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1
Romanian Tourism
Long-term investment
in pure nature andhistory
- November 2011 -
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2
Romanian tourism: Looking ahead
More and better road infrastructure, easier access to local tourist attractions; both coverage and
quality should be developed so as to bring road infrastructure closer to the European benchmark; road
transportation prevails when travelling from one destination to another.
More FDIs, more know-how, better services; this will lay the foundations for a wider base of foreign
tourists and longer holiday stays in tourist facilities in Romania
More foreign tourists, more tourism activity; with one of the highest potentials in tourism in theregion (natural landscape and biodiversity), Romania is pretty slow in attracting foreign visitors, who
spend 12 times more on average than resident ones.
Higher education, better grasp of todays tourism realities; employment education is an important
asset for tourism industry; primary education holds an important share in total employment in Romania;possible negative impact on the quality of service and travelling conditions for foreign tourists.
Continuation of well-focused marketing campaigns, higher position of Romania on tourist map;
promoting Romanias image abroad has started to pay off and the number of foreign arrivals in our
country rose 11% y/y in the first seven months of 2011, while gross inflows in the balance of tourismwere up 16% y/y during January and July.
More investments, higher income in the balance of tourism, improved performance of the C/A;
organic investments combined with foreign capital in tourism could generate additional inflows in the
balance of tourism estimated at up to EUR ~1-1.5bn in 2016.
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3
-3
0
3
6
9
12
15
18
21
24
AT HR CZ HU BG PL SK RO HR BG AT HU CZ PL SK RO-1
0
1
2
3
4
5
6
7
8
/
/
33
36
30
27 / /
14
13
12
EUR bn. %
RO RO
0
20
40
60
80
100
120
140
160
HR BG CZ HU SK PL RO BG HR RO SK PL CZ HU
0
50
100
150
200
250
300
350
400
450
500
RO RO
FDIs (stock 2010)/capitain tourism FDIs inflows 2006-2010
Source: Eurostat
Source: Eurostat
Net inflows from tourism
2006-2010Net inflows/GDP
2006-2010
Insufficient FDIs in tourism stripped Romania of potentialwealth
Romania came third in terms of FDI
inflows in tourism during 2005-2009 with
around EUR 186mn; Bulgaria was in a
much better position, raking in more than
EUR 450mn during the same period,
which shows a greater propensity
towards this particular area of activity
Romania is the only country within the
group that posted a negative aggregate
income in the balance of tourism 2006-
2010; Croatia is a top dog, earning almost
EUR 30bn in only five years; under
similar conditions, the C/A deficit of
Romania 2006-2010 would have stood at
less than 4% of GDP instead of ~9%.
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4
SK CZ
BG
HU
PL
Croatia (HR)
RO
-20
0
20
40
60
80
100
120
140
160
180
-200 0 200 400 600 800 1000 1200 1400 1600 -20
0
20
40
60
80
100
120
140
160
180
6.6
/ /
. . . . . . .
Net inflows/ capita, EUR
FDIs/capita, EURBubble size: inhabitants
6,600 6,8006,400
Status of tourism across Central and Eastern Europe
Source: Eurostat
Tourism profile varies from one country to another
Bulgaria attracted netincome close to EUR
7bn 2006-2010 ofwhich EUR 1.8bn in
2010
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5
0
2
4
6
8
10
12
AT HR CZ PL HU BG SK RO
million
0
2
4
6
8
10
12million
20 20
/ /
18 18
/ /
RO
The vast majority of foreign tourists visiting Romania cometo spend their holiday
Arrivals of foreign tourists 2006-2010 yearly average
Source: Eurostat
The purpose of visiting a country (2006-2010)
Source: Eurostat
0
10
20
30
40
5060
70
80
90
100
PL AT SK CZ BG HU RO
0
10
20
30
40
5060
70
80
90
100
Holiday Business
RO
Austria, Croatia and the Czech Republic
have by far the highest check-in rates for
foreign visitors; ~5 times more foreign
tourists put up at a hotel in Croatia thanin Romania, which is closer to the
numbers reported by Slovakia and
Bulgaria.
