This interview, with an introduction, was printed by the UKTI magazine Global Trader in 2014.

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Recent headlines in the UK media have raised fears of an ‘invasion’ of people from Romania and Bulgaria, following the relaxation of EU immigration rules at the beginning of 2014. But what about the movement the other way –of British businesses seeking a foothold in the Romanian market? In 2005, Dr Mirela Meita opened a Romanian office for the London-based PR and public affairs firm Chelgate. Having worked as Director of the Office of the President of the Chamber of Deputies, she brought with her a rare insider’s perspective on the more intricate aspects of Romanian politics.

Now, with eight years’ experience as Director General of Chelgate Romania, she has also developed an understanding of commerce in Romania, and of the special nature of the marketplace in this once tightly-controlled communist nation. Here she speaks to Marcus Sowerby about the difficulties and idiosyncrasies of doing business in the rapidly-liberalising Romanian market.

Q Mirela, Romania has now been post- Soviet for over 20 years. Back then, there were radical differences between Romania and Western Europe. Does that still hold true today? Do you still notice Romanian idiosyncrasies as you move between London and Bucharest?

A Yes, I do, especially in my field, because Romanians’ understanding of PR is still so different. The notion of PR isn’t exactly alien, but it is definitely viewed as a management luxury. There are other differences. In rural Romania, almost everybody relies on cash. That has an unpredictable impact on consumption. And there are bureaucratic hazards: badly-connected outsiders may be outmanoeuvred by well-networked Romanians, whether in a planning application or in a tender. This is particularly true with government contracts.

Also, the state remains a far larger actor in the market than in most Western economies. Indeed, the European Commission has been an important client of mine since our office opened. We won that contract as an outsider, when we first started out – that’s rare, but we showed it’s possible.

Q In spite of these difficulties, and in spite of the recent immigration controversy, Romania is renowned as a very worthwhile commercial destination. Why?

A There are many answers to that question. At the close of 2013, The Economist wrote that “Romania is booming”, and reprinted an official figure from the National Statistics Institute putting Romanian GDP growth at 4.1% in 2013. That’s a very impressive figure, in its wider European context.

The country is also becoming more politically stable, while costs remain low. In that regard we can act as a foothold in Europe. Skilled graduates are abundant, including in IT. The country is also rich in opportunities for catching up: under-developed sectors can become chances for profit. The British firm Ukash has capitalised on that rural Romanian preference for cash, for example.

But the lesson of Debenhams’ experience in Romania is that you can’t simply grasp those opportunities without real forethought. Romania is not London. Probably the single most troubling problem for Westerners is corruption.

Q How serious is the corruption in Romania?

A It’s still there, even now. There have been contracts we have lost because we won’t play that game.

Even in media relations, it can occasionally be a problem. In many countries, it’s not unheard of for politicians – and sometimes businesspeople – to pay editors for favourable press. This isn’t common, however.

For us, operating cleanly, the challenge is to work without using these practices and to avoid the more common forms of corruption, like bribes. It can be done, of course, but, in Romania, if you don’t want to pay bribes, whatever business you are in, then life is easier if you have a Romanian partner who knows just how to keep you safe, and within the law. That’s a piece of advice given at the very front of the US Commercial Service’s 2012 introduction to Romania.

This is also important for British companies. Since 2010, the Bribery Act has made it a criminal offence for a British company to accept or pay bribes abroad, even if the practice has no impact on the British side of the business, and even if those bribes are paid by third-party contractors, like a PR firm. The sanctions can include imprisonment, fines and, obviously, enormous damage to corporate reputations. So it’s crucial that you find a firm, like us, that does business properly.

Q So is the Romanian media in good condition today? How does a new business go about generating press coverage?

A Well, the days of Ceausescu’s state-controlled media are gone, but that’s not absolutely good news. The communist media hired excellent journalists in its day – nowadays many professionals are leaving the business. There’s a rush for ratings and sales. Low-grade stories and tabloids are commonplace now. Political influence over newspapers hasn’t been exorcised entirely, either.

