Bucharest - World Bank Group President Jim Yong Kim met with Romanian Prime Minister Victor Ponta today on the occasion of Europe Day.

Today is Europe Day, and standing here in Bucharest on this day holds great meaning for me. It’s a privilege to celebrate your country’s achievement of European Union membership in 2007 – just six years ago.

I would like to begin by expressing my sincere thanks to Prime Minister Ponta and our Romanian counterparts for the work we do together.

For many years, the World Bank has been a strategic adviser to the Government in implementing the important reform agenda in Romania in its efforts to join the EU. Our partnership today is built on sharing knowledge. While we are sharing knowledge with Romania that we have learned from around the world, we are also learning from Romania’s experience in many areas as well, such as modernizing social safety nets, and we are sharing that with other countries.

Romania’s political and economic development during the last 20 years is impressive and deserves widespread attention for its accomplishments.

Romania has made huge strides in growing its economy. The good news is that average incomes for Romanians rose from a quarter of the EU average to almost half the EU average as markets opened and institutions reformed.

Even better news is that Romania’s prosperity has been widely shared. The World Bank recently adopted a goal of promoting shared prosperity by fostering income growth of the bottom 40 percent of the income earners in every country where we work. It is gratifying to see that Romania is making great strides, with the income of the bottom 40 percent of the population growing faster than that of the average household during the 2000s.

Together, with the European Commission and the IMF, we are pleased to have helped with the macroeconomic stabilization of Romania through our financial and technical assistance.

The fiscal deficit is down from 7.3 percent in 2009 to 2.5 percent in 2012. The total public debt to GDP is 35 percent, compared to the European Union average of 83 percent. In the last three years, growth has been positive and inflation is heading down towards the target of the central bank. Romania’s progress in stabilizing the economy would have been notable at any time, but it is especially impressive given the uncertain external environment and the continuing crisis in the euro area.

Still, despite good progress achieved by the government, Romania remains the country with the highest poverty levels in the European Union. More than 30 percent of the population lives on less than $5 per day. I would like to draw attention to those who live on so little, including the Roma population here in Romania and elsewhere in Europe. I believe that it is a moral imperative for all governments to put in place safety nets for the poorest and to invest in the education and health care of those most in need. There is a humanitarian argument to do this, but there is also an economic argument as well. If those most in need can be lifted out of poverty, we all succeed – we improve the work force, which attracts businesses, which creates jobs. And if Romania continues to educate the poorest, train them for jobs, and provide quality health care, it will be a model for the world.

The government is rightly focusing now on developing a new growth agenda. In practice, this means building a more competitive, faster growing, and inclusive economy that shares its prosperity with all of the people of Romania. We believe achieving this vision will require deeper structural reforms in many sectors of the economy and public administration. We also believe the government will also have to hold the course on fiscal consolidation, which will require a firm resolve to build on the gains made so far.

To ensure that growth continues to benefit the poor, we believe that Romania should maintain flexible labor markets, which will facilitate the movement from low to high productivity jobs, and will upgrade the skills of its labor force. Establishing a simpler business environment will allow entrepreneurs to create jobs and add value to the economy. But adequate social protection will also be needed for the most vulnerable.

As Romania strives for sustainable growth and to catch up with many of the EU countries on living standards, productivity, and competitiveness, the challenge will be to manage change, which is always difficult.

In this effort, I would like to reaffirm the Bank’s readiness to continue to partner with the Government of Romania on the goal of inclusive growth and shared prosperity.

The author: Jim Yong Kim is World Bank Group President.

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