90% of the foreigners come to spend
their holiday in Romania, which is more
or less the case for Hungary; at the other
end of the scale, Poland holds a higher
share of foreigners coming for business
purposes (>22%), which could mean that
that country is a preferred businessdestination.
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6
Longer holiday stays in Bulgaria than in Romania
1.0
1.5
2.0
2.53.0
3.5
4.0
4.5
5.0
5.5
BG HR AT CZ SK HU PL RO
1.0
1.5
2.0
2.53.0
3.5
4.0
4.5
5.0
5.5
RO
Average stay of non-resident tourists (nights)
Source: Eurostat
Foreign tourists spend more than twice
the time in Bulgaria than in Romania,
which is quite something, considering
that the largest part of foreign tourists
come to Romania for holiday purposes;
Bulgaria and Croatia are the two main
competitors in terms of average stay per
arrival.
0
10
20
30
40
50
60
70
80
90
100
BG RO . . . . . . . AT PL CZ HU HR SK
0
10
20
30
40
50
60
70
80
90
100
Other
PL
RO
UK
RU
DE
RO
Top 5 visiting countries in Bulgaria andselected countries (nights spent)
Source: Eurostat
Top 5 visiting countries in Bulgaria have
a lower profile in Romania (~30%);
Germany is no.1 in terms of nights spent
and here again Bulgaria manages to
outstrip Romania; Germans make up
more than 25% of the total tourist base,
while Romania is trailing well behind with
only 16% of the total.
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Who spends what and who spends the most
Top 10 European countries spending the most (EUR/trip)
Source: Eurostat
Source: Eurostat
How much money the top 5 visiting countries
spend per trip (EUR)
500
600
700
800
900
1000
1100
Fra
nce
Norway
Au
stria
Denm
ark
S
pain
Italy
Ire
land
Belg
ium
Portugal
Swe
den
500
600
700
800
900
1000
1100
Foreign visitors spend less money in
Romania than in Bulgaria; service quality
combined with poor infrastructure
squeeze the countrys capacity to earnmore money; Romania must put its best
foot forward for acquiring new FDIs in
tourism in order to develop both
infrastructure and know-how.200
250
300
350
400
450
500
550
600
AT PL HR CZ BG HU RO SK
200
250
300
350
400
450
500
550
600
RO
Average
Romania should focus more on attracting
tourists from countries that tend to spend
the most per trip; out of the top 10
countries spending the most, Romania is
visited only by France and Italy; tourists
financial spending profile is also
important when it comes to improving the
numbers in the balance of tourism.
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Domestic travelling high profile in Romanian and Bulgaria
No. of trips/inhabitant
Source: Eurostat
0
10
20
30
40
50
60
70
80
90
100
RO BG HU PL CZ HR SK AT
0
10
20
30
40
50
60
70
80
90
100
Domestic Abroad Both
RO
Source: Eurostat
Travelling destination
The financial situation and living
conditions could be the main causes for
weak tourism participation; more than
one out of four people in the EU reported
facing financial constraints, whereas in
Romania three out of four individuals
cannot afford a one-week annual holiday.0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
PL CZ AT HR HU BG SK RO
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
RO
Average
Romanians and Bulgarians prefer
travelling domestically, while all others in
the group have a greater profile of
travelling abroad.
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9
Travelling purposes of resident tourists
Domestic travelling
Travelling abroad
0
10
20
30
40
50
60
70
80
90
100
RO HU BG CZ PL HR AT SK
0
10
20
30
40
50
60
70
80
90
100
Holiday Business
RO
0
10
20
30
40
50
60
70
80
90
100
HU CZ RO BG SK AT HR PL
0
10
20
30
40
50
60
70
80
90
100
Holiday Business
RO
Source: Eurostat
Source: Eurostat
Almost 98% of Romanians spend their
vacation domestically and the situation is
pretty much the same in Hungary; in the
EU, more than 3/4 holiday trips made by
residents were within their country of
residence.
