Volume 30 / 2010

 

ROMANIA'S EXTERNAL DEBT SUSTAINABILITY UNDER CRISIS CIRCUMSTANCES 

Authors: Gheorghe ZAMAN, George GEORGESCU

Abstract. Even if one could not say that governments and international organizations took the most appropriate rescue and/or stimulus packages, the worst effects of the financial crisis seem to be overcome. Signs of recovery occurred in the developed countries by the end of 2009, but the question of sustainability is arising. Romania was hit hard by the crisis in 2009, suffering a severe contraction of the economy, estimated at 7.1 percent. The worsening of the external and internal financial framework of Romania and the danger of a currency market crisis urged the need for a financing agreement with IMF. The study shows that, more or less, the parameters adapted for Romania regarding the MLT external debt sustainability entered already the significant risk zone. In the baseline scenario, assuming favourable economic circumstances, an exit of Romania from this risk zone could be possible by 2015. In the alternative scenario, an excessive burden of external debt compared with financing resources needed to comply with the external payments obligations would maintain Romania on the brink of default risk. Supplementary risks associated with unfavourable developments of the external context and also with pressures coming from a non-restructured public debt could make the default situation even unavoidable.
Key words: international financial crisis, global recession, anti-crisis measures, public debt, external debt sustainability, country default risk
JEL Classification: C10, E44, E47, G01, G15, H63, H68
 

TRANSITIONING FROM A COMMAND DRIVEN TO A MARKET DRIVEN ECONOMY: A METHODOLOGY USED TO ASSIST POLAND'S PACKAGING INDUSTRY 

Author: Dr. Richard B. CONNELL

Abstract. This paper contributes to industrial development methodology by advancing a simple matrix that can be used to assist policy makers to determine priorities for developing different sectors (Strategic Industry Units or SIUs) of their economies.
It presents the matrix, illustrates how it was used to help the Polish government set priorities for which sectors/subsectors of the packaging industry it should support with industrial policy initiatives and how they were determined. It also explores some of the government policies and programs that were suggested to support industry SIUs adjudged to be attractive, but that were not competitive yet could be made to become so.
Key words: industrial development methodology, public sector strategy methodology
JEL Classification: B4; D6; E1; K0
 

ACHIEVING EXCELLENCE THROUGH MEMORABLE TRAVELER EXPERIENCE AND CHALLANGES, APPORTUNITIES AND SOLUTIONS FOR ROMANIAN TRAVEL AND HOSPITALITY INDUSTRY 

Authors: Theodor Valentin PURCĂREA, Valeriu IOAN-FRANC, Monica Paula RAŢIU

Abstract. Hospitality industry is probably the fastest growing one in the world. The tourism company should endeavour to shape the overall perception of value in this industry. What matters is the provision of experiences, but not services. To meet international standards the Romanian tourism should consider challenges, opportunities and solutions to cope with the specific requirements in this field.
Key words: Hausehold Behaviour; Sustenable Development; Regional Development Policy; Tourism
JEL Classification: D1; D6; Q01; R58; O24; O13

 

PROPAGATION EFFECTS OF TAXES IN ROMANIA: AN INPUT-OUTPUT ANALYSIS 

Authors: Gheorghe ZAMAN, Marius SURUGIU, Camelia SURUGIU

Abstract: The Input-Output model (IO) is an important tool of economic analysis, providing a predictive analysis framework for economic changes, if properly used. In developing measures, strategies, etc. at macro level it is important to identify the links that occur between branches of the economy for a better understanding of "enabler" branches which have the highest contribution to output creation. In this research the IO method was used to analyze effects of taxes within the Romanian economy, based on data provided by the National Institute of Statistics (NIS), using IO statistical tables for 2000 and 2006.
Keywords: Input-Output Analysis, Tax Multipliers, Forward Linkage, Backward Linkage, Romania
JEL Classification: C67, D57
 

SUSTAINABLE ECONOMIC DEVELOPMENT: THE MAIN PRINCIPLES AND THE BASIC EQUATION 

Author: Dmitry CHISTILIN

Abstract. This work offers system and information content of the following economic categories: development, sustainable economic development. The author has formulated the fundamental principles of sustainable development: the principle of minimum resource dissipation and the equation of self-organization, the law of conserving the economic potential of a social system. The basic equation of development has been formulated. The model of sustainable development is viewed on the basis of the equation.
Key words: economic system sustainable development; economic system selforganization, model sustainable development of the economic system
JEL Classification: Q1; O2; Q01
 

