40 YEARS Part I
by Mircea Raceanu

June 1, 2004 will mark the 40 year anniversary of the raising of diplomatic relations between the United States of America and Romania to embassy level. The event marked the closing of the cold war stage in the US-Romanian relations and the start toward more normal and friendly relations. As it is well known by the end of the 1940s and during the 1950s the US-Romanian relations were almost frozen, being dominated by the confrontation between the two existing opposing political and military systems. The period was marked by Washington’s “policy of containment” towards all the communist countries, and by Bucharest’s open hostility toward the US. It was only in the late 1950s and early 1960s that some signs of an incipient bi-lateral dialogue appeared, signs that made the historical event of June 1 possible.

Several developments contributed to the establishment of a favorable climate that led to improved diplomatic relations.

At the bilateral level in the early 1960s the signing of a Financial Agreement and Program for Cultural, Scientific and Education Exchanges, a first such program concluded by the US Government with a Socialist country. In August 1963, Orville Freeman’s visit to Romania; the then Secretary of Agriculture was the first member of US Cabinet to visit Bucharest after WWII. In early 1964, the Romanian Government’s decision to pass a favorable resolution on some 400 consular cases submitted by the US Legation in Bucharest.

At a national and international level the US government perceived favorably some of the Romanian government’s actions that seemed to indicate Bucharest’s intention to improve relations with the West, including the US, and promote an independent foreign policy within the Soviet Block. Such actions were:

• Releasing political prisoners under a general amnesty and reducing the Soviet cultural and political influence.
• Romania’s position during Cuban Crisis of October 1962, that could have triggered a military-nuclear conflict between NATO and Warsaw Pact. To be more specific, during the October 1963 meeting of the US Secretary of State Dean Rusk with Romania’s Foreign Mister Corneliu Manescu, the latter offered Romania’s neutrality in exchange for the US commitment that in the event of such a conflict the Romanian territory will not be hit by nuclear missiles. In fact, this meant that Romania would not keep its obligation under the Warsaw Pact.
• Adopting a strong position to resist Soviet moves to establish supra-national agencies and more binding economic specialization within CEMA As a result of Romania’s position, the bulk of Moscow’s program aimed at strengthening Soviet political and economic control over Eastern Europe was stymied.
• Pursuing a policy on the Sino-Soviet split that was increasingly in defiance of Moscow’s wishes while at the same time deftly using the dispute between the two communist powers to advance Romania’s own interests. The Declaration of April 1964 signaled clearly Romania’s intent to follow its own path and reject Moscow as the one and only way.
  to be continued in the next issue
  
  Mircea Raceanu is a former Romanian Diplomat and author of “INFERN*89”. Mr Raceanu co-authored with Roger Kirk, US ambassador to Romania “Romania versus the United States: Diplomacy of the Absurd, 1985-1989”. At that time he was in charge of US section in the Romanian Foreign Ministry.

From the President (Continued)
by Stefan Plesea

The US-Romanian relations are at a very positive juncture in time, especially at a political level. While the bilateral economic and commercial exchanges have improved there is room for increased trade and for better business relations. Romania is still an untapped resource of opportunities for many US companies from a myriad of perspectives. Romania has to do a much better job at improving its legislative framework, at providing better transparency, at reducing and eliminating bureaucracy.

The Romanian American Forum (RAF) will work with all the interested parties towards achieving these goals.

This year we will commemorate 40 years from the elevation of the American-Romanian diplomatic relations to Embassy levels, on June 1st, 1964 and next year will mark 125 years since USA and Romania established diplomatic relations.

We hope that you will join us on the journey ahead as we discover business opportunities for partners on both sides of the Atlantic Ocean. RAF will work with and assist all of you in any endeavor that you might undertake.

Thank you!
Stefan Plesea

Romania’s Energy Sector (Part 1 of 3)

Within Central and Eastern Europe Romania is the second largest energy consumer after Poland, due to the fact that its industry is very energy intensive as a result of the overdevelopment registered before 1990. Romania’s energy use or intensity—measured as the amount of energy used to obtain $1,000 of GDP or PNB—is one of the highest in the region, ten times higher than the US, France or Germany. On average the utilization efficiency is four times lower than the OECD countries while the energy consumption as reported to the GDP is is more than three times higher than that of the European Community.

The largest consumption of energy in Romania is the industry, approximately 40%, with the metallurgical and chemical industries being by far the industry that largest energy consumers (the chemical industry using almost 10 times the national average). It is worth noting that over 50% of the industrial output is still produced in state controlled entities. This is important because the decision to upgrade the equipment and facilities is likely to be both a political and a business decision. Further more, power production in the country and the distribution system at local and regional level are inefficient due to old machinery and equipment, lack of maintenance and increasing demand. In some cases the lack of proper equipment in distribution networks neutralizes the progress made on the production side of the business sector.

Presently the following sectors offer attractive business opportunities in Romania:

• Power plant equipment (boilers, motors, turbines, filters)
• Environmental products
• Industrial equipment, variable speed drives, engines
• Software and project management