So if you have a newsworthy story, you can’t expect it to get coverage automatically. Again, it’s a matter of convincing the journalist that your story has merit, that your story deserves a place amongst the populist material that sells the newspaper. It’s seldom an easy sell.

Q So should companies worry about doing business in Romania? Debenhams recently cut its losses, as you mentioned, labelling Romania an “extremely difficult market”. Is relocating to Eastern Europe still too hazardous?

A I’ve been candid, but I don’t mean to be alarmist. In fact, Romania offers ample opportunities and, if you can, the best time to invest is before other people spot those opportunities. Property is cheap now. Labour is cheap now. Romania offers the growth rates of an emerging market in Africa without the political or security risks. The IMF and EU are strong-arming the government towards transparency while reducing it in size through privatisation. This has been controversial, but it’s good for business. Debenhams had trouble here, but Balfour Beatty is working on railway construction, and G4S is expanding in the Romanian security business.

Q What about government relations – how do firms handle that challenge, when they come from abroad?

A The key difference between Westminster and Bucharest lies in government structure, and also in social customs. It’s not actually corruption that provides the twist, because Westminster isn’t exactly the city of God. Neither is Washington.

Companies moving to Romania often need to conduct their political contacts at a very high level. But business-government relations are often informal here. That informality can be deceptive. There are still rules, some of them official, and you need to know them. But there are very few public affairs companies that understand how to influence the Romanian political system honestly in this country – and that includes the international firms. It’s very hard to translate public affairs experience in America, or even European countries, to Romania, and that’s especially true for companies handling complex issues.

At Chelgate we have some very experienced members of staff who have worked for years in their particular sectors, understanding the specific sectoral challenges. One of those challenges is the Bribery Act in the UK and the Foreign Corrupt Practices Act in the States, each meaning that you absolutely cannot leave it to a contact to “fix” things for you, as used to happen. That’s central to the way we operate – combining understanding of the Romanian marketplace with the ethics and professional standards that would be expected in London, or in New York.

Q So what do you think will be the main changes in the Romanian marketplace over the coming decade?

A In the last six months we’ve seen court sentences handed out to people who, two years ago, seemed untouchable, quite secure in their corruption. Formal tendering rounds are becoming more common. Personal friendships are counting for less. So I think the trend is an upward one, and Chelgate will increasingly deliver core PR and public affairs services to clients, giving less and less time to the roles we occupy today – that is, providing something like “PR+”, a combination of PR, public affairs, and helping clients to navigate their way safely through what you might call the venal or informal aspects or Romanian business and politics. We help clients address those peculiarities, without getting embroiled in corrupt or improper practices.

Obviously, this evolution will force change upon my sector, but the future belongs to the youth. We think that’s us!

The press release

Since 1989, public relations has grown relatively slowly in Romania. In the beginning, as in many developing markets, PR consisted almost entirely of issuing press releases for firms, government departments, or NGOs – charities, for instance. When Chelgate entered the market in 2006, 17 years after the start of liberalisation, it was still the first Western PR firm to operate in Romania. Today, we are not alone, but many rivals operate through local partners or franchises, and do not necessarily uphold global standards in their Romanian practice. Many firms claiming to be multi-national are, in fact, far more multi-local.

Advertising

In spite of two decades or development, Romanian PR remains in the shadow of advertising. It is typical, especially in consumer markets, to hire an advertising company with a small PR service included in the price – this will offer a press release distribution service, and basic media relations. Whilst many ad agencies occupy glass-concrete-and-steel offices in the centre of the city, PR agencies tend to have lower profiles, and lower turnovers.