Only residents of Netherlands, Slovenia,
Belgium and Luxembourg tend to spend
most of their holiday outside their home
countries; business trips abroad among
resident tourists have a higher profile in
Poland, Croatia and Austria.
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Holiday destinations for Romanians
Source: Eurostat
Business destinations for Romanians
0
20
40
60
80
100
120
140
160
Itlay
Hungary
Greece
Spain
Germany
Bulgaria
Austria
Turkey
US
Great
Britain
tsd.
0
20
40
60
80
100
120
140
160tsd.
0
5
10
15
20
25
30
Italy
Ge
rmany
US
Hungary
Spain
G
reece
A
ustria
Turkey
F
rance
Au
stralia
0
5
10
15
20
25
30
Source: Eurostat
Italy, Hungary and Greece preferred holiday destinations forRomanians
Italy, Hungary and Greece are the most
common holiday destinations for
Romanians; travelling to Italy could also
be related to the large number ofRomanians working abroad (family
visits).
Italy and Germany are the main foreign
trade partners for Romania; around 30%
of foreign trade is done with these two
countries; the two-fold increase in foreign
trade with the US in the last 10 years may
have prompted a rise in business trips to
the US.
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11
July and August the busiest months of the year
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
tsd
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500tsd
Time of departure for Romanian tourists (2006-2010)
Source: Eurostat
0
10
20
30
40
50
60
70
80
90
100
Domestic Abroad
%
0
10
20
30
40
50
60
70
80
90
100%
65+ 45-64 25-44 15-24
Age groups of Romanians going on holiday
Source: Eurostat
July and August are the busiest months,
cumulating around 30% of total nights
spent in local hotels and other collective
accommodations (EU27: 34%); Bulgaria
manages to concentrate around 36% of
total nights spent in these two peak
months.
Tourists aged 25-44 are the main
travelling segment in all selected
countries, both domestically and abroad;however, Romania displays a higher
share of this particular age group within
the total trips taken by residents (47% of
domestic trips and 52% of outbound
trips).
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Romanians prefer long trips, but spend less than most oftheir counterparts
Spending per trip (domestic and abroad)
Source: Eurostat
0
100
200
300
400
500
600
700
800
900
AT HR SK BG PL RO CZ HU AT BG SK HR CZ RO HU PL
EUR
0
100
200
300
400
500
600
700
800
900EUR
RO RO
Domestic Abroad
Holiday trip length (no. nights)
Source: Eurostat
Note: Short = 1 to 3 nightsLong = 4 nights or more
Romanians spend on average almost 6x
more per one trip abroad (~EUR 411) than
within the home country (~EUR 70);
Bulgarians, however, spend more money
than Romanians both at home and
abroad; this is pretty odd, considering
that the average wage in Bulgaria is more
than 20% lower than in Romania.
Romanians prefer longer holiday trips,
while most of the selected countries tend
to go on short trips; despite the
propensity towards short trips for anumber of countries in the group,
spending per trip seems to be less
influenced by this factor; most likely,
service quality is responsible for the
overall cost of the trip.
0
10
20
30
40
50
60
70
80
90
100
HU BG CZ HR PL RO AT SK
0
10
20
30
40
50
60
70
80
90
100
Short holiday Long holiday
RO
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0
10
20
30
40
50
60
70
80
90
100
AT HU PL CZ SK RO BG HR
Land Air Sea
RO BG CZ HU AT PL RO SK HR
0
10
20
30
40
50
60
70
80
90
100
Private & hired veh. Bus & CoachRailway Other
RO
Land transportation bedrock of tourism industry in the region
Domestic trips
Source: Eurostat
Land transportation
0
10
20
30
40
50
60
70
80
90
100
HR RO CZ HU BG SK PL AT
Land Air Sea
RO BG CZ HU AT PL RO SK HR
0
10
20
30
40
50
60
70
80
90
100
Private & hired veh. Bus & CoachRailway Other
RO
Trips abroad Land transportation
Land transportation prevails among
domestic trips, while private and hired
vehicles are at the bottom of land
transportation across all countries in the
region; private & hired vehicles are more
convenient and usually involve lower
travelling costs.
