This is an archived USAID document retained on this web site as a matter of public record.
Administrator J. Brian Atwood
Romanian Forum for Economic Cooperation
Bucharest, Romania, October 27, 1997
U.S. Agency for International Development
I want to identify myself with the remarks of the EU representative. I met in Brussels with
Commissioner Van der Broek. We share the same hopes for Romania. Our success will be
the success of Romania in joining the single market.
Mr. Capatana, Counselor to the President, Minister of Reform Spineanu, Professor Boboc, Mr.
Cojocaru, representatives from the World Bank, the EU, and the U.S. Chamber of Commerce,
other distinguished guests and colleagues. Thank you, Mr. Cojocaru, for inviting me to offer
a few words. Your meeting today is an important step in expanding economic growth and
foreign investment in Romania.
Minister Spineanu, this forum is possible today because your government has made so much
progress in reforming your economy. You have stabilized Romania's currency, lowered your
inflation rate, and you have created market institutions that should inspire the confidence of
investors. You have just begun. Further privatization will inspire even more confidence.
One of the market institutions we have worked together to create is RASDAQ. We celebrated
last Friday the first year's anniversary of the opening of securities trading on the over-the-counter market. One year ago, I participated in the launching of RASDAQ in the U.S. Now
I am here to see the progress I have heard about and meet the people who accomplished this
feat.
RASDAQ is a technical accomplishment of enormous magnitude. RASDAQ and the other
securities and commodities markets in Romania's financial markets provide a mechanism for
generations of Romania's citizens to enjoy the benefits of a market economy. It creates an
environment that is fair and transparent.
Investment in Romania's diverse economy will create wealth and jobs through the discovery of new or expanded markets. Romania took a bold step when its leaders distributed the
economic wealth of 5000 State-controlled companies to more than 16 million Romanian
shareholders. RASDAQ and the Bucharest Stock Exchange are essential trading systems for
those shareholders. They provide opportunities for the general public to realize the real value of
the privatization shares they have received. USAID is proud to have participated in Romania's
capital markets development along with the European Commission and the World Bank.
On the eve of RASDAQ's first birthday, the market shows tremendous growth: I am sure the
story was told many times last Friday, the official anniversary day for RASDAQ. When the
RASDAQ market opened on October 25, 1996 six securities were listed representing only 56,000
of the 16 million Romanian shareholders. Two trades in two companies were executed, with 238
shares trading, valued at approximately $350. Today, more than 3,000 companies are listed and
traded on RASDAQ; more than 700 companies are actively traded. On an average trading day,
three to four million shares are traded in more than 3,000 transactions, valued at approximately
$2 million. These trades are executed by more than 150 broker/dealer firms -- many who are in
the audience today -- and are processed electronically. The overall figure is perhaps even more
impressive: since trading began in October 1996, the total volume of trading on the RASDAQ
has been the equivalent of $301 million.
As part of our effort to address securities and market regulation, USAID and the EC have
assisted the Romanian Securities Commission to establish the legal and regulatory framework for
the capital markets. This assistance has included drafting laws and regulations governing the
market. Commissioners and the Commission staff have been trained to survey the market and
enforce its regulation. Moreover, USAID recently began a program to educate the corporate
issuers who were created through privatization in Romania about the benefits of capital markets
and their obligations to the marketplace.
It is indeed incredible that Romania has established one of the largest securities markets in the
world in just over one year. Yet, no claim can be made that the capital market development
initiative has been fully successful nor that the trading institutions are yet viable from a commercial standpoint. This cannot happen until the RASDAQ, the Bucharest Stock Exchange
and the other securities and commodities markets in Romania fully become a conduit of
investment capital for economic take-off.
The story of RASDAQ and the Bucharest Stock Exchange, needs to be better told. The
Romanian public, company managers and foreign investors should be more aware of what has
been accomplished. The capital market can become a more competitive market. Securities laws,
regulations and procedures that are transparent, fair to investors, and enforceable are still to be
enacted. We want to help.
We will continue to provide training and other forms of technical assistance--the young men and
women who plan and operate an entirely new industry, the securities markets, have amply
demonstrated their commitment, demonstrating that the investment in Romania's capital market
was money and effort well spent.
We hope the new Romanian government will continue to pursue reform and deal with the
difficult, but significant issues -- issues such as privatization of its residual interests in state-
owned companies and banks. It should accelerate the efforts to privatize its economy. It will
surely need to continue to maintain a macroeconomic policy that promotes economic growth and
opportunity, led by lower inflation, fiscal restraint and a stable currency. Continuing to
encourage foreign investors with uncomplicated and transparent procedures is vital.
We, at USAID, are committed to assisting in the creation of the conditions by which the financial
sector can compete effectively in global markets. The development of any securities market and
its supporting institutions and systems will never be complete because the market must
continually evolve to remain competitive. In the end, the development of the securities markets
remains essentially a question of the commitment of the Romanian people and their government
to economic transition and a better life.
My bet will be on Romania. This country has always been part of the West. It is now a part of the West. It has only to create the institutions that will make its re-integration complete. And
that is being done.
This is an archived USAID document retained on this web site as a matter of public record.
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Last Updated on: July 18, 2001
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