Romania’s  transport infrastructure development  has been slow over the past decades due to a combination of lack of prioritization, discontinuity of decision making and poor planning and execution. High growth without infrastructure is not possible in the long run, according to the Foreign Investors Council (FIC).

It used to be that people believed infrastructure would lead to economic growth.

The business association says that Romania is rapidly approaching the point, if it has not reached it already, where the current infrastructure will act as a break on growth. To reach a parity in terms of living standards with Western economies, Romania needs at least two decades of strong economic  growth. The  current growth  rate will  be impossible to maintain in the medium and long term without immediate and  massive investments in infrastructure.

According  to  the  Global  Competitiveness Report  2016-2017, Romania ranks 88 out of 139 countries when it comes to the quality of its infrastructure, its position having deteriorated by two places compared with the 2015-2016 ranking.

It is vital for Romania to change the way it approaches the infrastructure sector, says FIC. There are several key points which the authorities must address, such as clear objectives as it’s still not clear which are the priorities for the next 3 to 5 years and how these projects will be financed and implemented; the Sovereign Fund for the Development of Romania (FSDI) investment criteria and priorities will need to be clearly defined; the new PPP law should provide a coherent framework, which former versions of the law did not; the absorption rate of EU Funds is too slow and the authorities should take all necessary steps to accelerate it. Without these funds, it will be almost impossible for Romania to develop large infrastructure projects.

FIC believes infrastructure is key for Romania’s future development and it is also one of the three pillars Romania must focus on if it is to become one of the top 10 EU economies, a message FIC is also conveying through Va Urma (www.vaurma.ro) campaign.

The post FIC: Romania can’t support economic growth on long term without large infrastructure investments appeared first on Business Review.