Air transportation is much more visible
as far as outbound trips are concerned;
however, land transportation continues to
have the upper hand in the case of
outbound trips; unlike domestic trips,
bus & coach transportation are more
frequently used when travelling abroad.
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14
0
2
4
6
8
10
12
14
16
18
20
22
AT HR HU CZ SK BG PL RO HU CZ AT PL SK HR RO BG
0
250
500
750
1000
1250
1500
1750
2000
2250
RO RO
0
1
2
3
4
5
6
7
8
9
10
PL HR HU RO AT SK BG CZ AT CZ PL SK HU HR BG RO
0
200
400
600
800
1000
1200
1400
1600
1800
RO RO
tsd
Source: Eurostat
No. of airports Trips/airport
Ailing infrastructure holds down tourism industry in Romania
Highways (Km/1000 sq Km) Roads (Km/1000 sq Km)
Source: Eurostat
Not only are highways rare in Romania,
but the poor road quality is also a major
obstacle for tourism, especially as
tourism relies heavily on landtransportation; major investments in
infrastructure are needed to see the first
results in tourism.
Airport coverage is good in Romania and
this is perhaps the only asset the country
should draw more heavily on; in many
cases, quality of airport services fall
short of the mark and this, combined with
clapped-out road infrastructure, is putting
up barriers to tourism in Romania.
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Type of employment
Source: Eurostat
Full-time employees at heart of tourism industry in Romania
Structure of employment
0
10
20
30
40
50
60
70
80
90
100
RO HR BG SK CZ HU PL AT
0
10
20
30
40
50
60
70
80
90
100
Full-time Part-time
RO
Source: Eurostat
Employees make up more than 95% of
total employment in Romania, while in
the rest of the countries, self-employed
persons are more visible (10-18%);
particular interest should be paid to
developing extra-seasonal activities in
Romania, considering the high rate of
employees and relatively short summer
season.
0
10
20
30
40
50
60
70
80
90
100
RO BG HU PL SK AT HR CZ
0
10
20
30
40
50
60
70
80
90
100
Employees Self-employed persons
RO
Generally, the split between full-time and
part-time reflects the overall employment
in the economy; Romania, Croatia and
Bulgaria are on the top end of the full-
time range, while Austria, with more than
30% part-time employment, demonstrates
greater labor force flexibility.
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1
2
3
4
5
6
7
RO PL CZ HU SK BG HR AT BG RO SK PL HU CZ HR AT
% of total
0
200
400
600
800
1,000
1,2001,400
1,600
1,800
2,000
2,200
2,400EUR/month
RO RO
Education in tourism across region
Source: Eurostat
Tourism employment in Romania well below EU average
Employment in tourism Compensation in tourism
0
10
20
3040
50
60
70
80
90
100
BG PL HU HR AT SK CZ RO
0
10
20
3040
50
60
70
80
90
100
Tertiary education Secondary education Primary education
RO
Secondary education is front and center
in the tourism industry; Romania,
however, follows a slightly different
pattern than most of the countries underreview, with primary and secondary
education accounting for more than 85%
of the total (the average stands at 80%).
Tourism employment (hotels and
restaurants) holds around 1.8% of the
total economy in Romania, which is wellbelow the EU average (~4%); Romania
and Bulgaria display the lowest monthly
compensation paid to workers, while
Croatians are almost 3x better paid.
Source: Eurostat
Average
Average.
