Johannes Linn is a former World Bank Vice President. He is currently a Nonresident Senior Fellow in the Global Economy and Development Program at the Brookings Institution, Distinguished Resident Scholar of the Emerging Markets Forum, and Senior Advisor at the Results for Development Institute.
Good morning, Your Excellencies, Mr. President, Mr. Prime Minister,
Distinguished Participants, Ladies and Gentlemen,
It is a great pleasure and an honor for me to be with you this morning, to celebrate the 25th anniversary of the opening of the World Bank office in Romania.
The last time I visited Romania was some 15 years ago, in connection with a car trip that I undertook in my official capacity as Vice President of the World Bank for Europe and Central Asia. The trip started in Zagreb, Croatia. We crossed Serbia, traveled through Romania, and ended the journey in Bulgaria. This visit was a great opportunity for me to see much of your beautiful country, to learn about your nature, history and culture, to meet with Romanians of all walks of life, and to visit many of the development projects that the World Bank was able to support at that time.
Of course, a lot has changed in Romania, and indeed in Europe, since that visit. Even more has changed since the World Bank’s first country manager for Romania, Arntraud Hartmann, opened the doors of the Bank’s office in 1991. And yet more has changed if we look back beyond 1990, before the breakup of the Soviet Union and the fall of communism in Central and Eastern Europe.
When I was a young boy growing up in Bavaria in the years after World War 2, Europe was divided, with everything to the East of the Iron Curtain a red mass on the big map that hung on the wall of my school room. The World was divided into East and West, with the threat of the Cold War and worse looming over us.
Later, as a student, I was able to go by car from Munich across what was then Yugoslavia into Greece, but the idea that I would take a car trip from Zagreb to Bucharest and then on to Sophia could not be even a dream. I imagine that at that time many Romanians of my age might have longed to cross the borders freely to visit Western Europe but could not believe that this might ever happen in their lifetime.
We all live in a very different Europe today. While the European “house” is by no means a perfect construct, and while many Europeans today complain about shortcomings in the “rooms” they occupy in that house and about what amenities Europe offers them, it is important for all of us to remember what Europe was like for centuries before the end of World War 2 and long into the second half of the 20th century – a house divided, a house all too often at war with itself, a house that was destroyed as often as it was rebuilt. I remember the ruins of Munich after World War 2 and I remember the ruins of Sarajevo after the Bosnian civil war. Today I look in horror at the pictures of warfare in Eastern Ukraine, and beyond in the Middle East.
Ladies and Gentlemen, continuing to work toward and to preserve a peaceful and open Europe must remain a goal for all Europeans and for all Romanians, as we look towards the future.
But let me now turn to the journey that Romania has undertaken over the last 25 years. By most objective measures, Romania’s achievements over that quarter of a century have been outstanding.
o In the early 1990s, electricity blackouts happened several times each day; heating and hot water was available only a few hours. Now, Romania is one of the biggest energy exporters in the region. It has also the largest wind energy farm in Europe – an important step towards energy independence and sustainable development.
o Back then, factories were closing and parents were worried that their children would not have jobs or opportunities – now Romania’s young talent is attracting some of the biggest players in the information technology sector.
o Communication with the rest of the world had been deliberately limited for decades: in 1992 Romania had only one television channel. Now Romania has one of the fastest and cheapest Internet connections in the world.
o In the early 1990s, Romanians had to wait for days and weeks to acquire a visa to travel to the rest of Europe. Today, Romanians only need their ID cards to go to any other EU country.
o During the last 25 years, millions of Romanians have escaped poverty. Life expectancy in the country grew by more than 10 years; child mortality fell by two-thirds.
And let’s not forget that since the year 2000 Romania’s economy has grown at more than 7 percent a year (in purchasing power terms) – faster than any other EU member state.
Of course, the years since the 2008 global financial crisis have been challenging. But in the wake of the crisis, the Romanian government acted decisively, implementing one of the largest post-crisis fiscal consolidation efforts in the EU. This helped to rapidly restore market confidence and reignite economic growth. In 2016, Romania is in a better macroeconomic position than many other EU member states, with a public debt-to-GDP ratio of only about 40 percent, a small current account deficit, and the highest GDP growth of all EU member states estimated for 2016.
A key driver of these dramatic changes for the better has been a strong national commitment by every Romanian Government and political party for Romania to join the European Union. With the support of the international community the country implemented the reforms required for accession and it became an EU member state in 2007.
We in the World Bank actively assisted Romania in this ambitious and ultimately successful process and, I am happy to note that today, the World Bank remains committed to support your country in reaching for even more ambitious goals.