Romania Risk Assessment - Report Example

Romania Risk Assessment Name Institution Name Date Table of Contents 1.0 Introduction 3 2.0 Identification of National Risks 4 2.1 Human Trafficking/Human Rights 4 2.2 Bribery and Corruption 5 2.3 Environmental Degradation 6 2.4 Agricultural Sustainability 6 2.5 Organized crime 7 2.6 Terrorism 7 2.7 Infrastructural Developments 8 2.8 Political Risks/Instability 8 2.9 Health Incidents (Humans) 9 2.10 Earthquakes 9 3.0 Risk Analysis 9 4.0 National Risk Assessment Matrix 11 5.0 Fault Tree 16 6.0 Allocation of Monetary/Budget 17 7.0 Conclusion 20 8.0 References 21 1.0 Introduction Romania is a country that is located in Southern Eastern Central Europe and borders numerous countries. The countries include Ukraine, Bulgaria, Serbia, Hungary, Moldova, and borders Black Sea. The country is also a member of European Union, and the capital city is Bucharest. The population of Romania is approximately 20 million according to the 2011 census, and the majorities are Romanians. Others are Germans, Ukrainians, Roma, and Hungarians. The government system is Unitary Semi-presidential republic. The estimated GDP for 2015 is $215.302 billion while per capita is $10,859. Furthermore, the business languages include German, French and English. Nevertheless, the strategic location and the numerous persons within the region may result in some challenges in ensuring the country operates effectively. The type of economy is the upper middle-income economy, and the government has introduced numerous programs to private-public organizations (SME Toolkit, 2015). The aim of these strategies is to employ the European economic model. The country has continuously promoted privation especially due to its agricultural land, highly qualified workforce, well-educated population but remains among the poorest countries in the European Union. The agriculture industry contributes highly to the GDP, and numerous industries have continued to be attracted to the region including logging. The changing operations and economic approaches have resulted in newer industries such as petroleum refining, manufacturing of vehicle parts, textile, heavy industry, building, and construction. The Romania government understands its role, benefits from EU and adheres to the regulations championed through EU (SME Toolkit, 2015). In addition, Romania has its integral factor in improving the lives of people in the country and introducing measures to ensure the people and sectors operate effectively. Therefore, it is important to have a risk register and risk analysis to determine the threats to the country. The level and likelihood of incidents occurring is also important to be noted to ensure appropriate mitigation strategies are introduced. Furthermore, the GDP of the country is growing, and it is important to allocate some of the funds in addressing the threats to the country. 2.0 Identification of National Risks National risks are inherent and may be attributed to numerous factors. Ranging from natural factors to advancement in technology, the following are some of the national risks: 2.1 Human Trafficking/Human Rights Romania understands the importance of human rights, and it is one of its integral official foreign policy priorities. Romania has ratified numerous universal and European human rights, but challenges still exist when it comes to factors associated with human rights. Some human rights challenges include discrimination against minorities; forced labor and human trafficking remain major issues. The country is the destination, transit and source country for children, women and men trafficked for purposes of forced labor in the service, construction and agriculture sectors and of commercial sexual exploitation. The Romania government has continued to address the problem through implementation of National Anti-Trafficking Strategy 2012-2016. In addition, National Agency against Trafficking in Persons (NAATIP) continues to play an important role in championing human rights. The Roma population is still disadvantaged because of negative public attitudes and structural discrimination when it comes to healthcare, jobs, education and housing. The country does not acknowledge or support civil [partners or those signed in a different country. 2.2 Bribery and Corruption Corruption and bribery are illegal across the world. EU has rules that govern the countries that make up EU when it comes to corruption activities. According to statistics, in 2013, corruption in Romania was very high. Out of 177 countries, Romania was ranked 69th according to the Transparency International Corruption Perceptions Index (Foreign & Commonwealth Office 2013). In the same period, the Eurobarometer reported that 93% of the population ranked corruption as a major problem in the country. Furthermore, the Cooperation and Verification Mechanism has continuously monitored the Romania judiciary to address the corruption related complications. Since 2007, the Romania government has passed numerous legislations including the introduction of the National Anti-Corruption Strategy (Foreign & Commonwealth Office 2013). However, the country is supposed to continue supporting the judiciary and cultivating a culture of integrity in averting corruption related issues. Corruption itself increases the cost of doing business and some segments within the economy, and cultural sectors continue to benefit. Integrity, ethics, morals and social justice should be championed to ensure the country operates effectively without corruption and bribery (Foreign & Commonwealth Office 2013). 