Mircea Ursache, CEO World Trade Center Bucharest: "The need for a sovereign investment fund is felt"

Our country's economy needs a sovereign investment fund, said Mircea Ursache, CEO of World Trade Center Bucharest and former President of the Authority for the Capitalization of State Assets, who proposed the creation of such a fund as early as 2009 to the Government of Romania.

"In 2004, during the last part of my mandate at AVAS (now the Authority for the Administration of State Assets) as it was called then, I announced the end of mass privatization. Practically, from the entire state portfolio, I estimated that 90% was transferred from the public domain to the private domain (...). In 2009, when I returned to AVAS, I found that the residual portfolio of the state is the same and it is not small at all", said Mircea Ursache, who was also Vice-President of ASF.

According to him, there are currently 58 companies at The Ministry of Economy, under the umbrella of the Authority for the Administration of State Assets, while there are more than 60 commercial companies in the portfolio of the State Domains Agency. As for the agricultural lands, the latest figures show about 300,000 hectares under the administration of the Ministry of Agriculture.

The current CEO of World Trade Center Bucharest emphasized that, by being included in a sovereign investment fund, the management of these companies is removed from the political tutelage and taken to the area of the free economy.

"The idea of the sovereign fund consisted in a vehicle that could solve many of these problems. First of all, coming out of the political tutelage, companies move to a principle of transparency, corporate governance and will be obliged to make reports. Basically, I am no longer at the mercy of some ministers or secretaries of state, who change once every four years and who every time say that what was before is not good", said Mircea Ursache. Â

He added: "The sovereign fund was not swallowing everything. We are only thinking about large companies, but it is a phased process. As Eurostat said, Romania will not be able to include everything in the fund at once. We're putting in stakes and seeing how it goes, because the impact will be huge."

According to the former Vice President of ASF, another feature of the fund was that, within a period of twelve months, all companies had to be listed. "There are a lot of residual, minority packages that, by their continued existence in the state, do nothing but give work to officials from the ministries", said Mircea Ursache.

Read Do we need a Sovereign Fund in our country?

The director of the World Trade Center Bucharest also said: "The idea of a sovereign fund should not scare us. The fundamental issue is related to the financing of the fund and where the money will go, how it will be spent. In any case, the sovereign fund will not be able to put as guarantees the shares, patrimony and assets it has. The sources will be different"

In Mr. Ursache's view, the fund should be a vehicle that can sell and buy stakes in companies. "If you remember Renault's problems in France, when they immediately intervened and bought a stake. Only a sovereign fund does that," Mircea Ursache pointed out. "What I want to say is that, at the moment, the need for a sovereign investment fund is felt; it would be a useful hat for the economy."