Yesterday I attended and done a graphic recording session for yet another interesting event, titled “What we’ve learned in 5 years of recession”, organized by Oxygen Events at the National Bank of Romania. It was a wrap up of the evolution of the Romanian economy in 2013, with a strong focus on banking and top notch speakers.
Many important people from banking and business were on the stage, like Steven van Groningen (President, Raiffeisen Bank Romania); Mișu Negrițoiu (Chairman, ING Bank Romania); Wargha Enayati (President, private clinics network “Regina Maria”) and Melania Hăncilă (Manager, Deloitte Consultancy Romania), to name just a few. Mugur Isărescu, the Governor of Romanian National Bank, was once again couldn’t make it to the event, and continues to be a black swan of the banking sector.
So what have we learned in five year of recession? In two words: not much. There are two major solutions to the lack of capital that still don’t (and inexplicably won’t) get enough attention:
1. Reforming the public sector;
2. Accelerating the absorption of irredeemable European funds; there are €36 billion available for Romania ’til 2020 – a huge amount of money.
Going further, the (“unstable”, as some put it) 3% growth of the economy in 2013 is the highest since the very beginning of the recession, in 2008. It happened mainly due to the latest investments in agriculture, which finally brought some palpable results, and due to the exports of industrial production.
Unfortunately, both the shaky political context and a rather stuck banking sector – where businesses still find it hard to access credits – determines investors to think twice before bringing in their cash.
But the banking sector was given an additional pressure to hold on its shoulders, being stamped as the “engine of the economy” (or at least the “combustion”) because many analysts believe that the market can only grow through investments. As long as foreign investors sit on their piggy-banks, local investments can be made only through credits.
Banks chuckle at the idea of relaxing their crediting policies, in the ever-adventurous search for capital and solutions for growth. But it’s hard to believe it will happen soon, on a market where, before the crisis, banks used to open 1.000 branch offices a year. Since 2009, they closed more than 500 of them.
While it is expected that the economy will continue to grow slowly, 2% estimation for 2014, there still are a lot of skeptical people who say that bank couldn’t restructure their thinking, least of all their business model. The only encouraging thing is that entrepreneurs found a new way of growing. Slower, but riskless, without burdening credits: through their own forces.