Novel study: 7 out of 10 Romanians consider that the presence of multinational companies in Romania contributes significantly to the development of the local economy
270 million euros, the direct impact in the Romanian economy of Provident Financial Romania
Bucharest, 2nd of November, 2017 – 46% of Romanians consider that the business environment is the engine of economic development in Romania through the jobs created, the salaries offered to the employees and the taxes paid to the state budget. These are the results of a survey conducted by Novel Research for Provident Financial Romania in October 2017 on a representative sample of 1,002 respondents in Romania.
Almost 28% of respondents associate the private sector with exploitation, thinking mainly of low wages and high labour, but do not put all the negative burden on companies, but rather on the social context. Thus, 7% believe private companies are victims of the current system, in the sense that they sometimes do not receive government support.
Developing the economy, rather companies’ responsibility
54% of the respondents believe that the harmonious development of the Romanian economy and society should be a common concern of the public and private sector. Almost 15% believe that this should be the sole responsibility of companies and 11% agree that the government is accountable for the development the country, while 20% consider that the two sectors have distinct concerns and responsibilities.
Specifically, the main concerns of the private sector must be, according to respondents to the Provident study, job creation, better working conditions, professional development of human resources, better wages and innovation of products and services. At the same time, the public sector should be more concerned about Romania’s future, infrastructure development, environmental protection and social equity.
The role of multinationals in the economy
7 out of 10 Romanians consider that the presence of multinational companies in Romania is important, according to the Provident study, and can be translated into jobs (76% of the respondents believe so) and in technology and know-how transfer (71%). At the same time, multinationals contribute to improving living standards in local communities, say 67% of respondents, and make capital inflow into the economy, by contributing to the state budget and investing in Romania (64%), thus contributing significant development of the local economy.
Economic Impact of Provident in Romania
Since its launch on the Romanian market in 2006, Provident has had a significant impact on the economy, quantified by Civitta’s study – 270 million euros directly, 661 million euros indirectly, and 3.8 billion. (Civitta is an independent consultancy company) Thus, the total impact of Provident in the Romanian economy was of 4.7 billion euros, in the period 2006 – 2016. The economic footprint of Provident, measured by Civitta, uses internationally recognized methodologies and standards of analysis, being used by many companies around the world.
In 2016, Provident registered a maximum of 4,100 employees in Romania and became the largest British in the country and one of the largest employers national wide after the decision to hire all agents. The total salaries paid by the company in the period 2006 – 2016 totalled 128 million euros. At the same time, taxes paid for employees, but also other contributions to the state budget, such as income tax, value added tax or local taxes, exceeded 87 million euros over the same period. These include the borrowing costs of EUR 28 million in 10 years and local investment investments of EUR 27 million.
“Multinationals have a very important role in the economy, but their impact is rarely quantified. Hence the idea of this report, which uses an economically tested and validated international model. Apart from the impact we generate in the economy, expressed in terms of added value and created jobs, Provident plays a key role in the consumer credit market in Romania. Our infrastructure allows us to conveniently serve customers in rural areas, where traditional credit access is either very expensive or does not exist. In addition, we open access to the financial services market for a significant group of consumers, helping them create a credit history and boosting financial responsibility and inclusion, “said Viktor Boczán, CEO of Provident Romania.
The 270 million euros – the direct impact of Provident in the Romanian economy – equates to more than one million allowances for children for one year or about 200,000 pensions granted in one year at a value of at least 115 euros per month. Using the same equivalence, the amount could cover the gross annual gross salary of over 81,000 employees or the income of 50,000 teachers, considering a gross income of 450 euros per month, or even 15,500 doctors with a gross monthly income of 1,445 euros .
Indirect and Induced Impact of Provident in the Economy – quantified by Civitta at 4.46 billion euros – is the multiplier effect of spending on employees, customers and partners with whom the company has business relationships. Practically, wages paid by the company to employees, loans to customers, or the amounts paid to partners return to the economy by consumption, the expenses they make with the services they use (utilities, communications, health, etc.), but also through the taxes they pay, also contributing to the economy. For more details on the methodology used and how to calculate the impact on the three dimensions, please visit www.provident.ro/impact.