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17
Source: Eurostat
Average seniority with same employer
0
10
20
30
40
5060
70
80
90
100
PL SK CZ HU RO AT BG HR
0
10
20
30
40
5060
70
80
90
100
15-34 35-54 55+
RO
Source: Eurostat
Employment by age
Unlike EU, permanent jobs in tourism are commonplace inRomania
0
2
4
6
8
10
12
14
RO HU CZ SK BG PL HR AT BG RO HU CZ SK PL AT HR
months
0
2
4
6
8
10
12
14
16yearsLess than 2 years 2 years or over
RO RO
On the EU level, the tourism sector is
less stable than the rest of the market in
terms of the nature of the job
(permanent/temporary); Romania standsout with a permanent job rate in tourism
of ~94%, well above the EU average
(73%); in Bulgaria, permanent jobs
account for only 76%.
Tourism usually offers opportunities for
young people; the workforce aged 15-34
account for around 47% of total tourismemployment in Romania, slightly above
the EU level; the top end group (55+),
however, has a much lower share and
this holds true for all of the countries in
the panel.
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18
Accommodation infrastructure significant room forimprovement in Romania
No. of establishmentsfor every 10tsd inhabitants Type of accommodationestablishment
Source: Eurostat
0
2
4
6
8
10
12
14
AT CZ SK HR HU BG RO PL RO BG HU AT CZ SK HR PL
0
10
20
30
4050
60
70
80
90
100
Hotels Other collective establ.
//
22
24
26
RO RO
Source: Eurostat
No. of beds per hotel and other collective establishments
0
50
100
150
200
250
300
HR BG HU PL CZ SK RO AT HR HU RO PL BG CZ SK AT
0
50
100
150
200
250
300
AverageAverage
RO RO
Hotels Other collective establishments
Density of tourism establishments is
almost 11 times lower in Romania than in
Austria, which means that there is
enough room for improvement in termsof accommodation capacity; hotels are
predominant in Romania, holding around
90% of total tourism establishments.
Big hotels are commonplace in Croatia
and Bulgaria, where the number of beds
per unit is well above the average of the
group countries; for other collective
establishments (holiday dwellings with
limited hotel service, camp-sites, hostels,
etc.), the number of beds is higher than in
the case of hotels.
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19
0
2
4
6
8
10
12
14
AT HR CZ BG SK HU PL RO
0
2
4
6
8
10
12
14
Average 2006-2010
RO
0
10
20
30
40
50
60
70
80
90
100
AT
HR
CZ
PL
RO
HU
SK
BG
HR
AT
BG
RO
CZ
HU
PL
SK
AT
CZ
PL
SK
HU
RO
BG
HR
0
10
20
30
40
50
60
70
80
90
100Total (monthly average) July-August December-January
RO
RO
RO
Source: Eurostat
Net occupancy rates - % (NOR)
Note: NOR of bed places/month = overnight stays/(bed
places x no. of days when bed places are available for use
Tourism intensity (tourism nights/inhabitant)
Source: Eurostat
Romania should make most of its key strengths in tourism
Although Croatia and Bulgaria sit pretty
during the peak season (July-August) in
terms of net occupancy rates, Romania
comes in fifth overall, which reflects the
countrys bigger potential for tourism
activity (compared with Bulgaria) in other
periods of the year.
Except for Austria, Croatia and the Czech
Republic, tourism intensity in the rest of
the countries is well below the average; a
highly diverse natural landscape
combined with historical sightseeing and
specialized tourism (healthcare, fishing,
hunting) could be key ingredients for
pushing Romanian tourism one step
further.
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20
100
105
110
115
120
125
130
135
140
RO HR BG PL SK HU CZ AT
100
105
110
115
120
125
130
135
140
Package holiday and accomodation CPI
RO
Accommodation prices in Romania rose significantly in lastfive years
Source: Eurostat
Share of accommodation services in CPI basket
0
2
4
6
8
10
12
14
16
AT CZ BG HR HU RO SK PL
0
2
4
6
8
10
12
14
16100
98
.
.
100
RO
98
/ / / /
.
.
