Romania: History, Government, Economics and Their Influence on Global and Local Issues Essay

Romania: History, Government, Economics and Their Influence on Global and Local Issues

Romania is a member of the European Union and became one in 2007. Of the members of the European Union, Romania has the 7th largest population and is a member of NATO as well. Romania is also a member of the Latin Union (BBC MMIX, 2006). In this paper, light shall be shed upon the history of Romania and the economic scenarios that the country went through in varying stages of its history. We shall see how Romania began as a developing economy and suffered through difficult economic conditions before it came out as a country with a strong economic standing.

Romania through the 20th Century

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Through World War I

In this paper, we shall briefly look into Romanian history from the first incident that changed the world map at the dawn of the 20th century. Namely: the First World War. When the First World War broke out in 1914, Romania declared itself to bear a neutral stance but was later pressured to join the allies two years into the war. Romania declared war but was beaten down horribly four months into the war (Duffy, M., 2003). A large number of the Romanian army was killed or captured and a chain of events in which Romania played a submissive role led to the Treaty of Bucharest. However, Romania was back in the battlefield by late 1918 and what followed was a turn of events that led to creation of Greater Romania (Gallagher, 2008).

Through World War II

When the First World War ended, Transylvania and Bessarabia united with Romania-Old Kingdom. What followed was a series of political upheavals and transformations that completely changed the face of Romani on the world map. When the Second World War began, Romania once more attempted to remain neutral (Treptow, 1998), so much so that the Romanian army chose to retreat from Bessarabia as well from Northern Bukovina in order to avoid confrontation with the Soviet Union. In a nutshell, Romania had suffered about 300,000 casualties by the time the Second World War. However, the role of the Romania was not recognized by the 1947 Paris Peace Conference for the unconventional approach it adopted in the war regarding its stance (Duffy, M., 2003).

Through Communism

It was in 1947 that communism took hold of the roots of Romania and communist elements under the influence of USSR took control of Romania. In the decades to follow, Romanian resources were squandered by the communist elements and the economy of the country suffered tragically as inflation rates soared and unemployment rose (Gallagher, 2008). It was not until 1989 that Romania managed to free itself of communism and the slow but steady transition from a bankrupt market to a free market began (Turcescu & Stan, 2007).

The current economic system in Romania

The Romanian Economic System

Romania can be described as a company where the vast majority belongs to that of the upper middle class in terms of income. The economy of the country has always been heavily influenced by the history and culture of the country. After the country entered the 1990’s, it suffered through a decade of economic instability as a result of the overthrowing of the communist regime in the country. The series of events that contributed to the uprooting of communism from the country also led to the eventuality of the country being left to stand on its industrial foundations, which being relatively weak at the time, contributed in turn unemployment and inflation spells. As the decade passed, economic reforms on a structural level were established and incorporated. The fruits of these reforms became prominent as the country entered the next decade and macroeconomic intransience began to show signs in decreased unemployment and steadily decreasing inflation. In 2006, the Romania Statistics Office recorded a Real GDP growth of 7.7% (BBC MMIX, 2006).

Romania as a part of the European Union

Romania is a part of the European Union and is one of the leading exporters of clothing, textiles, industrial machinery, electrical equipment, metallurgic products, raw materials, cars, military equipment, software, pharmaceuticals, fine chemicals, and agricultural products as mentioned earlier. However, unlike most European countries the degree of intervention by the government in matters related to privatization and reforms is now relatively low as compared to the degree of government intervention in the late 1990’s and early 2000’s. There are a number of elements of the Romanian economy that have helped the economy reach its current stable standing. For instance, the flat-tax system is an active contributor to reason for Romania having the lowest fiscal burden in the European Union.

With the undeniable importance of trade partners rising with every economic development, Romania has developed solid trade relationships with Germany and Italy. However, this is also where the Romanian economy experiences its downside since the trade deficit has experienced growth rates as precarious as 50% in the last few years.

Role of Agriculture in the Romanian Economy

The current Romanian economy is heavily based upon services and is followed by industry and agriculture. However, Romanian economy is increasingly based on Agriculture and GDP grew rapidly in 2008 for the same reason. About 30% of Romanian populace is employed in the agricultural sector.

Current day economic scenario for Romania

Romania is now recognized as one of the fastest growing economies in Europe. Current economic growth is recorded to be around 6% and imports & exports are on the rise (BBC MMIX, 2006). Unemployment dropping rates have come to 2% and foreign investment is coming in as more companies establish production facilities in the country. However, widespread poverty still remains an issue to deal with despite these economically strong times. There are elements and signs of corruption in the Bureaucratic Infrastructure of the country that have been observed to deter economical activity that may have otherwise contributed favorably to the economy.

Critics have often opinionated that Romanian authorities have chosen to quote unrealistically low unemployment rates in order to deter the discourage the emigration of Romanian citizens in the search for employment opportunities. Since 1989 alone, statistics have shown that around a million of Romanians have gone abroad in search of employment opportunities (BBC MMIX, 2006). Speculators are also of the opinion that the agricultural sector of the country, unless not given sincere attention, may buckle and collapse due to slow and steady weakness. US library of Congress showed proof of this speculation in the fact that while agriculture based employment was 10% of the country’s employment count, it accounted for only around 10% of the GDP.

BBC MMIX. (2006, December 30). Romania: Key facts and figures . Retrieved February 2, 2009, from

Duffy, M. (2003, November 29). Primary Documents: Romania’s Declaration of War with Austria-Hungary, 28 August 1916. Retrieved February 2, 2009, from

Gallagher, T. (2008). Modern Romania: The End of Communism, the Failure of Democratic Reform, and the Theft of a Nation. NYU Press.

Treptow, K. (1998). A History of Romania. Center For Romanian Studies.

Turcescu, L., ; Stan, L. (2007). Religion and Politics in Post-Communist Romania. Oxford University Press.