Romania: corporate vs. state int'l country brand image promotion
The tragicomic situation of the two refugees from Syria bursting into tears when found out they accidentally have reached Romania, and not Serbia or Hungary is reflecting a much broader image.
The majority of potential investors are dominated by this negative misconception, mostly based on hearsay and kept alive by the lack of perceivable action from the previous Romanian governments.
While Romania is one of the most attractive countries in Europe from the foreign investors point of view that have already been here, the country`s image abroad remains opaque or simply too insignificant for the many.
Talking to various local and foreign investors during the past years, problems that the country poses remain the same: corruption, lack of infrastructure, legal unpredictability and lack of transparency. Yet, there's one issue more to add on that list: lack of international (positive) image promotion.
While the delegations of Romanian government officials said they met other officials and companies, they failed to produce any palpable results.
Instead, private investors, leaders of companies in various areas ranging from stock exchange to outsourced services, do seem to promote Romania better. In their meetings with international investors, private investors from Romania try to lure them in with concrete examples of business cases, and they know where to go and what buttons to push.
It is the case of Bucharest Stock Exchange and Franklin Templeton and it is also the case of the ABSL (Association of Business Services Leaders) delegation meetings in the US, which lobbied for Romania altogether to investors weighing billions of euros in assets under management.
And it is also the case of countless local and foreign investors, which succeeded at least to bring down to zero the unemployment rate in areas such as Timisoara.
The government bodies change often inside out, as the defunct ARIS case proved (Romanian Association for Foreign Investment was established in 2002 and closed in 2009 after suffering various personnel and strategy mutations).
A negative perception, mostly unjustified, creates a risk-adverse attitude. We will always remember the case of the Syrian refugees that once they reached Hungary stated they would have never head towards Romania, as "there's nothing to do there". That is simply wrong, as Romania still lacks developed services, so there's everything to do.
When promoting Romania abroad, local investors hit the reluctance wall mainly because of corruption. A lot of investors say Romania should speed up prosecution and also confiscate the fortunes of those politicians convicted by the local courts, not just imprison them. But that's a different topic.
As negative image is slightly edulcorated by the fight against corruption, the lack of infrastructure and legal stability are still dominating.
Romanian general and outsourcing services investments are therefore based on one pillar: the advantage of educated personnel, with lower wages.
Romanian brand image is also based on one pillar: the already-established investors budget and will to lure in more clients, an attitude that deserves a lot of credit.
The other day, the US Ambassador to Bucharest and several economists reiterated the need for infrastructure and the need to keep the human capital at home. This can only be done with foreign investment, as local resources are limited. And here's the vicious circle.
While the Department for Foreign Investments seemed rather active lately, I suspect it is the corporate lobby that deserves applauses for this year growth in FDI.
The foreign investments increased this year to about 2.3 billion euro in the first eight months, almost reaching the overall annual 2014 weak level of 2.4 billion euro.
But Romania's negative perception leads away also investments from more sophisticated domains, such as in banking and finance BPOs. A local BPO investor discussing the expansion of a western banking client from Poland to Romania hit the reluctance wall yet again. Others simply cannot face the lack of infrastructure, while local existing firms also have their own problems: the lack of personnel makes them move now into more accessible employee-pools such as Iasi area in North-East or even Bulgaria.
But more and more money are coming in, even the flow is yet feeble. And there's mostly corporate lobbyists merit.
Bogdan Tudorache is the editor in chief of Outsourcing Today