Romania in Transition: Opportunities for Canadian Business

Head Table Guests

Zoe Petee, Presidential Advisor; Reid Morden, President and CEO, Atomic Energy of Canada Limited; Gilles Duguay, Canadian Ambassador to Romania; Peter Munk, Chairman and CEO, TrizecHahn Corporation; His Excellency Andrei Gabriel Plescu, Minister of Foreign Affairs for Romania; Dr. Roseann Runte, President, Victoria University; Reverend Father loan Bunea, St. George Romanian Orthodox Church; Robert F. Nixon, Chairman of the Board, Atomic Energy of Canada Limited; George L. Cooke, President and CEO, The Dominion of Canada General Insurance Company and President, The Empire Club of Canada; His Excellency Gabriel Gafita, Romanian Ambassador to Canada; Charles Sirois, Chairman and CEO, Telesystem Limited and Chairman, Telesystem International Wireless Inc.; Ann Curran, Partner, Lewis Companies Inc. and Third Vice-President, The Empire Club of Canada; and Russell R. Merifield, Honorary Life Member, The Canadian Club of Toronto and Author, "Speaking of Canada: The Centennial History of the Canadian Clubs."

Introduction by Nalini Stewart

Introduction by Charles Sirois

Ladies and gentlemen:

It's a wonderful pleasure to take part in a real change for the better. Change for the better is definitely what is happening in Romania today.

Since the 1989 revolution, there has been a long period of adjustment to get rid of the old institutions and attitudes and build a better Romania. It has not been an easy time, but the adjustments are having their effect. All of the pieces are in place for real, long-term growth.

My story about Romania starts at the end of 1996. Our MobiFon cellular telephone joint venture had just been awarded a license to set up operations in Romania. At the same time, President Constantinescu came into office, in Romania's first democratic transfer of power.

President Constantinescu declared from the outset that he had a mandate from history: to create a dynamic market with stable democratic institutions. And that is exactly what he has done! He accelerated economic reform, and moved ahead firmly with radical changes; restructuring, decentralising, and privatising. The country was allowed to go through necessary but painful adjustments.

Romania is also taking international institutions very seriously, and using their standards to help it develop a world-class economy:

• It is a member of the World Trade Organization, an associate member of the European Union and of NATO.

• Last year Romania became a member of the Central European Free Trade Agreement, CEFTA. This is a market of some 95 million people--in Romania, the Czech Republic, Hungary, Poland, Slovakia and Slovenia.

All of these steps to integration are releasing the enormous potential of this country. What is that potential?

In terms of resources, Romania may be known for its energy and minerals, farmland, and forests. In geopolitical terms, Romania is an excellent base for operations in Eastern Europe, Russia and the former Soviet republics. In fact Romania's greatest wealth and brightest hope for the future rest in its population. There is almost no illiteracy. Technical and practical education is widespread. As a telecommunications operator, this is critical to TIW We look for people with technical skills and customer care orientation, who can take on increasing responsibilities. And we're finding them.

When my wife and I visited Romania, we decided to demonstrate our commitment to the country's future by starting a Foundation for Romanian Children. We followed the example of President Constantinescu. Through the work of his Children of Romania Foundation he has shown that this is a crucial priority for his country.

Our very high opinion of Romania is based on real, hands-on, experience--very successful experience! Telesystem International Wireless (TIW) is probably one of the largest foreign investors in Romania since the 1989 revolution. Our joint venture, MobiFon, has invested almost U.S. $400 million in Romania in the last two years. Our CONNEX GSM cellular telephone service was set up and began operations in record time, only 18 weeks after being awarded a license. We could not have done that without a supportive government. CONNEX has 1,000 employees, whose average age is 27. More than 95 per cent of them are Romanian. Under a successor programme, they are being trained to have greater and greater responsibility. Today, CONNEX GSM has 180,000 subscribers--well beyond even our most optimistic projections. We are the leader in Romanian cellular communications with our competitor, Mobil Rom, also enjoying good growth. We're allowing what competition within a sector can do.

Other things have also gone well for us in Romania. To help market the CONVEX GSM service to the general public, and gain a higher profile, we became the main sponsors of the Rapid Soccer Club. And our team won the Romania Cup!

Above all, we have enjoyed the benefits of Mr. Constantinescu's administration and policies. He has clearly grasped the importance of ensuring a stable environment for business.

CONVEX GSM has in turn showcased the benefits of the real market economy that he is so determined to achieve. CONVEX also shows the kind of future success that can be expected.

Romania's privatisation programme is in full swing. Many more opportunities are emerging--like the privatisation of Rom Telecom, which the Financial Times has called "one of the biggest privatisations in Central and Eastern Europe this year."

President Constantinescu will be presenting these opportunities and others in greater detail to investors across Canada over the coming days.

I would just like to simply add that Romania has been a great success for TIW We have seen this country dealing very seriously with its economic challenges. The time is right for a serious look at the new opportunities in Romania today.

Thank you.

His Excellency Emil Constantinescu made some remarks.

The appreciation of the meeting was expressed by George L. Cooke, President and CEO, The Dominion of Canada General Insurance Company and President, The Empire Club of Canada.