Integration into the Organization for Economic Co-operation and Development (OECD) provides Romania with a reference framework for structural measures that can bring an additional growth of around 0.8% - 1% of GDP, believes Leonardo Badea, First Deputy Governor of the National Bank of Romania.
„OECD membership provides Romania with a robust reference framework for structural measures that can potentially add about 0.8% - 1% of GDP growth potential, but this depends on the institutional capacity to internalize these standards and to maintain a predictable macroeconomic environment capable of transforming investor confidence into productive capital in the long run”, explained Badea in an analysis quoted by Agerpres.
He underlined that Romania's accession to the OECD, expected this year, should not be interpreted only as a diplomatic success, but as an institutional anchor that can optimize the production function of the national economy.
„For economic decision-makers, this process is a mechanism of structural convergence, operating through clearly defined transmission channels, but whose effectiveness depends on avoiding ´institutionalism in the guise of a façade,”added the NBR official.
According to him, in terms of macro-financial dynamics and risk premium reduction, the main vector of impact is the compression of the risk premium.
„Membership acts as a robust credibility signal, reducing spreads on Eurobond issuance and optimizing public debt service. The improvement of the country rating is directly correlated with the alignment with liberalized capital movements codes and corporate governance instruments, which reduce the volatility of portfolio flows and facilitate the transition from investments based on labor cost arbitrage to technology-intensive capital flows, boosting total factor productivity (TFP)”said Leonardo Badea.
Secondly, he stressed, it is about reshaping FDI (foreign direct investment) flows, with OECD membership removing barriers for large institutional investors, who direct capital to markets that meet rigorous transparency standards.
Also, beyond the volume of capital, there is a qualitative shift in investment towards high value-added sectors, boosting labor productivity.
„In countries such as Poland or the Czech Republic, alignment with OECD standards has acted as a catalyst for integration into complex global value chains, essential to avoid the „middle-income trap”. By adopting good practices in public procurement and governance, the aim is to eliminate market distortions and optimize resource allocation. For a better understanding, it is necessary to emphasize that these benefits are not automatically derived from the act of accession, but are endogenous to the quality of the public policies promoted. The positive dynamic is conditional on maintaining the sustainability of public finances in order to capitalize on low interest rates. There is a risk of „window dressing reforms”, where legislative changes are not followed by a change in the functioning of the administration, while the actual implementation of corporate governance standards in state-owned companies and the digitalization of the administration are efforts that need to continue after the festive moment of the welcome into the organization”Badea added.
He also emphasized that joining the OECD is not just a process that ends with acceptance, but it is a process that will manifest itself just as intensely through the changes it will induce and that accession does not just change laws, but will change institutional mindsets.