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CHAPTER
7: THE ECONOMIC ENVIRONMENT
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SWOT
economic
environment
|
Positive factors |
Negative factors |
| Internal
factors |
Strong
points:
· Architectural patrimony
· Network of public institutions
· Adequate city telecommunication network
· Developed infrastructure (water, sewerage, energy, gas)
· Balanced distribution of economic units
· Development of lohn type services (clothes manufacturing)
· Developed commercial network
· Strong construction sector
· Increase of export indicators
· Disadvantaged area (fiscal facilities)
· Network of economic development institutions - CCIMM,
CDIMM, Business Incubator, CLIMM
· Advanced privatisation, active private initiative
· Developed network of financial-banking institutions
· Airport
|
Weak points:
· State of architectural patrimony; it is not economically
capitalised
· Inadequate communication among public institutions
· Poor condition of the bus fleet of the city
· Advanced degradation of city infrastructure (water, sewerage,
gas)
· Economic decline of traditional heavy industry (mining,
metallurgy, chemical industry)
· Low level of economic activities in agriculture
· Inadequate services for the population
· Low investments in the fields with high added value:
production, high technologies
· Poor local budget
· No undergraduate/graduate education in modern fields
(applied computer science, media, architecture, town planning,
civil and industrial construction), that might in time attract
investors
|
| External factors |
Opportunities:
· Public-private partnership
· Baia Mare - disadvantaged area - facilities
· Use of public debt instruments (municipal loans and bonds)
as sources of local budgets
· Possibility of accessing local budget sources (projects,
governmental sources, private sources, special taxes)
· Landscaping Master Plan - instrument of urban development
· Urban rehabilitation plans, business centres, technological
parks and areas, portfolio of projects
· Foreign investors in the region
· Geostrategic location in relation to Ukraine -Hungary
- Poland
|
Risks/Dangers:
· Weak lohn system
· Continuous economic decline of major industrial activities
(mining, metallurgy)
· Lack of budgetary resources
· Discrepancy between activities/projects suggested for
financing and the actual budgetary resources
· Drastic cuts in financing major investment objectives
· High inflation
· Insignificant economic growth
· Regional competition for financing sources
· Heavy taxation, allowing for tax exempt economic activity
· Rapidly changing economic legislation
· Constant decline of research/design economic activities
· No modern roads in the regional plans (highways, rapid
roads) for Baia Mare area and Maramures county.
|
7.1.
The analysis of the economic situation by activities, structure and
organisational type
Number and structure of market operators in Baia Mare
TABEL No. 1: Number and structure market operators in Baia Mare:
| Market
operator |
Total
|
PF
|
SNC |
SCS |
AF |
RA
|
SRL
|
OC |
SA |
| Agriculture
- sections A, B, C |
293 |
23 |
3 |
0 |
103 |
0 |
144 |
0 |
20 |
| Industry
- sections D, E, F |
1479 |
172 |
2 |
0 |
456 |
1 |
802 |
0 |
46 |
| Construction
- section G |
891 |
288 |
1 |
0 |
291 |
0 |
300 |
0 |
11 |
| Trade
- section H |
4037 |
451 |
13 |
1 |
2161 |
0 |
1387 |
5 |
19 |
| Services
- sections J, K, L, M, N, O, P, R, S, T except for group 633 |
2050 |
720 |
4 |
0 |
607 |
0 |
678 |
4 |
37 |
| Tourism
- section I plus 633 group |
288 |
7 |
1 |
0 |
164 |
0 |
115 |
0 |
1 |
| Total
|
9038 |
1661 |
24 |
1 |
3782 |
1 |
3426 |
9 |
134 |
Legend:
A - Agriculture; B - Sylviculture, forestry and hunting;
C - Fishing and fisheries; D -Mining and quarrying; E - Manufacturing;
F - Heating and electrical energy, gas, water;
G - Construction; H - Retail and wholesale, repair and maintenance of
motor-vehicles, motorcycles, and of individual and household appliances;
I - Hotels and restaurants;
J - Transport and depositing; K -Post and telecommunications; L - Finances,
banking and insurance; M - Real estate transactions, renting fees and
services provided especially to companies; N - Public administration;
O - Education; P - Health and social assistance; R - Other collective,
social and personal services; S - Activities of staff employed in households;
T - Activities of extraterritorial organisations and institutions; Group
633 - Activities of tourism agencies.
Group 633 - Activitati ale agentiilor de turism
As
shown in the table above, at the end of 2000 there were 9,038 market
operators, out of which 939 companies with foreign capoital, the invested
capital amounting to 20,023.4 US dollars.
