Political risk map shows Romania's progress, but PM-President dispute might hamper political stability

Romania has made a progress in recent years, but the dispute between the Prime Minister and the President might stay in the way of achieving political stability, according to the 2015 Political Risk Map report conducted by Marsh. Romania got 62.7 points on a scale from 0 to 100, a value below 49 meaning political instability. In the region, the Republic of Moldova, Ukraine and Serbia are considered countries with high political risk, their scores being below 49, while Bulgaria stays between 50 and 59. In Europe, the only countries that had a score of almost 100 were Switzerland, Denmark, Norway and Sweden. Increasing geopolitical tensions, political violence and separatist movements, together with the fall of commodity prices, aggravate political risks and represent the main obstacles for foreign direct investments, according to the 2015 Political Risk Map. Marsh’s report evaluates 178 countries based on three categories: political risk, macroeconomic risk and operational risk. Romania’s economy will have one of the fastest growth rates in CEE in the coming years, while household expenditures begin to recover. The Romanian Government will also spend more on supporting economic growth, reads a Marsh press release. “Due to the slowdown in exports, the economy will turn to an internal model. This will require further actions to eliminate corruption, to improve absorption of EU funds and to diversify the types of exported products for the country to return to the pre-crisis growth,” reads the statement. Romania has a score of 59.2 for short-term economic risk. In terms of operational risk, Romania scores 58.8, coming on the 50th place. The country’s score in terms of logistics risk is particularly weak – 52.4 – partially reflecting the country’s underdeveloped road network, the lack of highways being a particular problem. Romania has made a progress in improving the transport network in recent years, but a low rate of EU funds absorption will limit the development in the coming years, according to Marsh. Irina Popescu, irina.popescu@romania-insider.com