INDUSTRIAL HISTORY OF ROMANIA

Romania’s economic history was shaped by the tensions between its extremely passionate striving toward self-sufficiency and the dominance of foreign powers. As in all countries of south-eastern Europe, it was not until the end of the 19th century that modest industrialisation took off, even though Romania possessed major deposits of raw materials (mainly petroleum but coal and iron ore as well). What the country lacked most was investment capital, as the fertile agricultural land was controlled by large landowners who lived – and spent the considerable proceeds from maize and wheat exports - abroad.

After Romania was recognised as an independent state in 1878, the government worked to encourage the growth of industry. Up until World War I, typical “entry-level” industries such as food production, textile manufacturing and wood- and metal working emerged, but the strongest growth occurred in the area of oil production. In the region of Ploieʂti, where the first well went into production in 1858, more drilling rigs were built, and new oil fields were opened up on the southern and eastern slopes of the Carpathian Mountains. Even then, politicians preached self-sufficiency through such nationalistic slogans as “we by ourselves”, but foreign capital and know-how remained essential. The first railway lines were also built with the aid of foreign investment. After the opening of the Danube bridge at Cernavodă in 1895, the Orient Express ran from Vienna via Bucharest to Constanţa on the Black Sea, from whence ships departed for Constantinople (today Istanbul). Branch lines extended from the capital to Transylvania and northward along the arc of the Carpathians to Galicia, both of which still belonged to Austria-Hungary. New canals facilitated shipping on the Danube.

The peace treaties following World War I granted Romania large territories, some of which were already industrially developed. Mines in Banat and Transylvania produced coal and ore, while Reʂita and Arad were centres of locomotive and railway carriage manufacturing. Still, there were nowhere near enough jobs for the countless numbers of the rural unemployed. The government broke up the large agricultural estates, but failed to revitalise agriculture in that it extended no credit to farmers, and even imposed export tariffs on grain to promote domestic industry. Textile production, petrochemicals and the machinery sector expanded, and an aircraft factory even opened in Braʂow in 1925, but foreign debt continued to increase. In the course of the 1930s, Romania became increasingly dependent on Nazi Germany.

The country made the decisive transition to an industrial nation following World War II. In line with Soviet directives, all private enterprises were nationalised by 1948. This was followed by the centrally planned development of a huge heavy industry sector: giant oil refineries and power stations, steel plants, chemical and machinery combines were created from the ground up. Rural unemployment faded to nothing and industrial production exploded. The infrastructure was expanded as well: the Danube bridge between Giurgiu and Russe in Bulgaria opened in 1954. However, the massive Black Sea-Danube canal project was halted midway, and not completed until 1984.

As in all socialist countries, this breath-taking pace of industrialisation was achieved at the expense of a stagnating agricultural sector and a drastically curtailed production of consumer goods. Additionally, this growth was extensive in nature, based on the increasing consumption of energy, raw materials and labour. Toward the end of the 1960s, the government attempted to correct its course, placing greater emphasis on more technically sophisticated industries and cooperation with western businesses: the Dacia automotive plant in Piteʂti has been manufacturing cars since 1968 under license from Renault; aircraft production was expanded in cooperation with Russian, and also British and French companies; and at the end of the 1970s, Romania was even exporting offshore drilling rigs. In the spirit of self-sufficiency, industries produced a wide range of petroleum derivatives, as well as pharmaceuticals, locomotives and electronic components, but structural problems such as high energy consumption and low return on investment remained unresolved until the collapse of the Soviet bloc. Romania was ultimately forced to import basic raw materials such as crude oil and iron ore at great expense to keep its oversized industrial operations running, and in the 1980s the former “breadbasket of eastern Europe” was no longer able to feed even its own people.

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