As compared to other market operators, the commercial sector is best
represented (retail and wholesale, repair and of motor-vehicles, motorcycles,
and of individual and household appliances) - 44.6%.
Then follow the services (22.8%), the industrial sector (16.4%), construction
(9.8%), agriculture and tourism (about 3.2% each).
Most market operators are family associations (41.8%), and limited liability
companies (37.9%), mainly trade and services. There are many natural
persons functioning as self-employed (1,661, i.e. 18.4% of the total
figure), in trade, services as well as industry and constructions.
Most stock companies, which represent 1.48% of the total figure, function
in industry, replacing the autonomous bodies, extremely few (only 0.015%).
This proves the fact that privatisation in quite advanced in Baia Mare
and part of the autonomous bodies were turned into commercial enterprises
or other types of companies.
7.2.
The dynamics of Baia Mare Economy between 1996-2000 turnover (thousand
lei)
| FIELD |
1996 |
1997
|
1998
|
1999 |
2000
|
2000/1999 |
| Agriculture |
118369266
|
160356088
|
97151823
|
101857341
|
165033011
|
1,620
|
| Industry |
982630060
|
2501915826
|
2795839141
|
4039435927
|
5773038525
|
1,429
|
| Construction |
133428320
|
292017504
|
456340899
|
525352829
|
753418658
|
1,434
|
| Trade |
900840949
|
1947564784
|
2470387791
|
3045111123
|
4670645497
|
1,533
|
| Services |
85474247
|
152114456
|
148849276
|
224523253
|
950739020
|
4,234
|
| Tourism
|
10001239
|
14923527
|
21479695
|
47597500
|
63177954
|
1,327
|
The table shows
that the turnover for the economic units in industry and construction
has constantly increased over the past five years, with a rather constant
growth in the last three years.
Situation by type
of activity:
Industry: Of the overall turnover at the end of 2000, here are the figures
by industrial activity: food and beverages (24.3%), metallurgy (16.5%),
wood processing (15.9%), metaliferrous ore extraction and preparation
(9.7%), ready made clothes industry (5.3%), furniture and other industrial
activities (4.8%), textiles and textile products (4.4%), metal engineering
and metal products (4.0%)
Agriculture:
The turnover in agriculture increased slightly in 1997 but fell
severely in 1998, and then started to slightly go up again towards the
end of 2000.
Trade: The turnover in the commercial sector constantly increased, though
at various rates from year to year.
At the end of 2000 the overall turnover of local trade companies was
467,645,497 thousand, 1.5% more than in 1999. The growth is mainly due
to the price increase in general, especially price increase of oil products
(fuels and lubricants), the turnover of the trade companies being 7.4%
more in 2000 than in 1999.
At the same time, the turnover resulting from food product sales decreased
by 6.1% as compared to the previous period, which proves a decline in
consumers' expenditure.
Construction: The turnover in this sector increased considerably
over the analysed period (4.670.644.597 thousand lei at the end of 2000),
but this in mainly due to the price increase for building materials
and for transports. The biggest percentage (81.7%) comes from construction
of new buildings and major overhaul, 18.3% representing maintenance
and reparation works for buildings.
Services: Services fluctuated over the years. At the end of 2000,
the overall turnover was 950,739,020 thousand lei, 4.23% more than the
previous year.
Tourism: Tourism had an upward trend between 1996-2000; the turnover
growth is due to the increased number of companies in this field.
The tourists accommodation capacity ensured accommodation for 666,362
tourists in 2000 (60% in hotels, 18.3% in camps, 11.3% in tourist chalets,
10.4% in motels and tourist boarding houses). This sector has a growing
potential, inadequately capitalised.
The geographical potential of the region, especially in the area Dam-Firiza-Izvoare-Gutin,
Mogosa, is not capitalised.
7.3.
Employment structure by economic activities: 1996-2000 employees (number
of persons)
| Field |
1996 |
1997
|
1998
|
1999 |
2000
|
2000/1999 |
| Agriculture |
3202
|
1633
|
777
|
802
|
600
|
0,748
|
| Industry |
56171
|
53142
|
44328
|
40001
|
37018
|
0,925
|
| Construction |
6203
|
5732
|
6399
|
4266
|
3800
|
0,890
|
| Trade |
8101
|
8779
|
9005
|
8312
|
8967
|
1,078
|
| Services |
4741
|
2757
|
2813
|
2114
|
2714
|
1,283
|
| Tourism
|
421
|
428
|
194
|
316
|
361
|
1,142
|
In respect of 1999
and the previous periods, in 2000 the structure of employment had a
different evolution, both in terms of absolute terms and activities;
the unemployment rate also increased
In 2000 the employment rate was 39.1% (as compared to 44.2% in 1999),
the decline being more significant as to female employees. By activity,
at the end of 2000, most people were employed in industry, despite the
fact that this indicator constantly fell between 1996 and 2000. This
points to a drastically reduced activity in industry and increased cutbacks
in the local traditional industries, mining, metallurgy, machinery and
equipment.