2.3 Environmental Degradation A quarter of the country especially the Transylvania regions is covered by forests and the logging industry is developing faster. Industries are developing faster which contributes to 38.3% of the GDP, and it is estimated that it employs more that 33% of the active population (SME Toolkit, 2015). The deforestation (logging) affects the ecosystem and displaces some of the important habitats. It can further affect the hydrological and geological factors. For example, surface disturbance may contribute to pollution of aquifers and underground waters. In addition, deforestation leaves the ground bare resulting in soil erosion in which the nutrients and other vegetations are swept into the rivers and other water bodies. The nutrients imbalances the aquatic life and may result in additional conflicts and degradation factors. The industry through green emissions contributes to global warming and environmental degradation. The industries located in Romania utilize a lot of energy, and since most of the energy is throwing nonrenewable processes, the region is vulnerable when it comes to the sustainability of the environment. 2.4 Agricultural Sustainability Agriculture contributes immensely to the economy of Romania. Agricultural activities represent 6.5% of Romania’s GDP (SME Toolkit, 2015). The industry also employs more than 28% of the active population in the country. Some of the products that are commonly produced include potatoes, sugar beets and cereals. The country still produces dismally when compared to the actual capacity of the country. Since the economy of Romania is still poor when compared to the economy of European Union, most agricultural activities use natural benefits such as rain and sunlight. Any climatic changes affect the agricultural activities since production will decrease. In addition, changes in climate result in changes of pests and emergency of new weeds that affects the production of agricultural products. The lands also continue to lose its productivity and additional resources that include fertilizers will be required to address the problem. It contributes to the requirement for additional funding to address the problem. Therefore, the cost of agricultural activities will increase. 2.5 Organized crime The region because of its large sea borders and large lands is an ideal transit route for traffickers of human beings and drugs. Romania lies on the route for smuggling heroin to Western Europe from the Black Sea, Bulgaria, and Turkey. It is also a nexus point when it comes to migration flows from the South (Afghanistan, Iraq, Iran and Turkey) and the North (FSU, Ukraine and Moldova). Apart from trafficking, Romania is a source of numerous cyber crime attacks on public and private sectors. The country is also vulnerable to cyber enable crime such as false sales and job offers through The internet. The banking sector is also vulnerable because of money laundering using UK financial institutions because of weak bilateral relationships and historical prejudices. 2.6 Terrorism Globalization of terrorism means any country can be affected. The chances of terrorist incidents in Romania are low but still, terrorist activities can take place. The government has placed into consideration structures to check terrorism-related issues. For example, the government deported six French nationals because of preaching and advancing extremist Islam (Taylor 2004). The government has also continued to collaborate with international bodies to address terrorism, and extremist activities (Ministry of Foreign Affairs 2015). The Romanian government has introduced numerous legislations, proposals and even institutions to address the problem (SRI 2015). Some of these include the National Strategy for Preventing and Countering Terrorism, National System for Preventing and Countering Terrorism (NSPCT), and Romanian Intelligence Service. These bodies and documents have been tasked with gathering, reviewing and using appropriate tools to address terrorism-related complexities. 2.7 Infrastructural Developments The Romania’s infrastructure is extensive with thousand kilometers of roads, rail and extensive telephone lines (National Encyclopedia 2015). However, poor investment of infrastructure for long times has resulted in the infrastructure been in a poor state. Nevertheless, the available infrastructure has been used to transport the agricultural products including logging and industrial activities. Disruption of the infrastructural development means business, economic and social activities will not be accomplished with the planned expectations. 