The Role of Transylvania in the History of Romanian Industry

by Thibault Delplanque

Transylvania is a region that is not only socially, economically and culturally historic for Romania, but also industrially important. Since ancient times, the Dacians, under the domination of the Roman Empire, have extracted and worked the metals their mines yielded.

Throughout the ages, Transylvania has remained a land where its people worked hard and harvested many resources. Metalworking, which used to be done on a ‘piecework’ basis, gradually became rarer from the middle of the 19th century, as the industrialisation of Transylvania radically changed the way in which the metals extracted from the mines were processed. This is how metallurgy came to play an increasingly important role in the development of modern-day Romania. Indeed, in regions such as Govajdia, Cugir and Sibisel (see map) in Transylvania, industrial estates financed by the Austro-Hungarian Empire (of which Transylvania was a part at the time) were built to meet the growing demand for railway lines and trains.

From this period at the end of the 19th century and before the First World War, Transylvania underwent major expansion. Numerous investments from the crown of the Austro-Hungarian Empire to improve and renovate the infrastructure reassured industrialists, and factories sprang up at strategic points, fostering the region's steady and growing development at all levels. Employment was plentiful, the many villages and towns were linked by well-equipped railway lines with stations at regular points, and factories were built to meet the growing demand for coal mining, transport and/or agricultural machinery (a field in which Transylvania also excelled).

Then came a complex political period at the start of the 20th century, with the arrival of European tensions that gave rise to the First World War and then, post-war, to the loss of Transylvania by the Austro-Hungarian Empire and its unification with Bucovina, Moldavia, Oltenia, Besarabia, Cri?ania, Bana, Dobrogea, Marma?ia, Muntenia and Maramure? to form Greater Romania in 1920.

After the war, Transylvania voluntarily became part of Romania and was able to take advantage of its many industrial and agricultural assets, as well as its structures, to promote even greater development.

It was the inter-war period that would launch Romania forward and foster its increasingly stable position both economically and politically in Europe.

To give you an economic assessment of the effect of unification on Transylvanian and, more broadly, Romanian industry, we can note, according to G.N. Leon, who has carried out a number of university studies on the Romanian economic structure in the 20th century, that in the space of 17 years (1921 - 1938) Romania saw its return on investment multiply by 6. In other words, almost 12 billion lei were invested over this period. The return on investment was calculated at 70 billion lei. In addition, the number of companies increased slightly over the same period, rising from 2,747 in 1921 to 3,767 in 1938, while capital investment increased by a factor of 17.6, rising from 2.8 billion lei in 1921 to just over 50 billion lei in 1938. Given that Transylvania accounted for 27% of Romania's industrial production, it is easy to understand the importance of this region to Romania at the time in the industrial development of Romania.

Unfortunately, this was not to last. Following its involvement in the Second World War as an ally of the Nazi regime and its defeat, Romania then fell under the yoke of the USSR, wreaking the economic, social, financial and industrial havoc we know today.

When he came to power, Ceau?escu who had understood the limits of the USSR industrial strategies decided to launch the development of new infrastructures all over the country. Even if he's not famous for it, he's helped Romania regain its development momentum. However, what explains the lackluster results and the backlog that has nevertheless accumulated is the lack of efficiency and well-utilized skills. The work mentality was one of appearance rather than performance.

Transylvania, like all the other Romanian regions, was badly affected by the industrial policies adopted during all those years (with a few exceptions, such as Dacia, which belonged to the Romanian state. Based in Muntenia, it enabled the Romanian car industry to blossom and later make a name for itself worldwide). Romania had to wait almost 45 years in this difficult context to see the situation change.

It was only on 22 December 1989 and the end of the regime imposed by Ceausescu that Transylvania, and more broadly Romania, once again adopted industrial policies geared towards constant development, openness to Europe and the world, and a desire to catch up.

Once again, Transylvania has made an effective contribution to the launch of a new industrial dynamic. It benefited from many of its former contacts with the ex-Austro-Hungarian Empire and the surrounding powers. Indeed, the Hungarian settlers in Transylvania at the time, who had decided to stay despite the unification of Transylvania with the rest of Romania, enabled Transylvania to retain the influence of the German language and family contacts. This has encouraged the re-emergence of a solid relationship with the Hungarian, German and Austrian states, making the latter two the first and second largest foreign investors in Romania, with France completing the podium.

Today, Transylvania and Romania in general are in a favorable position for investment, and the countries of the European Union are looking with increasing interest to position themselves in this region. Indeed, buoyed by a full and stable employment market, an educated population, a lower inflation rate than most other European countries, relatively low debt and stable positive growth, Romania is attracting and increasingly pushing Western European countries to increase their foreign direct investment (FDI) and encourage companies to take an interest.

Of course, not everything is perfect. As elsewhere in Europe, there is a labour shortage and a clear need for technological development. There is also a strategic restructuring underway within the financial and legal systems that may lead to some uncertainty.

And at the same time, there is so much potential for development in a context of European industrial recentralisation that it would be a terrible shame not to take advantage of the opportunities offered by Romania these days.

Bibliography:

ROVINARU Mihaela, ROVINARU Flavius. A Historical Perspective on Transylvania's Contribution to Interwar Romanian Industrial Development. Transylvanian Review. Vol. 26, N°1. P68-78. 2017.

Pr NAGY Róbert. Heavy Industry in Transylvania 1880-1914. Transylvanian Review. Vol. 31, N°1. P25-35. 2022.

Cartography:

Map1 - The Great Romania and its jude? - 1920

Map2 - Evolution of Romanian border from 1881 to today