In Romania there are two information sources linked to foreign investments, the National Office of the Trade Registry (ONRC) and the National Bank of Romania (NBR). Their reports differ to such an extent that the level of investments and the countries they originate from are completely unclear.
Thus, every month, ONRC shows that foreign investments are scarce, standing at several million dollars per month, which prompts analysts’ laments and acid press commentaries, while in NBR’s Bulletin, where they are little discussed, they are five-six times higher.
On the first five months of this year, according to information supplied by ONRC and taken over by the Monthly Statistical Bulletin of the National Statistics Commission under the title “The situation of foreign investments,” foreign contribution to capital amounted to 60 million dollars, while, on the same period, the column “Direct investments” included in NBR’s Bulletin shows 250 million dollars.
“This problem should be sorted out once and for all,” says Lucian-Liviu Albu, director of the Prognosis Institute within the Romanian Academy, who thinks that the indicator included in NBR’s bulletin could be deemed as more accurate.
In fact, according to explanations by officials of the two institutions, ONRC only registers the share capital subscribed in foreign currency at the moment companies are set up, while NBR’s balance also includes, in line with banking reports, the sums brought into the country and invested by the already-existing companies, which were included or not in the share capital, as well as everything SOF sells to foreign companies.
“For absolutely everything SOF sells, we only receive data related to the equivalent in lei. Generally, even when a foreign investor buys the majority stake in a certain commercial company, we receive the same lei-denominated value,” ONRC sources state.
Thus, statistic studies display, under the capital inflows category, only the value in lei, and not the value in dollars, as the normal procedure should be.
“I think these are registration flaws I would not want to comment upon. ONRC should probably register capital raises as foreign investments, too,” says Mugur atet, NBR spokesperson.
Dan Predoiu, a director with SOF says that the difference between ONRC and NBR statistics pertains to the calculation methodology.
“ONRC can only register the capital raise, and this in case the status of the respective company allows it to register it in foreign currency,” says Predoiu. Law 31/1990 regarding commercial companies allows only joint ventures to raise their share capital in foreign currency.
“It is clear that what ONRC reports is a legislative aberration especially when a direct investment means buying stock and operating technology imports,” Predoiu added.
He says that, from a legal point of view, capital inflows are only registered with NBR in line with the foreign currency regime, while companies’ accounting files only show that they registered expenditures for investments.
The clearest example is that of Romtelecom’s privatisation because in ONRC’s files the Greek company OTE is only registered with a share capital raise worth 77.5 million dollars, excluding direct investments standing at 300 million dollars.
“Nobody can accuse either ONRC or OTE because both institutions proceeded in line with the current legislative framework,” Predoiu also says.
Each month, ONRC makes public the origin countries of the capital invested in foreign currency and embassies or analysts work with these figures to account for or estimate the availability of French, Italians or Germans for investing in Romania.
NBR does not report countries the capital originates from and does not make any reference to data made public by ONRC. The National Statistics Commission does not make any reference to NBR data, either.
According to CNS Bulletin, all analysts or foreign investors take ONRC’s report “The situation of foreign investments” for granted, not knowing that, in fact, it only represents a small part of the real capital flows that enter the country.
“I have been in Romania for six months and I have not got used to this system or the different figure reports, yet. I encounter problems because I do not know where this difference comes from. Anyway, NBR’s reporting seems closer to reality,” says Gael Marin, editor of the information bulletin of the Economic Advisor of the French Embassy in Bucharest.
Romanian officials have been wailing for a long time that foreign investments do not enter our country, but since work instruments are lacking it is difficult to say if policies meant to attract foreign investments are efficiently adopted.