In respect to 1999, the employment rate decreased in agriculture, industry
and construction, whereas it increased in trade, services and tourism.
7.4.
Structure / evolution of the main economic indicators 1996-2000 - export
(thousand lei)
| FIELD |
1996 |
1997
|
1998
|
1999 |
2000
|
2000/1999 |
| Agriculture |
17778620
|
6063911
|
13370279
|
1055074
|
3249631
|
3,080
|
| Industry |
149037355
|
456603671
|
547605384
|
1338087169
|
3737024952
|
2,792
|
| Construction |
40636
|
0
|
1600493
|
5208556
|
22773068
|
4,372
|
| Trade |
6280716
|
16863976
|
21190678
|
60990472
|
86554210
|
1,419
|
| Services |
7656326
|
35073995
|
27861746
|
44644093
|
581841219
|
13,032
|
The exports of
goods, as total volume, absolute terms and growth index on fixed basis,
increased not only by activity, but also by economic field as compared
with the same period of the year 1999. Industrial products (especially
the light industry products) hold the largest percentage in the overall
exports. In respect of 1999 exports, in 2000, services increased by
13% and the construction activity by over 4%.
The percentage of exports in the overall turnover figure for trade is
significant: 32.4% growth at the end of 2000 in respect of the same
period of the previous year (40.4% - exports of textiles and ready made
clothes, 17.2% - furniture, various products - 15.2%). At the same time,
imports also increased by 26.3% in respect of 1999, most imports being
of raw materials for the textile industry.
The structure of exports at the end of 2000: 34% textiles and ready
made clothes, 21% furniture, 6% equipment and industrial products. Most
exports went to Germany, 37.9%, Sweden 10.8%, Egypt 8.0%, the Netherlands
7.3%, Belgium 7.2%, France 6.7%, U.K. 5.5%.
NET
PROFIT (thousand lei)
| FIELD |
1996 |
1997
|
1998
|
1999 |
2000
|
2000/1999 |
| Agriculture |
5120260
|
3283708
|
4948922
|
1989559
|
3467734
|
1,742
|
| Industry |
60498960
|
145912484
|
173552284
|
265223763
|
366345467
|
1,381
|
| Construction |
15359128
|
36214867
|
40957762
|
29377157
|
42645180
|
1,451
|
| Trade |
40104828
|
58716941
|
41829706
|
39476542
|
97427897
|
2,467
|
| Services |
8706331
|
24927411
|
9917048
|
24282227
|
118396503
|
4,875
|
| Tourism
|
296167
|
168365
|
1305154
|
336437
|
2328056
|
6,919
|
The net profit increased
sensationally; also, the growth was extremely different from one year
to another as well as by activity. Thus, in respect of the same period
of 1999, in December 2000, there was a growth in both absolute and relative
terms both by activity and by structure. Nevertheless, this growth is
mainly due to the increase of the rate of inflation as well as of the
consumer price index. The net profit has however increased in the sectors
with high added value, tourism (with over 6% growth in respect of the
same period of 1999), services and trade.
SELF-FINANCING
RATE (capital resources / total assets)
| FIELD |
1996 |
1997
|
1998
|
1999 |
2000
|
2000/1999 |
| Agriculture |
0,5435
|
0,4437
|
0,7527
|
0,7737
|
0,6012
|
0,7771
|
| Industry |
0,6253
|
0,5282
|
0,3778
|
0,3052
|
0,2701
|
0,8850
|
| Construction |
0,8432
|
0,4388
|
0,3289
|
0,2447
|
0,2216
|
0,9054
|
| Trade |
0,3121
|
0,2098
|
0,1855
|
0,1071
|
0,1177
|
1,0991
|
| Services |
0,5016
|
0,2975
|
0,3865
|
0,2618
|
0,3827
|
1,4617
|
The self-financing
rate of investments constantly fell from year to year, even drastically
for some fields of activity. At the end of 2000, in respect of the same
period of 1999, a decline in absolute terms both in terms of activities
and structure was noted. This decline points to a low self-financing
capacity of the activities of companies, generated by the inflation
index, the price growing index, the financial blockage, together with
the overwhelming fiscality and the restricted access to credit.