This is not universally true. Strategic public relations – working out how a firm does and should manage its relationships with its most important publics, and executing a strategy over the course of one or more years – is very gradually becoming more common in Romania, but few can craft the kinds of complex, effective campaigns that Chelgate works on. Instead, consumer-focused PR dominates, and operates at a lower level. It might offer puff-pieces in the media, for instance, especially in newspapers and outlets that are willing to print copy from PR agencies nearly without alterations – newspapers that, as a consequence, are less trusted by readers. The harder task – of persuading

Price wars

In the Romanian industry today, there is significant downward pressure on prices. Chelgate has met this challenge with flexibility in its prices, and in its working practices, but refuses to cut its operations below a certain level. For our lower-budget clients, we run skeleton campaigns with a smaller staff resource, pared back to only the most cost-effective tactics to meet a client’s given aims.

But our regular clients remain happy to pay a rate above rock-bottom prices. We insist on protecting the quality of our service, simply because we are uninterested in low-price, low-quality delivery. This work is not useful to clients, or stimulating for us. On a low retainer, we do not have the time or resources to work with a client to fully understand their position, to draft messages carefully and professionally, to select the right ways to protect or develop a given relationship, or offer the client the service they really require in order to increase sales or protect their relationships.

Local knowledge

All of our Romanian team are Romanians themselves, and all speak fluent English. As our staff profiles show, we place a high value on having a team drawn from diverse professional backgrounds. Sometimes, however, when an outsider wants to understand the nuances of the Romanian market, local knowledge is not enough – a local can too easily overlook the unique patterns and quirks of their home market. This is why we support Romanian executives with Romanian-focused members of our British team, who support clients moving into Romania for the first time, or expanding their operations in the country. These London-based team members are also listed on this site.

HOW WE WORK TOGETHER

Global standards

We pride ourselves on delivering Romanian campaigns to a global standard. Our Romanian office provides a service equivalent in professionalism, creativity and rigour to that of our London office, and of leading international PR companies. Our billing is predictable, and is structured to the client’s needs. We make ourselves fully accountable to clients, meeting regularly with them and reporting on media coverage and other achievements – or setbacks – in a structured, honest way. As a long-term provider of services to the European Commission, and with a client book that has included multinationals like Vodafone, we are used to working to a high corporate standard.

Cultural sensitivity

Whilst firms often expect to have to adapt to stark cultural differences when moving into Asia, the Middle East or Africa, they less often think about these differences when moving into Central and Eastern Europe. Indeed, the cultural differences between the UK and Romania – especially Bucharest itself – are not enormous, but they can matter.

In particular, formality and what could be seen as old-fashioned practices persist. Men, not women, tend to drive if there is a choice between the two. Titles are used more actively than in the UK. Ties will tend to be worn in the vast majority of business encounters, and men tend to stand to greet people.

Working with partners

Many firms, from retailers like Debenhams to financial service providers like RBS, have failed to crack the Romanian market. In 2012, the US Commercial Service wrote – in its introduction to Romania as a commercial destination – that it is “extremely difficult” for foreign exporters to overcome market risks “without an effective and qualified local partner”. Chelgate agrees, and works as such a partner to businesses moving into Romania. In our work for migrating firms – from the US, from Western Europe, and sometimes from elsewhere – we advise and, when appropriate, hand-hold. You can read more about our service here. Below is a quick overview of our thoughts on the experience of moving into Romania.

Effective B2B

One of Chelgate’s roles involves connecting businesses moving into Romania with target customers. For many businesses – B2B businesses – their customers are solely other businesses. These target businesses have specific interests and niches, and advertising is often too clumsy a way of reaching them. Selling from business to business demands tailored public relations. Advertising may be a part of this, but so are a variety of other tactics.

In particular, a good campaign is tailored to the networks within which the target customers move. That includes the trade gazettes they read, the websites they visit, the conferences they attend, and the social media accounts they follow. The client needs to know whether, in their particular Romanian industry, it is best to approach firms at networking events, in their offices, or via a third party – perhaps via a personal connection, for example.

Chelgate provides advice on the basis of our long experience, our knowledge of Romanian business practices and culture or, if we find we don’t have an answer in-house, on the basis of advice given by our network. Chelgate has been in Romania since 2006, but our staff also contribute deep experience from their prior careers in politics, business, administration, and academic study. Our staff profiles can be found here.

