SIMILAR ARTICLES

Sudden and spectacular deficit growth: budget implementation on H1

  At the end of the first half of the year, the general consolidated budget registered a deficit of about RON 15 billion, an amount… Mai mult

World Bank – A scary report that no longer scares anyone: Latest assessment of Romanian emigration

Between three and five million Romanians work and live abroad. The 2017 UN estimate, rated as optimistic by the World Bank’s Report on Diagnosis of… Mai mult

In only one quarter: Incomes increased five times faster than GDP. For public sector employees, even faster

Data released by the INS for the first quarter of 2018 show that households’ living standards increased considerably compared to the same quarter of the… Mai mult

It is the Administrative Code’s turn: little responsibility for local elected officials, higher power for asset disposing, privileges

The Chamber of Deputies votes the amendments to Romania’s Administrative Code on Monday, amendments that strengthen the political control over local administrations. It is expected… Mai mult

Purchasing power declined for second consecutive month: situation by fields of activity

The average gross wage announced by the INS for May 2018 was 4,512 lei, 0.4% lower than in the previous month. Net nominal average wage… Mai mult

On “Union Day”: Romania is socially breaking apart – regional gaps are increasingly serious

de Marin Pana , 29.1.2018

Development disparities between Romania’s regions have diminished since the European integration, but the gaps between the relative incomes of people living in these regions have increased, according to data released by the National Prognosis Commission (CNP).

Moreover, the trend will continue in the next four years in Moldova, Muntenia, Dobrogea and Oltenia.

The future looks bad:

Polarization of the benefits at the individual level related to the economic results embodied in GDP per capita will have a significant increase exactly in the capital city region, where the living standard deviations in relation to the surrounding area will deepen at the highest rates (-6.2% in the South Muntenia region and -4.8% in the South-East region, see the table).

*

  • Disparity indices (national level = 100)
  • GDP/capita                                         Average net salary
  • Region             2017    2021    Evolution         2017    2021    Evolution         Balance

*

Gaps will increase:

According to CNP’s projections, net beneficiaries related to the increase in the economic performance will be exactly the most developed regions of Romania, namely West (+ 2.1% in salary income, without an increase compared to the national average), Centre (net advantage of + 3.5%) and North-West (+ 4.8%).

Although we shall witness a relative decrease in GDP per capita in the Bucharest-Ilfov region compared to the national average, the decrease in the incomes will be insignificant (-0.1%), which leads to the biggest advantage for the next four years in terms of GDP/capita and salaries (+ 9.8%).

Of course, it can be argued that salaries were anyway far too low in relation to GDP per capita in the regions that are more developed and too high in the regions lagging behind but what will count in the public perception and individual decision will be the opportunity to gain as much as possible from the current situation.

From this point of view, beyond the strong investment deficit in the East and the South of Carpathians (except for Bucharest but think about what would have happened if we had the capital city somewhere in the central region of the country) aggravated by the lack of modern transportation routes, a problem arises at the human level in terms of remuneration for possible efforts to bring the disadvantaged regions closer to the national average.

*

  • Regional gaps (West region =100)
  • GDP/capita     Net average salary
  • Region             Change

*

The data already consolidated as a trend over several years following the European integration (which, in theory, should have brought substantial funds for regional development) show that it is not worth the effort.

Social disintegration phenomenon and lack of targeted public investment

Discrepancies between the GDP per capita growth and the relative decrease in the salary incomes in the same four less developed regions of Romania compared to the national average appear to be outrageous.

So outrageous that the reaction of those involved has already been unleashed, with the decrease in the relative GDP in 2021 compared to 2014 in three of the four regions. Followed by the drastic punishment by an even greater decrease in the net average salary.

For reasons of profitability poorly channelled by the state, the cohesion between historical provinces suffers and the exodus of the most capable people to the single European labour market will amplify the discrepancies.

All in all, there are incontestable statistical signs that Romania is socially disintegrating, and the allocation of resources based on the principle of maximizing the earnings by ignoring the – economic or social – polarization creates monsters in the absence of targeted and coherent government policies. A state forced “de facto” to rapidly and massively make public investment in communication channels that would create business opportunities, to reverse this extremely dangerous trend.

Mergeți în homepage ›

Publicat la data de 29.1.2018

Lăsați un comentariu


NEWS

Ministry of Finance is drafting a new fiscal framework valid as of January 1, 2019

The Ministry of Public Finance makes a "comparative analysis" of the Tax Code and the Tax Procedure Code with a view to applying a new… Mai mult

Eurostat: Romania and evolution of employee number in public sector in an European context

Romania, Hungary and Slovenia are the member states that recorded the largest increase in the share of public sector employees in the total number of… Mai mult

Fitch confirms Romania's rating at BBB- but warns: fiscal loosening is risky for macroeconomic stability

Fitch Ratings confirmed on Friday Romania's rating for long-term foreign and local currency debt at BBB-, with a stable outlook, but warned that fiscal loosening… Mai mult

"We are working on a tax amnesty mechanism": announcement made by Minister of Finance

Finance Minister Eugen Teodorovici said at a press conference held in Bistrita that "a mechanism of this type is in progress”, a mechanism on tax… Mai mult

AOAR - Economy against new Criminal Code: businessmen denounce excessive protection provided to officials who cause damages to economy

The Businessmen’s Association of Romania (AOAR) asks the ruling coalition to explain the mechanism by which, after changes introduced on Wednesday in the Criminal Code,… Mai mult

Number of insolvencies increased by 12% in first five months. Suspended activities - plus 31%, dissolutions - plus 59%

The increase in the number of companies and PFAs in insolvency was 11.97% in the first five months of this year, compared to the same… Mai mult

Transport infrastructure in Romania needs EUR 70 billion - double as compared to existing resources

The investment needs in Romania's transport infrastructure exceed EUR 70 billion, while the available resources by 2030 are EUR 36 billion, according to the Transport… Mai mult

Refusal to work annuls entitlement to social assistance - bill voted in Chamber of Deputies

Deputies adopted a draft law on Wednesday whereby entitlement to social assistance ceases when a job is refused. The decision, Agerpres announced, was taken with… Mai mult

Subsidy of RON 900/month for employing a graduate based on contracts of indefinite duration

The National Agency for Employment (ANOFM) grants subsidies of RON 900/month to employers who employ graduates of educational institutions, with contracts of indefinite duration, within… Mai mult

C.P. Tariceanu, before the heads of Senates from EU: The European Commission has encouraged the parallel state, in Romania it is like in the 50's

Calin Popescu Tariceanu (foto) delivered a very tough speech on Friday, in the Senate, addressed to the European Commission, which he accused of encouraging the… Mai mult

National Bank of Romania wants to lower indebtedness limit in granting loans to individuals

The National Bank of Romania (BNR) sent to banks for consultation a draft amending Regulation 17/2012, which provides for a consistent lowering of the indebtedness… Mai mult

High impact provisions: Senate has adopted PSD-ALDE amendments to the Code of Criminal Procedure

Senators adopted on Wednesday the draft for amending the Code of Criminal Procedure, by 74 votes for to 28, against. The bill goes to the… Mai mult

RBL: Workforce crisis is worse than economic crisis - 3.4 million Romanians have left the country in last 10 years

Migration is one of the most serious problems facing Romania at this time, along with the lack of infrastructure. However, the return of Romanians to… Mai mult