Archive

No. 3, 2004

Interview with H.E. Dumitru Dorin Prunariu,
Ambassador Plenipotentiary and Extraordinary of Romania to Russia

DEVELOPING FRIENDSHIP TIES


The relations between Russia and Romania are deep-rooted and time-tested. Today they are successfully developing on the basis of principles of equality and mutual benefit.

Q: Your Excellency, how would you evaluate the Russo-Romanian relations until the present time?

A: The year 2003 marked the 125th anniversary of Russo-Romanian diplomatic relations establishment. This important historical event followed the end of the Russo-Turkish war (1877-1878), when our armies fought as allies. As a winner, Romania declared its national independence. Russia would become one of the first states Romania established diplomatic relations with.

Contacts between our countries had existed long before those relations were established. In the beginning of the 17th century, Petru Movile, Romanian by origin, the head of Kiev Orthodox Church, in many ways promoted cultural integration with Russia. In the same 17th century, Niсolae Milesku Spataru, a Moldavian nobleman, represented Russian diplomatic mission in Peking.

Another famous Romanian - Prince Dimitrie Cantemir - was highly respected by the Czar Peter the Great. It was in Russia that he wrote historical and literary works, which brought him European fame of the writer of the Age of Enlightening. His son, Antiokh, made a serious contribution in the occurrence of Classicism in Russian literature, reformation of tax system, and with honour represented Russian diplomatic interests in London and Paris.

At the beginning of the 19th century, Russia introduced the Organic Regulations in the Romanian Principalities, Walachia and Moldova. Therefore the unity of the Romanians that lived in the two states was recognized and the necessary conditions for their unification in 1859 had been created.

As for economic relations, a little-known fact could be mentioned, that between 1911 and 1917 a Russo-Romanian joint venture operated in Grozny, which was not the only example of cooperation in oil production area at that time.

The mutual trust of both countries was so strong, that when more than half of Romania was under German occupation during World War I, the entire Romanian treasury was transferred to Moscow to be safely kept in the Kremlin.

Speaking about mutual cooperation in the end of the 20th century I cannot but mention one prominent event I was personally involved in. This very first Russo-Romanian space flight was destined to become the culmination of bilateral cooperation in the framework of the international scientific collaboration.

Now there is a firm legal basis for our bilateral cooperation, the Treaty on the Friendly Relations and Cooperation between Romania and the Russian Federation, signed in Moscow in 2003 by the Presidents Ion Iliescu and Vladimir Putin.

Lately, the Government of Romania has been promoting the eastern orientation of international cooperation. Having certain strategic advantage due to its geographic location, Romania is doing its best to become the "engine" of cooperation development between Europe and Eastern region in political and economic spheres. All this can provide big future to our countries' bilateral collaboration.

Q: The relations between Russia and Romania are taking new shape in view of Romania's membership in NATO and the forthcoming entry to the EU. What are their projects in this connection?

A: The period of the last two years has marked the re-definition of Romania's strategic role in the new global and regional context now that our country is engaged in the international integration processes, the main achievement of which was our advantageous accession to NATO this year. We hope that we would sign the Accession Treaty at the beginning of 2005, so that we would become a true EU member on January 1, 2007.

Romania is a member of the NATO-Russia Council. The problems of new international challenges, the strategies of collective security against terrorism, weapon and drug traffic, weapons of mass extermination, religious fundamentalism and extremism are discussed there. Constructive economic, scientific and technical, political and military collaboration are equally important topics for the Council.

As far as commercial and trade connections are concerned, their development is foremost for the Government of Romania, especially in consideration with its future EU membership. For if we did not have consolidated economic interests with Russian Federation prior to the entering the EU, Romania would not have serious reasons for their active maintenance in the Europe of 27.

Recently special consultations on the possible effects of Romania's entering the EU between the Ministries of Russia and Romania took place. The results of discussions in question are quite optimistic - neither of the partners has a reason to worry about the consequences.

Q: In your opinion, what are the main results of transition to market economy in your country?

A: At the present time Romania is at the final stage of entering the Eropean Union, and the country is adamant to carry on its reformation to create a functional market economy. We are very close to the moment to be acknowledged as a country of such an economy, and this will be highlighted in the Country's Annual Report in October this year.

In recent years, Romania made serious steps towards macroeconomic stabilization and fast economic growth. As a result, investment climate has approached to European standards, thus stimulating foreign investors to regard Romania as a profitable destination.

In 2003, the direct foreign investments flow in Romania reached $1.6 bln., meaning a growth of 37.6% compared to 2002. This trend is going to be maintained this year, and the volume of foreign investment is going to amount to $2 bln. About 60% of this sum is to originate from European market.

The Romanian legislation offers to the foreign investors national treatment, giving them opportunities to invest in all economic sectors, to repatriate their capital and profits, as well as protection against expropriation and nationalization.

With an annual average growth rate of 5.2% in the period of 2001-2003, Romanian GDP had the highest level of growth in the entire geographic region. In the first three months of this year, the economic growth rate was 6.1%. This turned out to be the highest achievement after the year 1989, and it proves the stable economic progress. The disinflation process continued, and it has a clear perspective to reach the level of 9% by the end of this year, which would be a serious success.

As a result of the positive evolution of our country's economy, the rating agencies Moody's, Fitch, Standard & Poor's have raised their ratings for Romania, as a reflection of the solid competitiveness of the Romanian economy, sustained by a robust macro economical growth determined by exports and investments. Thus, Romania's long-term rating was increased from "positive" to "stable".

The present situation of the Romanian economy proves that the government tries to create the most favorable climate for investments in order to attract as much foreign capital as possible.

Q: In this context, how would you evaluate the activity of the Russian companies and businessmen?