Connecting with a mass audience

As well as B2B work, Chelgate’s Romania team has managed campaigns that engage large regional and national mass audiences. For instance, we were taken on by the European Commission to raise the EU’s profile in Romania, and to improve public understanding of its work and purpose. Chelgate has delivered a very broad range of events – from public debates to lectures – that have connected Romania’s population with the Commission’s priorities and programmes.

For businesses and NGOs, we do the same: we connect companies with potential buyers among the body of the population. We allow organisations to communicate messages to large, sometimes disparate audiences – be they students, bankers, consumers, retailers or lawyers.

MORE, MEDIA REL AND CRISIS?

Modern Eastern Europe

At the start of the 20^th century, Bucharest was often called Little Paris. Like other parts of Romania and Eastern Europe, it was rich in medieval and 19^th century architecture. But under German occupation from 1940, and under Soviet occupation from 1945 to 1989, much of this architectural heritage was destroyed. It was replaced by functional, badly-built, tasteless communist apartment blocks and edifices.

This is the familiar story of Bucharest’s decline and fall. It is only partly true. This is a story of what has been lost. But it is not the story of what Bucharest’s turbulent 20^th century has given Bucharest, or of what Bucharest is becoming today. Bucharest today is undersold. It is a city in flux, changing in the hands of its young population, and increasingly rich in opportunities. Romania’s capital is re-inventing itself, and its recent history, and most Westerners are missing out.

What does Bucharest have to offer? In this introductory article addressing two of modern Bucharest’s strengths, we begin a series that will profile Bucharest as a young, dynamic capital.

Tech-literacy and professionalism

In the UK, Romanian migrants are typically viewed as hard-working. But they are not just hard-working: many young Romanians, especially in the capital, are also creative and skilled. Leading information technology news website TechCrunch exposed Romania’s glut of skilled labour in the coding/programming sector in 2012. But, by then, the article was already far behind the curve. Microsoft was already tapping the Romanian labour market, and game designer Ubisoft had already moved on the market back in 1992.

Bucharest’s workforce lends itself to the IT sector partly because of a Cold War legacy, namely a very communist emphasis on mathematics and sciences in higher education, an emphasis that persists today. Since 1989 computer sciences has become a leading field of study in its own right.

In addition to these purely technical subjects, dedicated colleges of administration also focus on economics and politics, while others deliver high-quality medical education. Other colleges and universities offer qualifications other subjects, from law to literature.

As a proportion of its total students in higher or tertiary education, Romania has more students engaged in social sciences, business and legal study than any other country in the European Union. Romania also has fully twice the proportion of total students engaged in engineering, manufacturing, and construction than has the UK.

Character, style and value

Central Bucharest is changing rapidly year by year. New construction projects, from shopping malls to luxury offices, are appearing. Perhaps more importantly, Bucharest is haphazardly harmonising its communist architecture with new builds – whether on the grand scale of the Marriott International refit of a Ceaușescu-era International Style building, on the Calea 13 Septembrie, or on a far smaller scale.

Refurbishments of older buildings also make homes for new cafes and restaurants with innovative menus, low prices, and idiosyncratic styles that lace the modern with the traditionally Romanian. Café Ludic, near the city’s centre, serves large, excellent meals, offers a beer-garden with a raised terrace and heavy wooden tables shaded by trained climbing plants, and is a hub for young people drinking beer and playing board games.

Some of Bucharest’s older, grander structures remain, some untouched by the 20^th century. The gilded, luxurious Athenaeum concert hall sells tickets for classical performances at truly democratic prices. The building is unique. The hall itself bathes in a dim but rich, red glow under a low, domed roof. The main lobby of swirling marble lacks a bar, but quirkily offers a second-hand bookstore and vending machines in its place. The out-of-hours tours are given by elderly, reticent men, custodians of one of Bucharest’s strangest and most rewarding attractions, who speak almost no English, only a few necessary words, “Here, perfect acoustics…”