Embassy Press Release

US Ambassador Nicholas F. Taubman's Speech on the Occasion of the Joint AMCHAM/Embassy Outreach Event

November 20, 2007
Cluj Napoca

US Ambassador Nicholas F. Taubman (Left) and Michael Mix Project Manager for the Transylvania Highway (Right) inspecting near Cluj the progress on Transylvania Highway. Cluj, November 20.

Emil Boc, Mayor of Cluj Napoca (Left) and Ambassador Nicholas F. Taubman (Right) in Cluj, November 20

First of all, I would like to thank Mr. Nicolae Beuran of the Cluj Chamber of Commerce and Industry for helping to make this meeting possible. Thank you, sir. I have heard nothing but praise for your organization, and I see now that praise is well justified. I would also like to thank our partners at the American Chamber of Commerce (AmCham) for their steadfast efforts to promote a better business environment in Romania. Radu Enache of Hewlett Packard and AmCham's President, Vasile Iuga of PriceWaterhouseCoopers, Shahmir Khaliq of Citigroup, the last three of whom were delayed leaving Bucharest today, so they’re not here at present, but we hope they’ll get here before lunch. In case, thank you all and thanks to AmCham Executive Director Anca Harasim and Teo Stoian for their hard work and planning to make this event happen.

And finally, I would like to thank all of you here today for representing the proud spirit of entrepreneurship that makes this trip possible. As a lifelong businessman myself, I am pleased to be here in Cluj with you to recognize the healthy development of this spirit. Cluj is a city and a county with the right kind of trajectory, UP! Sure, you have certain inherent advantages: geography; a young, educated workforce fed by your excellent universities. But that's not the end of the story. Cluj has established a reputation as a city that says "yes." Yes to innovation, yes to creativity, yes to opportunity. I am glad to see that this culture of "yes" has caught the attention of American companies as well, many of whom are here in this room. Whether large, multinational companies like Emerson or smaller entrepreneurs, your efforts are being noticed.

Yesterday afternoon I spent the entire afternoon going out to see the Transylvania Highway and where it’s located. It was a sight to see! I must tell you, I think that your entrepreneurship in getting that highway, that major expressway in Romania here, in this part of central Romania, I think it’s a real achievement on your part. I’m not sure that everyone realizes what that will mean to this area. I think the state of Romania and Romanians will be amazed at what will happen to the path of this highway. It will bring industry and commerce to places where that has never been before and it will be a real boom to you. I understand that the road got to be where it is through the efforts of the people, of the citizens of Cluj and I congratulate you on that. it is a fine achievement and you got there first in Romania and I’m glad to see that you did because it will mean a great deal to you and to the future of your city and the future of your citizens.

And that's important. Not only for the future of the Romanian economy, but for the future of Romanian society as a whole. I have met with young Romanians throughout the country, and I can tell you there is no shortage of talent here. I just came from meeting such a group at Babes-Bolyai University. I tell you, if I were still running my company, I'd snatch these kids up in a second. They’re good, they’re ambitious, they want to succeed. The question is, as you all know, how to keep this talent here. How to keep Romania's greatest resource working for the benefit of Romania. You train these young people, you pay for their education through your taxes and your efforts and then they leave the country the first thing after they graduate. That’s something you want to change and work hard at.

The answer to this is to foster a clean business environment that encourages growth and investment. If people perceive a rosy future for themselves and their children in Romania, they are less likely to leave. If young people feel that skill and talent are rewarded, rather than connections and short-cuts, they are likely to stay. There is no doubt that Romania has made incredible strides in the last few years. First NATO and then EU membership - these are major achievements for which this country, its people and its leaders should be rightfully proud. But both NATO and the EU are means, not ends. The transformation must continue; economic and judicial reforms must be consolidated and extended. Romania must be on the cutting edge of competitiveness if it is to catch up to the rest of Europe.

To do that, things still have to change. I come from the automotive business, and for me, expressways are a clear example of what needs to be done. After developing a trained and qualified workforce, which Romania has, there is nothing that encourages investment more than modern roads and rail. Expressways are, after all, the arteries of commerce, carrying goods to market and speeding communication beyond borders. Romania for too long has been existing on capillaries, slow moving and, generally speaking, in bad condition.

Yesterday, as I said, I saw first hand the works on the Transylvania Motorway, and I can tell you, this is exactly the sort of project Romania needs to develop. The Transylvania Motorway and other modern links to the rest of Europe will become avenues of prosperity, raising the standard of living in Cluj – and you don’t have any idea what that is until you see what happens when that road, even partially, opens, all around the Transylvania Highway. But they do not appear out of thin air, they have to be built. Without them, remote Romania risks a logistical cardiac arrest. Infrastructure is too important for Romania's future to be constantly delayed by ever-changing routes or petty political squabbles.

Another area in need is labor flexibility. While the rest of Europe is looking for ways to improve competitiveness, rigid labor laws artificially inflate the cost of labor and can price a country out of the market. Wage increases are a public good, but when they start to outpace increases in productivity, they pose a threat to long-term growth and investment. This is something that I know you all in Cluj are starting to feel acutely.

I would also suggest that Romania could do more to align its educational priorities with the demands of the market. Continued strong growth will require the right kind of workers with the right kind of skills. There's no shortage of talent in Romania. Matching the talent to the changing environment is the key.

I believe Romania has made important strides in combating corruption and inefficiency, but much work remains. Now is the time to consolidate success, and resist the easy temptation to slip back into old ways of doing business.

At the end of the day, I can offer my concerns and advice, but the voices that will matter most are Romanians, you. It is incumbent on you to demonstrate the path to prosperity. Business should not be shy to speak up for Romania's future. You have a lot at stake. I want you to know that I am an optimist when it comes to this country. Romania has the talent, the skill and the drive to wow Europe and the rest of the world, and I’m confident that you will demonstrate the will to get there.

Thank you.

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