A: Big companies from the Russian Federation are important shareholders in Romanian enterprises, like metallurgical industry, crude oil refining and oil products marketing, manufacturing of oil production equipment, etc. Among them are JSC LUKOIL, Mechel Group and TMK Group.

Romania is interested that these companies, privatized with Russian capital, carry out their activities under the best circumstances and contribute to the growth of the Romanian export to the Russian Federation.

Still, as Romania has one quarter of the commercial deficit of a single origin - the Russian Federation, it is clear that there is something going wrong here. If Romania can sell products worth more than $10 bln. in Europe and America, why cannot it sell products worth $100 mln. in Russia? To improve this situation we should use the potential of Russian regions, not only Moscow and St. Petersburg's, and stimulate Russian companies operating in Romania to generate exports to the RF.

It is true that the political changes that occurred immediately after 1989 led to breaking up some economical partnerships that have not been recovered to the level of the previous potential. We know that the different rhythm of reforms implementation in Romania and in the Russian Federation, as well as the options of the new private companies that looked for supply and selling products markets, where access to payment means was easier and where the security of transactions was higher, led to an asymmetry and to little diversification in the Romanian-Russian exchanges. However, I also think that we are facing a great inertia or ease if you want, in both Romania and Russia. We are stuck in obsolete schemes or in lack of initiative.

That is why I think that we have to think together of cooperative, concrete actions at a large scale, capable to confer more stability in our commercial exchanges and to ensure their development.

With a view to promoting Romanian export on the Russian market, an agreement has been concluded between Eximbank SA (Bucharest) and JSC Vneshtorgbank (Moscow), based on which a buying credit has been open, in favor of Russian companies, worth $10 mln. According to our information, this credit line has not been used yet. It would be good for the Russian interested companies to know it in order to stimulate the use of this facility, especially after the opening of a branch of the Romanian bank in Moscow.

The business environment and the rules applied to it are very important for the stimulation of business. In Romania, we make efforts to get closer as much as possible to the requirements of the unique European market. We are interested in seeing the transformations in Russia and we encourage Russia to join the World Trade Organization as soon as possible.

Q: Your country is steadily continuing its economic development. How would you evaluate LUKOIL's contribution in this respect?

A: LUKOIL was the first big Russian company to come to the Romanian market, and its success, in spite of some inevitable difficulties, became a positive example for other companies in your country, which are represented now in Romania.

Taking into account the high position LUKOIL already has on the Romanian market, the modernizing and the reopening of the Petrotel refinery, we can consider that the exploring period is over and that we have to reach a new stage in our cooperation.

In this respect, we are expecting LUKOIL to intensify the buying of Romanian equipment for all its production units in the Russian Federation.

Q: The Black Sea protection is of vital importance for all the states in this region. How do you see the development of the environmental situation?

A: The Black Sea is one of the most remarkable marine regions in the world. It gathers six countries around it with a total population of 160 mln. people. All of these countries have known a significant economical growth in the past half-century, using both the Black Sea and the rivers flowing into it in an intensive way, ignoring the negative effects on the ecosystem for many years. Excessive fishing, the development of the coast areas, pollution have done harm to the bio-diversity of the sea and its use by the population, including leisure activities.

Basically, the ecological degradation of the Black Sea has started from the 1960s. In the last decade, a series of international programs were introduced to improve the ecology of the Black Sea. These programs were stimulated by the provisions of the Rio Declaration on the Environment and Development, adopted in Rio de Janeiro in 1992. Thus, the Black Sea Environmental Program, based on the Convention for the Protection of the Black Sea Against Pollution have been started.

Countries from other continents are taking part in this program as well, together with international organizations such as United Nations Development Program/Global Environment Facility (UNDP/GEF), United Nations Environment Program (UNEP), World Bank, World Trade Organization (WTO), International Atomic Energy Agency (IAEA), NATO Science for Stability Program, and the programs of the European River Ocean System (EU EROS), CoMSBlack (collecting physical data during cruises on the Black Sea), EU-Tacis, EU-Phare, United Nations Office for Project Services (UNOPS).

Romania and Bulgaria, as future European Union member states, are obliged to comply with the European legislation in the area of saving the Black Sea ecology.

As for reduction of the risk of polluting the sea because of oil transportation with oil tanks, there are already projects that could be implemented. We are talking about oil pipelines that could considerably substitute oil tankers. The pipeline, proposed as a project by Eastern European countries like Romania, Serbia and Montenegro, Croatia could unify Constanta (Romania) with Omnisalj (Croatia), with a possibility to extend it to Trieste afterwards.

Of course, in this scenario for the ecological protection of the Black Sea, with all the encouraging results obtained so far, we should not forget the difficulties related to its implementation. The financial problems of the Black Sea region countries represent one of the major difficulties in mobilizing the necessary forces for implementing this strategy. It is rather desirable, that in the future, some of such activities would be financed by private companies, which have strong positions in the countries of the Black Sea region.

However, nothing can be resolved overnight, but in the perspective of the following decades, the ecological future of the Black Sea is certainly becoming more optimistic.

Q: Your Exellency, what are your nearest plans in this country?

A: The nearest plans are, in fact, long term plans. They do not represent less than continuing to develop friendship relations as well as collaboration at economical, political, social, cultural level and in other areas between our countries. The human relations have a special relevance in the development of these relations. A better knowledge, reciprocal understanding and respect for each other's interests are essential elements in the fulfillment of this approach. In many areas, Romania's interests coincide or are very close to the Russian Federation's ones. I consider that we have sufficient elements that, if used wisely and effectively, can be a solid basis to reach the proposed goal.




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Oil of Russia, No. 3, 2004
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