2.8 Political Risks/Instability The democratic space in Romania has been expanding, but the misunderstanding between the President and the Prime Minister has contributed towards a scenario of political instability (Romania Insider 2015). The Prime Minister has been accused of corruption and money laundering resulting in the creation of division between the supporters. The National Anti-Corruption Director has continued to check the business activities of the Prime Minister and even planning to direct the legislature to introduce a motion of no confidence in the Prime Minister (Stratfor Global Intelligence 2015). In addition, the location of Romania within Europe has seen an increase in geopolitical tensions, separatist movements, and political violence. The government has to institute economic reforms because the price of goods is increasing. Foreign Direct Investments have decreased, and the introduction of reforms may affect the normalcy and introduce conflicts. 2.9 Health Incidents (Humans) Diseases are inherent in any country. The country has developed measures to champion healthiness in the country. The country has address control and prevention of non-communicable and communicable diseases. In addition, the government has strengthened the preparedness, surveillance and response to any medical related incident (World Health Organization 2015). However, newer diseases and mutations continue to occur, and measures should be introduced to address the problem. For example, lifestyle diseases are in the rise meaning awareness and changing lifestyles are integral in improving the health conditions of individuals. In addition, environmental sustainability organizations should work together with the health department to provide assistance in ensuring health is encouraged and addressed conclusively. 2.10 Earthquakes Numerous earthquakes and eruptions have occurred in Romania and around Romania. The government has instituted numerous measures to address the earthquake issues, but the occurrence of the earthquakes sometimes is not predictable. In addition, the losses associated with the occurrence of earthquakes in large and can even affect the national infrastructure. 3.0 Risk Analysis To understand the capacity, a 5*5 matrix is used to understand the risk dynamics. The following table illustrates the impact and probability of an incident occurring. The red sections highlight those instances of extreme risks in which occurrence of the risk will impact the country immensely. The orange segments illustrate the chances in which the risks can occur, and measures are in place that can be employed to counter the problem. The light green indicates low risk while the dark green illustrate the minimum risk, which can be addressed easily based on the mitigation measures that exist. 4.0 National Risk Assessment Matrix Risk Identification Qualitative Risk Assessment Risk Response or Action Plan Risk ID Risk Event Effect Probability Impact Overalls Actions 1 Human trafficking/Human rights According to numerous legislations and conventions, human trafficking exploits people and development of these individuals is normally hindered. The families involved are affected and general loss to the country. In addition, consequences of trafficking may result such as deaths and passage of communicable diseases. Furthermore, some communities are disadvantaged such as Roma when it comes to accessing human right fundamentals such as education 61-80% Significant High risk The Romania government should continue championing and supporting Agency against Trafficking in Persons, effective implementation of National Anti-Trafficking Strategy 2012-2016, and other legislations that target human rights and human trafficking. It is also important to educate the country about cultural diversity that is associated with ethnicity. The view of Romans should be changed, and the structural issues addressed to ensure equality is encouraged throughout the region. In addition, gender sensitivity and expectations should be addressed to create a diverse country, which would continue to develop. 2 Bribery and Corruption Corruption activities usually favor one segment of the country. For example, corruption increases the cost of doing business and makes it difficult to start and expand businesses. In addition, some judgments may disadvantage some segments of the society. For example, a transparent judiciary ensures the right decisions are made while a compromised judiciary subverts the expectations of the judiciary. 61-80% Significant High risk The judiciary should be strengthened through the provision of resources to ensure it becomes independent. In addition, the investigative bodies including the Antic Corruption should continue investigating and charging persons guilty of corruption activities. A culture of corruption free should be encouraged through educating the people on challenges associated with corruption and how the problem can be addressed. 