THE ROMANIAN MUNICIPAL BOND MARKET AND THE INTERNATIONAL FINANCIAL CRISIS 

Authors: Valentina VASILE, Mirela MATEI

Abstract: In Romania, the bond market was set up later, comparatively to the equity market. This market is in a development process, but the international financial crisis has affected even the interest of investors in bonds. The secondary municipal bond market is not a very liquid market because these securities are bought from the primary market and held in portfolios by investors because these bonds have a low risk. The issue of these bonds is correlated with the financial independence and the level of decentralization of the local public authorities. The issuance of these bonds is correlated with financial independence and decentralization level specific to local public authorities. Under crisis conditions, the volatility of this market is more significant, the increasing deficits of local budgets decreasing the interest of the middle-class in investing in such financial instruments.
Key words: bonds, crisis, stock exchange, municipalities
Jel Classification: G01, G 12, G 24, H 54

 

MAIN ISSUES OF R&D FINANCING IN ROMANIA 

Author: Steliana SANDU

Abstract: Under current circumstances, the acute shortage of financial resources - particularly of budgetary resources - makes it very difficult to provide for the funding needed to carry on the activities of research, development and innovation (RDI), which are acknowledged, in all experts' opinions, to play a crucial role in overcoming crisis and economic recovery. It is, thus, more important than ever that the policy makers be aware of the severe consequences that might come forth due to the lack of governmental support for these activities. A strong commitment to responsibly setting priorities, designing policies and instruments for performance growth, and to mindfully saving and using the limited resources available to RDI is, therefore, critical.
The purpose of this paper is to analyse and assess how challenges related to the provision of financial inputs for research activities are addressed by the national research system, especially in the new condition of economic crisis. Its actors have to ensure and justify that adequate financial and human resources are most appropriately mobilised for the operation of the system.
A central issue in this domain is to choose the appropriate modalities and instruments for transforming effects of the resource mobilisation in visible performance increasing of the R&D system and, also, for transferring the knowledge results into economy. The paper aims to analyse and assess specific barriers faced by the circulation of the financial flows that must be overcome by research and development actors.
Key words: R&D financing, R&D financial flows, European Research Area
JEL Classification: O31, O33, O38
 

TAX EVASION DYNAMICS IN ROMANIA REFLECTED BY FISCAL INSPECTION ACTIVITIES 

Author: Corina-Maria ENE

Abstract. The paper aims to provide a panoramic view of the dynamics of tax evasion in Romania, reflected in terms of fiscal inspection activities. The author used the official data published by the institutions with attributions on the line of identification and fighting against tax evasion (National Agency of Fiscal Administration and Financial Guard) with the view to reflect the real situation concerning the number of inspections, quantify and sanction tax evasion for 2003-2008 periods. Although the number of fiscal inspections and the number of tax payers who have violated the rules of fiscal discipline decreased compared with 2003, the frequency of tax evasion remained. At the same time, based on the data referring to the level and dynamics of the tax dodger phenomenon appreciations have been made regarding the fiscal discipline of the Romanian tax payer and to the attitude of the qualified institutions in discovering and sanctioning the fraudulent tax evasion. In this respect, the author observed that the level of willingness of tax legislation in relation to the Romanian tax payer has not changed considerably. The level of identified tax evasion reported to real GDP increased slightly. This situation can be interpreted as a success of institutions in charge of identification and fighting of tax evasion, a result of the increase of fiscal inspection number and detection probability, but also a result of GDP growth at a rate lower than the identified tax evasion. The author has also tried to find a causality relation between the option for tax evasion and corruption. The author found that a corrupt environment facilitates the decision to evade depending on detection probability, penalty system and bribery level as discouraging factors for tax evasion. The level of identified tax evasion is smaller than the real level of entire tax evasion, an important part being impossible to determine because of corruption.
Key words: tax evasion, fiscal fraud, fiscal inspections, fiscal discipline, voluntary fiscal compliance, underground economy, corruption
JEL Classification: D70, D73, E62, H26, H30, H60, K34, K42, O17, P37
 

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