Hungary, Romania lure in more local investorsHaving long been eclipsed by Europe’s “big three” Germany, France and the U.K., countries in Eastern Europe often garner less interest from investors.
While some of the leading European powers have their own financial problems, eastern countries like Romania and Hungary seek to attract more investors from emerging Asian countries like Korea by inviting business entrepreneurs and potential investors to a seminar promoting economic and investment opportunities on March 19.
For the “Economy and Investment Environment of Hungary and Romania” event held at the Korea Chamber of Commerce & Industry in central Seoul, Commercial Counselors Ilie Stanica of the Romanian Embassy and Levente Pallos of the Hungarian Embassy attended as main presenters.
Stanica pointed to Romania’s constant GDP growth and its proximity to the Black Sea and Central Europe as main advantages for investment.
“Romania had seen a continued growth in its GDP through 2001 through 2008. In 2011, its GDP was 2.5 percent, which is higher than 27 European countries’ average of 1.6 percent,” the Commercial Counselor said.
“We can also easily access the Black Sea and Danube River, which makes commerce transportation more efficient. The Mediterranean and central Europe, covering Austria and German are also close by,” he said, stressing the favorable geographical location.
In recent years, foreign direct investment (FDI) in Romania has increased dramatically mainly thanks to a cheap labor force, a 16-percent flat tax for foreign corporations and individuals, and virtually no restriction of the full ownership rights of managing companies.
“Romania is the third-largest inward FDI recipient among Central-Eastern European countries, following the Czech Republic and Poland,” Stanica said.
According to the Vienna Institute for International Economic Studies, Romania attracted 1.9 billion euros ($2.5 billion) in foreign direct investment in 2011 after its peak years from 2006 through 2008, which raked in 9.06, 7.25 and 9.49 billion euros respectively.
The Romanian commercial counselor also noted that the increasing volume of bilateral trade between Romania and Korea represents a promising prospect for Korean investors.
“Korea is the second-largest trading partner in Asia. It falls behind China, but ahead of Japan and India,” he said.
Major Romanian exports to Korea include electrical equipment, garments and textiles, while Korea’s shipment to the Danube river nation consists of vehicles, household appliances and different electronic products.
On the back of the EU-Korean free trade pact that went into effect in 2011, he expects more opportunities to come along the way.
“What happened in the last 3 years is a constant improvement both in volume and structure of Romanian-Korean bilateral trade. We estimate the total volume of bilateral trade could reach around $1.5-2 billion in the 3-5 years ahead,” the counselor said.
In the private sector, the two countries already maintain commercial ties with 200 Korean companies that are registered as foreign investors.
He said that the major industrial groups, including Daewoo Shipbuilding and Marine Engineering, Samsung, Doosan Heavy Industries and STX have come to the Romanian market since 1990, when Romania and Korea established diplomatic relationships.
Along with Stanica, his Hungarian counterpart also highlighted what Hungary has for foreign investors.
Before getting into his presentation, Levente took note of things that the two countries have in common in fluent Korean, such as having Mongolian spots, which are blue-colored birthmarks.
He emphasized that Hungary is a country that can connect people to most part of Europe with its advanced railway and port system, making the country an attractive site for business and investment.
“Budapest is known as a railway hub for the whole of Hungary and a large part of Eastern Europe, with frequent trains from Austria, Germany, Czech Republic and Slovakia,” the counselor said.
By Park Eun-jee [firstname.lastname@example.org]
By Park Eun-jee