3 Environmental degradation The environmental is important in achieving any economic activity and sustaining the social life of the inhabitants. Environmental degradation results in displacement of some creatures and causing pollution in other instances. For example, industries emit pollutants that affect both the ecosystem and the water bodies. The deforestation without strategic considerations may result in changing the climatic conditions of the region. The agricultural activities account for a large portion of GDP meaning lack of addressing the environmental degradation will affect the economy of Romania (FSC International 2015). 61-80% Significant High risk The environmental bodies should be funded to continue championing the environmental sustainability measures. The environmental bodies should continue to monitor the activities of the different sectors and advice on measures to improve the sustainability requirements. In addition, the industries and other sectors should be informed of the importance of environmental sustainability and integrate the processes into their respective sectors. The public awareness improves the understanding of environmental sustainability, and the public can work with other stakeholders such as the environmental organizations in championing environmental sustainability measures. The public can report industries and persons polluting the environment and legal measures undertaken to address the problem. 4 Agricultural Sustainability Agriculture and industries employ a high number of people. The rural people source of income is agricultural activities. The risk is high because of changing climatic conditions and competitions from other countries. In addition, free trade and other obligations contained in the treaties in which Romania has ratified means the region is at risk. Furthermore, the agricultural strategy does not compete with agricultural practices of other regions because the use of equipment and modern methods of farming have not been integrated into the system. 61-80% Significant High risk The farmers should be taught to employ new methods of farming. The dependency on rainfall and other traditional means of farming should be changed through the provision of resources and benefits to change the approach of doing agriculture activities. The farmlands and regions should be zoned to allow each zone to cultivate a farm produce that grows better in that zone. It will ensure specialization, which translates to better production. Legislations should be passed to ensure favorable conditions for farming are legalized. 5 Organized crime The strategic location of Romania has created an environment that champions organized crime. Counterfeit goods, human tracking, and drugs can be moved easily because of the large land and sea front. The socioeconomic environment will not be conducive and more deaths will be reported, and more people trafficked. In addition, it becomes difficult to do business, and the cyber crime related activities affects other countries across the world. 61-80% Significant High risk The security institutions should be strengthened. The intelligence gathering and analysis should be funded to address the challenges and issues associated with organized crime. The branches of government should introduce measures to suppress or eliminate the aspect of organized crime. Some of the approaches include introduction of legal requirements that guides the way activities are done, superior land and sea management to ensure it is not used for ulterior motives and addressing corruption within the different departments that form the government. 6 Terrorism The occurrence of terrorist activities leads to deaths, disruption of economic activities and even infrastructural complications. The chances of terrorist activities occurring in Romania is minimal but due to global radicalization means that measures should be in place to address any instances of terrorist associated activities. 41-60% Minor Low risk The National System for Preventing and Countering Terrorism (NSPCT) and Romanian Intelligence Service should be strengthened. In addition, anti radicalization strategies and immigration department should be strengthened to ensure persons coming into the country are vetted while ensuring radicalization of people is eliminated. The different stakeholders should be integrated into the process to prevent incidents of radicalization and provide intelligence to relevant bodies. 7 Infrastructural developments Social and economic activities will not be completed within the specified times. Additional challenges may arise because of ineffective infrastructural capabilities. The continued development of infrastructure means risk assessment should be continuous to input the changes into the system 21-40% Minor Low risk Investments in infrastructure should be supported, and the stakeholders within the infrastructural sector have to understand the importance of the infrastructure. It can be achieved through auditing the current infrastructure and proposals on appropriate improvement of the current infrastructure should be acknowledged. 