PROFITABILITATEA
ECONOMICA (gross profit / long-term capital)
| FIELD |
1996 |
1997
|
1998
|
1999 |
2000
|
2000/1999 |
| Agriculture |
0,0607
|
0,0468
|
0,0608
|
0,0214
|
0,0334
|
1,5628
|
| Industry |
0,0571
|
0,1111
|
0,1372
|
0,1892
|
0,2151
|
1,1370
|
| Construction |
0,0577
|
0,5282
|
0,4163
|
0,3503
|
0,4667
|
1,3321
|
| Trade |
0,4623
|
0,7314
|
0,4746
|
0,5076
|
0,5936
|
1,1695
|
| Services |
0,2330
|
1,0016
|
0,3475
|
0,6639
|
0,8782
|
1,3227
|
The return of assets
slowly increased in respect of the previous period, 2000/ 1999, mainly
due to the price growth index. Nevertheless, a real growth can only
be given when adjusting the value of the gross profit with the economic
indicators. At the end of 2000, the return value of the assets was different
from one economic field to another (very low in agriculture and industry
and higher in construction, trade and services).
7.5.
Business Environment
"Local
Community Development through Initiative and Communication"
By
supporting the development of SMEs as basis of local economic development,
and in conformity with the ideas of the "Local Community Development
through Initiative and Communication" at city level, the Baia Mare
City hall envisages the accomplishment of the following objectives,
comprised in the medium term development strategy:
- establish
the development priorities;
- create
a sustainable development vision by means of a participatory process
involving all the sectors of the local community;
- analyse
and evaluate the alternative strategic options
- elaborate
a strategic plan and a plan of measures based on efficient use of
local resources and attracting external ones;
- efficient
management of community patrimony property;
- public-private
partnership;
- integrate
a modern and efficient management of quality.
The
constant concern of the local administration for increasing local attractiveness
and invigorating the business environment as well as attracting foreign
investors, with benefic effects on the life standard quality of the
local community has become visible by means of successful initiatives
such as:
- Creation
of the "Centrul Vechi" Foundation (partner organization
in the project "The Business Centre - Millennium III"),
having as founding institutions, organizations and personalities willing
to contribute to the regeneration of the area.
- Organisation
of a Contest of projects (ideas) of social-economic and cultural restructuring
and regeneration of the old city centre.
- Regional
Town Planning "Baia Mare Historical Centre" finalized at
the end of 2000 as well as significant resources allocated from the
local budget for the regeneration of the Old City Centre, proving
the determination of the present administration to urgently deal with
this big social-economic problem of the region: the lack of an adequate
business infrastructure, capable to generate sustainable development.
- Lanscaping
Master Plan (PUG)
An
important aspect in the elaboration/implementation/control of the public
decision-making at the level of the Baia Mare city hall is public opinion.
Thus, a poll performed on a sample of 400 inhabitants of the city, upon
the elaboration of the PUG for 2000, proves community support for the
development project of the business infrastructure. Although the Old
City Centre, as urban residential area was preferred only by 4% of the
people polled (confirming the poor and antiquated technical and public
utility condition and the lack of interest for living in that area),
71% of the same polled citizens admitted the historical and patrimonial
importance of this area, considering that one of the short-term priorities
of administration is the social-economic regeneration of the Old City
Centre:
- Initiate programs at the level of the Aministrative Commission by
the specialized public services, allowing the increased public access
to post and telecommunication services, especially to modern Internet
ones (e-mail, www) as main communication means for the coming years;
- Improve the overall business environment by means of a Plan of Actions/projects/objectives
for economic and modern business infrastructure development (e-business,
e-commerce).
The fundamental concept of the Millennium III project starts from the
capitalization of the traditional potential of Baia Mare - the Old City
Centre Heritage.
This innovation in the urban management of the Baia Mare city may bring
significant benefits to those involved in:
-
traditional arts and handicrafts;
-
companies - IT-multimedia-communications-specialists, generating together
with other key factors in the local development (administration, educational
system, business environment, NGOs) a modern and prosperous city -
CityNET_Millennium III .
By
means of the Millennium III Business Centre, the city will combine traditional
and modern commercial elements (virtual shops, virtual business schools,
e-commerce centres), which, in time, through investments achieved with
CityNET mechanisms will lead to the complete regeneration of the Old
City Centre.
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