Romania’s Development Policy: Policy Challenges and Unexplored Potential

By Stefan Cibian / Part of the European Development Policy Outlook Series

In the early 1970s, Romania offered partner countries over 300 million USD per year in technical assistance. In 2022, Romania disbursed only 80,87 million USD in bilateral aid, while the overall budget of RoAID, the Romanian Development Agency, managing a part of Romania’s bilateral aid,  was less than 13 million EUR. Such a difference reflects a limited political prioritization of development assistance and partner countries in Romania’s foreign and development policies after 1989.

Romania had intense political, economic, and technical assistance relationships with African, Middle Eastern, and Asian countries during its communist-totalitarian regime. However, because the communist economy collapsed in early 1990s, the country’s relations with partner countries contracted and only re-emerged once Romania joined the European Union (EU) in 2007, starting to offer development assistance. In 2007, Romania moved from receiving aid to becoming a donor of official development assistance (ODA), committing to reach 0.33 % of gross national income (GNI) in ODA by 2030.

Since 2007, Romania has been re-building its capacity to engage with partner countries. The Ministry of Foreign Affairs is responsible for Romania’s development policy, indicating that aid is seen primarily as a foreign policy and trade instrument. RoAID, Romania’s aid agency, was established in 2016. Before the establishment of RoAID, UNDP Romania had acted as an implementation agency for the Romanian ODA. The development-related legal framework has evolved over the last decade, and Romania has adopted a strategic framework for development assistance. This strategic document, renewed in 2023, outlines priority countries and areas for ODA. Romania focuses on Moldova, Ukraine, Georgia, Serbia, Albania, Palestine, Mauritania, Tanzania, Senegal, and Ethiopia as priority countries. Romania’s international development strategic areas are aligned with the Sustainable Development Goals and include partner states’ institutional capacity development, green transition, and human development.

It is important to note that Romania has made significant steps ahead to increase its institutional capacity to engage with partner countries and be an active part of the donor community, notwithstanding its limited budget compared to the 1970s. Romania has become increasingly active in EU’s policies concerning development and relations with partner countries, especially during its Presidency of the Council of the European Union in 2019. Despite this progress, significant challenges remain.

Romania’s development policy challenges and potential

As a newer donor of ODA, Romania faces multiple challenges. Some of these challenges include a reduced confidence to assert itself as a donor, weak political engagement with further away partner countries, excessive bureaucracy limiting innovation and efficiency, and a limited expression of a donor identity that reflects Romania’s history and comparative advantage.

Like most other Central and Eastern European (CEE) countries, Romania moved from being an aid recipient country to becoming a donor of ODA. On the one hand, having been an aid recipient, Romania is aware of the inherent inequality of the aid system and, therefore, reluctant to replicate it. On the other hand, Romania aspires to become a member of the DAC, having to respect DAC requirements that structurally impose unequally. This discrepancy, alongside limited economic and political engagement with partner countries in Africa, Asia, and Latin America, hinders Romania’s confidence as a donor.

Until recently, Romania’s foreign policy priorities were focused exclusively on joining the European Union and NATO. Such focus led to limited attention and often, no attention being paid to other parts of the world. This seems to be changing as Romanian President Klaus Iohannis visited four African countries: Kenya, Tanzania, Senegal, and Cape Verde in November 2023. That was the first visit of a Romanian president to Africa in thirty years. The President was not accompanied by business delegations, which shows Romania’s difficulty in rebuilding its foreign trade policy and engagements after the end of the Communist regime. However, Romania launched its Africa Strategy in December 2023, indicating that we may see more attention paid to the continent.

Romania’s communist legacy is the most significant challenge for the country’s development and foreign policies towards partner countries. That challenge manifests itself in multiple ways. First, communist Romania connected to developing countries on an agenda against colonialism and capitalism. Yet, in the last thirty years of transition, Romania joined NATO and the EU and proved that capitalism generates growth, having become a high-income country due also to its capitalist market economy. Second, given the lack of political commitment and leadership on development and foreign policy toward partner countries, it is hard to parallel Ceausescu’s substantive policies in the country’s neighborhood and Africa. Furthermore, although Romania’s experience with the horrors of totalitarianism gives it credibility and positions it well to stand up for democracy in a world where democracy is under attack, current policies are not articulating such a voice and building partnerships with countries with a similar past.

Romania has experienced one of the harshest communist-totalitarian regimes in the world, leaving behind multiple societal traumas and also a successful transition to democracy and market economy. Both processes are little or not at all explored in the country’s donor identity. Given that today we see increasing calls for decolonizing aid and building genuine development partnerships, Romania, a country with no colonial past, could enable us to move beyond simple rhetoric on decolonizing aid, if only it had the confidence to innovate.

This applies even more when considering that more equal partnerships cannot be built when aid is almost exclusively focused on financial resources. From a financial perspective some countries have indeed more, while others have less, which is exactly the source of continued inequality also in development. To have a chance for building more equal partnerships, development policies should take a broader view to development and emphasize all types of resources (relational, emotional, community energy, social, material, and capital). Doing so opens the way for all communities to bring resources to the table and feel empowered and equal in that they contribute to addressing their development challenges. An additional approach could centre around vulnerabilities. Romania continues to face significant challenges in its local communities. Development processes could focus on bringing together communities and governments facing similar challenges, facilitating improvement in the respective communities and/ or on specific policy areas.

For Romania to innovate in a rigid development system, it needs to remain open to learning from the past and partner countries. It should broker multi-sector partnerships, nurture genuine leadership among individuals, institutions, and organizations, and focus on enhancing its relations with partner countries. Learning together can build more equal partnerships.

Stefan Cibian is Executive Director and Research Fellow at the Center for Global Affairs and Postdevelopment, Făgăraș Research Institute.

Image by Albrecht Fietz on Pixabay

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