8 Political Risks Political instability affects the development of a region. The economic activity will be disturbed and contributes towards structured disagreements especially based on political ideologies and following (Coface for Safer Trader 2015). 41-60% Moderate Moderate risk The two major leaders should be brought together, and the integral differences sorted out. It is a political issue and requires political approaches to champion political stability. In addition, the suspicion of the Prime Minister when it comes to corruption-related issues to be investigated within the shortest time possible. Moreover, the President should not use the corruption related issues to aggravated political instability. The Directorate should continue with its work without external interference (The Economist 2014) 9 Health Incidents Health is important in ensuring individuals participates in nation building. Unhealthiness is expensive to the government because resources aimed at development are diverted to address the health factors. In addition, unhealthy individual reduces productivity, which affects the entire production. Hence, it is important to be in good health to contribute to the development of the country 41-60% Moderate Moderate risk Additional developments such as improvement of the health centers, purchase of modern equipment and strengthening the research and development institutions should be encouraged. It ensures superior services are provided, and individuals would continue developing the country (Lampe, 2014). 10 Earthquakes Deaths, loss of property and disruption of normalcy due to infrastructural failure are common when earthquakes occur. 41-60% Minor Low risk Even though the influence of earthquakes is minimal, and the government has studied extensively, it is important to create awareness. It includes informing the public how to escape or protected from the incidents. In addition, implementation of scientific investigations including studies with the help of modern technologies ensures the earthquakes consequences are avoided. 5.0 Fault Tree Multiple causes are resulting in losses exist. Numerous tools and techniques exist, which can be used to analyze the situation. The commonly used is a fault. The following diagram shows the causes of national losses. The triangle represents OR action of situation occurring; the CIRCLE represents a stand-alone component while the arrows direct the occurrence. It is evident numerous factors, and shortcomings contribute to the occurrence of incidents. 6.0 Allocation of Monetary/Budget The estimated GDP for 2015 is $215.302 billion meaning 1% is approximately $2.2 billion Rating Risk Risk Rating Amount allocated ($ million) Action Justification 1 Human trafficking/Human rights High risk 250 Strengthening and supporting Agency against Trafficking in Persons, effective implementation of National Anti-Trafficking Strategy 2012-2016, and other legislations that target human rights and human trafficking. It is also important to educate the country about cultural diversity that is associated with ethnicity. The investigative institutions should have resources to fulfill their roles and responsibilities. In addition, creating awareness reduces structural different and negative perceptions due to discrimination 2 Bribery and Corruption High risk 200 The judiciary should be strengthened through the provision of resources to ensure it becomes independent. In addition, the investigative bodies including the Antic Corruption should continue investigating and charging persons guilty of corruption activities. The judiciary will not be influenced because they will not depend on other segments of government. In addition, awareness improves the understanding of corruption and measures can be introduced to address the problem easily. 3 Environmental degradation High risk 150 Creation and support of environmental bodies, creating awareness, investigation and charging the persons/organizations responsible for environmental degradation The environmental organizations have the knowledge to champion sustainability and provision of the resources ensures the integral organization processes to sustainability of the environment 4 Agricultural Sustainability High risk 400 Research on new methods of farming, providing farmers with resources, creation of industries to improve the quality of the products (Lincaru and Ciuca, 2014) Modernization and increasing value of farm produce increases the revenue generated and also improves productivity (European Monitoring Centre for Drugs and Drug Addiction 2015) 5 Organized crime High risk 150 The security institutions should be strengthened. Resources should be provided for investigative, collection of intelligence and analyzing the information. In addition, corrective measures such as legal measures should be introduced. Understanding the operations and methods of organized groups informs on approaches that can be introduced to address the problem (Filho 2012) 6 Terrorism Low risk 100 The National System for Preventing and Countering Terrorism (NSPCT) and Romanian Intelligence Service should be strengthened. It ensures the governmental institutions have information that can be acted upon easily 7 Infrastructural developments Low risk 250 Continuous investments and analyzing newer approaches to sustain infrastructural development Guides the government on the appropriate measures and how the infrastructure can be developed to sustain operations (Costigliola 2012) 8 Political Risks Moderate risk 100 Institutions should be used to address any challenge that may arise, and political tolerance should be encouraged and championed Political perseverance and democratization is important and creating awareness ensures individual issues cannot be seen as political or affects the entire ideological grouping 9 Health Incidents Moderate risk 250 Research and acquiring modern technologies is important. Also, reviewing changing health requirements and engaging the public is important (Bache and Andreou, 2013) Prevention is better than cure and prevention strategies reduces the cost of health care because most diseases are preventable in nature 10 Earthquakes Low risk 150 Technologies that can detect earthquakes and seismic changes should be acquired and strategically placed across the country. Creating awareness is also important Awareness and predicting occurrence of earthquakes are crucial. Also studying previous earthquakes provide the stakeholders with basis of making informed decisions Total 2,000 7.0 Conclusion Romania is a country located in Europe and is strategically located in terms of geography. The infrastructural and economy of the country is growing, and risks risk related issues. Some of the risks include health, human rights, corruption, and infrastructural development, among others. The government and other stakeholders should seek measures than can be used to address the problems. Some of the proposed strategies include strengthening institutions, changing the culture, modernization of farming approaches, and continuous collaboration with other international bodies and organizations. 8.0 References Bache, I., and Andreou, G. 2013. Cohesion Policy and Multi-level Governance in South East Europe. London: Routledge. Coface for Safer Trade. 2015. Romania. Retrieved from http://www.coface.com/Economic-Studies-and-Country-Risks/Romania Costigliola, V. 2012. Healthcare Overview: New Perspectives. New York: Springer Science & Business Media. Earthquake Track. 2015. Recent Earthquake Near or In Romania. Retrieved from http://earthquaketrack.com/p/romania/recent European Monitoring Centre for Drugs and Drug Addiction. 2015. Romania country overview. Retrieved from http://www.emcdda.europa.eu/countries/romania Filho, W. 2012. Ecological Agriculture and Rural Development in Central and Eastern European Countries. London: IOS Press. Foreign & Commonwealth Office. 2013. Overseas Business Risk – Romania. Retrieved from https://www.gov.uk/government/publications/overseas-business-risk-romania/overseas-business-risk-romania FSC International. 2015. Risk assessment. Retrieved from https://ic.fsc.org/national-risk-assessments.310.htm Lampe, J. (2014). Balkans Into Southeastern Europe, 1914-2014: A Century of War and Transition. New York: Palgrave Macmillan. Lincaru, C., and Ciuca, V. 2014. Youth and the Labor Market in Romania. Cambridge: Cambridge Scholars Publishing. Ministry of Foreign Affairs. 2015. Asymmetric risks. Retrieved from http://www.mae.ro/en/node/2858 National Encyclopedia. 2015. Romania - Infrastructure, power, and communications. Retrieved from http://www.nationsencyclopedia.com/economies/Europe/Romania-INFRASTRUCTURE-POWER-AND-COMMUNICATIONS.html Romania Insider. (January 13, 2015). The political risk map shows Romania’s progress, but PM-President dispute might hamper political stability. Retrieved from http://www.romania-insider.com/political-risk-map-shows-romanias-progress-but-pm-president-dispute-might-hamper-political-stability/139468/ SME Toolkit. 2015. Romania Overview. Retrieved from http://www.smetoolkit.org/smetoolkit/en/content/en/7479/Romania-Overview SRI. 2015. Preventing and countering terrorism. Retrieved from http://www.sri.ro/prevention-and-countering-terrorism.html Stratfor Global Intelligence. (June 10, 2015). Romania’s Corruption Scandal Threatens Political Stability. Retrieved from https://www.stratfor.com/analysis/romanias-corruption-scandal-threatens-political-stability Taylor, Sarah. (September 2004). Persona non grata: French nationals banned from Romania for ‘terrorism links’. EuroNews. Retrieved from http://www.euronews.com/2015/04/09/persona-non-grata-french-nationals-banned-from-romania-for-terrorism-links/ The Economist. 2014. Romania – Risk. Retrieved from http://country.eiu.com/article.aspx?articleid=682643252&Country=Romania&topic=Risk&subtopic=Credit+risk&subsubtopic=Overview World Health Organization. 2015. Romania - Health. Retrieved from http://www.euro.who.int/en/countries/romania Read More