Source: Eurostat
Price development
The share of accommodation prices
within the consumer basket varies across
the map; Romania is third to last in this
ranking with a share of only 0.9%,
according to Eurostat, while Bulgarias
propensity towards accommodation
services stands at 2.1%.
Romania has seen the quickest increase
in accommodation prices over the last
five years; transportation fees and food
prices, significantly impacted by a
substantial FX pass-through, stood
behind the less favorable trend seen in
accommodation prices in our country.
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21
2,528467Other resorts*
280230Mountain resorts
6,993258Seaside resorts8122,169Capital
10,6133,124Total (tsd)
BGRO
71 mm64 mmPeak summer months**
472 mm396 mmYearly quantity
Precipitation
17C18 C-min.
27 C26 C-max.
Peak summer months:**
13.4 C13.2 CAnnual average
Temperature
VarnaConstanta
Note: *Other resorts are places withattractive characteristics (e.g. climate,cultural or historical monuments, etc.),riverside and lakeside areas, healthspas and other places that cannot beclassified into any of the above-mentioned resorts.
Note: ** July and August
Nights spent by foreign tourists by type of destination Weather conditions
Romania vs Bulgaria: foreign tourists preference for visitingBulgaria is not influenced by climate conditions
0/-2C-3/-5
CWinter season
21 C22-24 CSummer season
BGROAir temperature
Weather conditions at seaside
Romania and Bulgaria are two countries withsimilar weather condition; the higher number of
foreign tourists seen in Bulgaria compared to
those in Romania was not influenced by climate
conditions.
Source: weather.com
Source: NIS Romaniaand NSI Bulgaria
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22
0
10
20
30
40
50
60
70
80
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Romania Bulgaria
FDIs (stock)/capita - EUR Grossincome /capita - EUR (2006-2010)
7 times more 7 times more
FDIs and income
Romania vs. Bulgaria: 7 times less FDIs/capita in Romania, 7times less gross income from tourism/capita
Source: Eurostat
With average GDP/capita that is 1.3 times
lower than Romania, Bulgaria manages to
earn seven times more per capita from
tourism activity than Romania.
If weather conditions are similar in both countries, while the natural landscape tips the scale
in favor of Romania, then what sets Bulgarian tourism apart from Romanias?
In nominal terms, income from tourism in
Bulgaria amounted to almost EUR 13bn
during 2006-2010m (Romania x 2.4).
Earlier and quality privatizations in tourism top foreign investors;
Better transfer of know-how and more efficient advertising;
Higher FDI inflows and better absorption of tourism-related EU funds;
Arrivals at Bulgarian tourist facilities are 1.5 times higher than in Romania.
Winning combination between tour operators and foreign investors;
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23
Areas that should be further improved
Source: World Economic Forum
Index 2011 Air transportinfrastructure
Ground transportinfrastructure
Tourisminfrastructure
Affinity for
travel &tourism
Naturalresources
Culturalresources
1. Switzerland 1. Canada 1. Hong Kong SAR 1. Austria
Cyprus
Italy
1. Lebanon 1. Brazil 1. Sweden
. . . . . . .
. . . . . .
. . . 6. Bulgaria . . .
. . . . . .
. . . . . .. . . . . . 37. Bulgaria
. . . 38. Romania . . .
. . . . . . .
. . . . . . .
. . . . . . 41. Romania
. . . . . . .
. . . . . . .
48. Bulgaria . . . . . .
. . . . . . .
. . . . 51. Bulgaria . .
. . . . . . .
. . . . . . .
63. Romania . . . . . .
. . . . . 78. Bulgaria .
. . . . . . .
. . . . . . .
. 81. Romania . . . . .
. . . . . . .
. 89. Bulgaria . . . .
. . 90. Bulgaria . . . .
. . . . . . .
. . . . . 94. Romania .
. . . . 95. Romania . .
. . . . . . .
. . 101. Romania . . . .
. . . . . . .
. . . . . . .
139. Chad 139.Lesotho 138. Paraguay 139. Rwanda 139. Angola 139. Lebanon 139. Timor Leste
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