economies in Western Europe are still growing is the contribution of the emigrants. Even if most of the people don't like to admit this, it is the truth. I think that for Iasi this could also be one of the growth engines.

In order to achieve this, the first winning strategy should be keeping as many students as possible in Iasi after they finish the studies.

Another important strategy should be the return of the valuable people that used to live in Iasi and are now in Bucharest or in other countries.

But as important as these 2 strategies could be another one: attract some valuable people from Moldova.

I found out from a poll realized by Gallup, that 34% of Moldavians are ready to migrate in another country. Iasi might not be as attractive as Western Europe if we compare the salaries, but it could compensate this in other ways: same language, smaller living costs compared to Wester Europe, the proximity with the Moldavian border (closer to their families) , the cultural similitudes and so on.

GDP per capita in Iasi

In the year 2007, the Gross Domestic Product per capita in Iasi county was only 3,986 Euro, 1500 Euro less than the national average - 5486 Euro.

Even though in recent years, the value of Gross Domestic Product (GDP) recorded a significant increase, from 2,500 Euro in 2005 to nearly 4,000 at the end of 2007, Iasi county is still far away from Bucharest and the counties in the Western part of Romania.

On the other hand I think that it's also important to notice that the GDP per capita in Iasi is still 5 times bigger than the average GDP per capita in Moldova (less than 800 Euro).

There is a strong connection between GDP per capita and average income. This means that the incomes in Iasi would be several times higher than in Moldova. Still I don't see to many companies taking advantage of this and bringing in Moldavian employees.

The proximity with the Moldavian border, the cultural similitudes and the fact that there are already a lot of Moldavian students in Iasi could help Iasi become an attractive destination to emigrants from Moldova. This would contribute to the economical growth of the region.

The access to qualified and relatively cheap labor market from Moldova could become a key selling point when trying to attract important investors. But before being able to sell this as a benefit to the investors, this system needs to be pioneered by some local entrepreneurs and they need to prove that it could be economical efficient and it can bring important profits.