Britain is a trading nation. In most markets in the world – Asia, Africa, America, and the Middle East – the UK holds a disproportionately large share of inward investment and exports. But not, unfortunately, in central and eastern Europe.
For whatever reason UK companies still lag behind their German, French and Austrian competitors in markets in this part of Europe, despite the fact that these markets have been developing fast in the last two decades and can be expected to continue to grow strongly in the future.
During his visit to Bucharest last week Lord Green, the UK Minister for Trade and Industry, was determined to put that right. He heard from the wide range of British companies already represented in the market –such as Vodafone, GlaxoSmithKline, Provident Financial, Tibbett Logistics, and Melrose Energy.
He explored the outlook for the Romanian economy with Government Ministers and the Governor of the National Bank. He discussed the prospects and the barriers for business with the British-Romanian Chamber of Commerce and the Foreign Investors Council (FIC).
His conclusion was that British companies should look more closely at the opportunities in Romania – its strong macro-economic fundamentals, its large and still under-serviced domestic market, its highly qualified and competitively priced workforce, its advantageous geographic position with reach in the Balkans and Black Sea regions. And of course it is part of the EU Single Market and a short flight from the UK, making it an accessible market for small and medium sized companies as well as the larger ones.
At the meeting with the FIC and the Chamber of Commerce, Lord Green discussed the issue of corruption and the UK’s new Bribery Act which places severe penalties on any company engaging in corrupt practices abroad. Lord Green answered with a number of points.
Firstly, corruption is of course not unique to the Romanian market and Romania is making progress in tackling it. And while corruption can be an impediment for business it should not be a deterrent to looking seriously at doing business in Romania. As Lord Green learned at the Foreign Investors Council, it is perfectly possible to establish a successful business in Romania making profit on a sustainable basis and observing the highest ethical standards. And British companies are doing so today.
There were questions when the UK Bribery Act was proposed as to whether it would put British companies at a disadvantage compared to less scrupulous and less constrained competitors. Lord Green set out the advantages of the Act – both in showing leadership to improve the business climate in markets around the world, and in strengthening “Brand Britain” – the assurance that those dealing with British companies will get high quality and good value.
I thought one member of the Chamber put his finger on the problem when he observed that perceptions of Romania in the UK don’t correspond with reality. The challenge for me in promoting British business is to close that gap and make sure that British investors and companies have a proper appreciation of opportunities in Romania.
That’s my aim at the end of the month when I’ll go to London with colleagues from British Embassies in the region – Prague, Zagreb and Ljubljana to present “Emerging Europe” to the City of London and to British trade associations dealing with infrastructure and services. Watch this blog and I’ll tell you how I got on!