Gerke WITTEVEEN, President of Netherlands Romanian Chamber of Commerce (NRCC) points out in an interview for The Romania Journal that foreign investors generally take a more long-term view when it comes to doing business in Romania than before.
You are here for long time already. Since you came to Romania, have you noticed any change in the domestic investment environment?
The amount of investments is obviously tied to the overall economic cycle, which has seen its ups and downs over the last decade. I would say the biggest change over the last decade is in the maturity and transparency of the market.
That is certainly true for financial markets. New legislation has supported the development of primary and secondary markets. If you for instance look at the Bucharest stock exchange, you see a strong growth both in terms of listings and trade volumes.
I think it is also fair to say that foreign investors generally take a more long-term view when it comes to doing business in Romania than before. In most sectors, the markets have seen increased competition, also from domestic companies. This means companies have to meet higher standards to be successful in Romania.
The Netherlands is seen as a “best practice” example. What would you bring from your country to Romania and vice-versa?
First of all, I would remark that Romanians and Dutch generally work together very well, because they possess common traits: both countries have a business culture that is internationally oriented and has a high degree of pragmatism. These similarities make it easier to bridge cultural differences.
One of the core qualities of the Dutch is that generally plan ahead and take a long-term view. They take a very structured approach to problems that arise and analyse consequences before making decisions. The Romanians on the other hand are generally great at adapting, reacting to fast-changing circumstances, and finding ways to get things done.
The Dutch long-term orientation and the Romanian adaptability create a winning combination.
The role of a chamber of commerce is to attract investors and consolidate the business partnerships between two countries. On what NRCC puts its focus?
These two elements are strongly intertwined. The NRCC is a network organisation for any business with an interest in Dutch-Romanian business cooperation, irrespective of size or origin. Our almost 200 members are a variety of large corporations and SMEs, Dutch and Romanian, and spread across a wide range of sectors of the economy.
Potential new investors in Romania can benefit from the experience of our members. These are bundled in NRCC’s nearshoring guide, published every two years and now at its 5th edition. It is written by our members and provides practical information for companies looking to set up business in Romania.
In terms of consolidating the business partnerships between the countries, we organise various events for the existing Dutch-Romanian business community. Our knowledge events serve to inform and support our members on current topics. Our networking events provide opportunities to meet each other and develop new business partnerships.
At the time of your appointment as the new NRCC President, you mentioned that one of your objective is to facilitate new opportunities for cooperation, and to create the most effective platform possible, supporting the interests of NRCC members. Concretely, what do you have in mind?
A strong example is the NRCC Night of the SMEs. SMEs and start-ups are increasingly the motor of economic development many countries. However, the infrastructure for supporting this type of enterpreneurship in Romania is currently still limited.
Launched successfully in 2015 in Bucharest, the event is aimed to the decision makers of SMEs (Small & Medium Enterprises), using the set-up of a Gala Dinner, where the focus is on Knowledge Exchange channeled in various Key-Topics, Interaction and Networking. The first 3 editions organized in Bucharest proved to be of added value for the SMEs attending reason why NRCC decided reach out to the SMEs in other regions of Romania, the March 2017 edition in Cluj-Napoca being the first.
What are the fields of interest for Dutch investors in Romania?
You can find Dutch enterpreneurs in almost any sector of the Romanian economy. Not surprisingly, industries where the Netherlands have a strong tradition are well represented: transportation & infrastructure, technology and agriculture.
What is your message to the Dutch investor who wants to come to Romania?
Romania is still a country with a lot of untapped economic potential. Its skilled and English-speaking labour and geographical position create a great starting point for any foreign investor. When considering investing in Romania, take some time to understand the people and the culture. And be willing to adjust and adapt to locally changing circumstances.
Considering your experience in the insurance industry, how this evolved locally in your opinion? Where would you place Romanian insurance market in Europe?
The insurance market is relatively small compared to most other European markets, and for the moment dominated by the car insurance. Although the market for other insurance products has a significant growth potential, the pace of growth is rather slow. As an example, Romanians interest towards health insurance increased lately, but the health insurance class still holds a small share in insurance market.
The current status of the local life and health insurance market is mostly linked to the cultural inheritance of the Romanians that rather prefer to prepare for the best even they are expecting the worst. Moreover, taking into account that the insurance market is a GDP led sector, the Romanians’ disposable income has a significant impact on their spending on insurance: Romanians spend on life insurance up to 20 EUR per capita, compared to the European average of EUR 200 per capita. Nevertheless, there is room for improvement in terms of the awareness of the Romanians about the role of the insurance products in protecting the family, the health and financial future. To address this, the insurance industry and the regulator together run various financial education programs.
In most European countries, insurance plays a fundamental role in providing financial security to people, on top of what the state can provide. Given an ageing populations and increasing life expectancy across Europe, this is more relevant than ever before. Coming back to health, the Netherlands is for instance a country where private health insurance is instrumental to provide funding and ensure access to high-quality health care for every citizen.
With increased public awareness and supported by the right laws, regulations and fiscal incentives, the insurance market in Romania can grow considerably and provide people the financial security they need.
Based on the available data, what do the economic relations between the two countries look like?
The fact that the Netherlands is the biggest foreign direct investor in Romania is well publicized. 25 percent of the FDI in Romania comes form the Netherlands. Obviously, this is a relevant measurement of the level of Dutch investments in Romania, and mostly driven by a number of large corporations. However, to me that is only part of the story.
It is equally important to mention the large number of small and medium sized Dutch companies and individual entrepreneurs who are active in Romania. More than 4500 Dutch companies are registered in Romania. When you take those numbers into account, you can truly understand the strong economic ties between the Netherlands and Romania.