Bucharest, Romania – Along the route to MediaPro Studios, packs of feral dogs wander unpaved streets, children as young as 7 beg for handouts, and some government buildings still bear the bullet scars of the 1989 revolution. But for a growing cadre of Hollywood producers, the drive is becoming as familiar as a trip to the Universal Studios back lot.

Almost everywhere you look, Romania is an impoverished country, where the average gross monthly salary is $339 and horse-drawn carts pass as affordable transportation. Although economists see a struggling nation, movie producers see an opportunity.

And when the film business began offering steady employment with the promise of good money, onetime medical student Ionut Lupulescu was just one of many who signed on.

Lupulescu’s summer job as a low-level video assistant on 2003’s “Cold Mountain” turned into a full-time career that paid him $11,000 in 2004. Earlier this year the 24-year-old was at work on “Catacombs,” a low-budget thriller put together by Los Angeles’ Twisted Pictures, which found the economics of the Romanian movie industry equally seductive. By traveling 6,500 miles, producer Greg Hoffman of Twisted Pictures was able to fill two sound stages with tunnels so intricate that even the “Catacombs” construction crew – a few dozen carpenters eager to work for $20 a day – would get lost in them.

Those tunnels are visible testament to a profound and seemingly irreversible shift in the American movie business. The film industry has increasingly become a gypsy caravan with producers scouring the globe in search of countries with sufficient infrastructure to accommodate movie crews yet undeveloped enough to offer Third World wages.

Until just a few years back, Hollywood’s flight to distant lands was a modest exodus at most. In 1990, a mere 44 American movies were filmed in foreign lands for economic savings. By the end of the decade, the figure had more than doubled, and now production abroad has become a way of life. In one recent week, 20th Century Fox films were in various stages of production in the Czech Republic, Canada, Hungary, Morocco, the Dominican Republic, France and Britain.

For the big studios, making movies overseas is no different than Nike’s stitching shoes in Vietnam.

As long as the finished product looks the same, it doesn’t really matter where the goods were manufactured, which is part of Romania’s appeal.

The watershed moment in Hollywood’s march east came with “Cold Mountain,” a Civil War story set in the hills of North Carolina and filmed in Romania. It was the first major mainstream American movie to be shot here.

“Without the savings that Romania offered, ‘Cold Mountain’ absolutely would not have gotten made,” said producer Albert Berger, who estimates that the country’s affordable labor trimmed more than $20 million from the film’s budget, which Berger says would have exceeded $100 million had the movie been shot entirely in the United States.

Since then, scores of low-budget films along the lines of “Seed of Chucky” have followed, taking advantage of Romania’s cut-rate workforce, pristine rural landscapes, Paris-like cityscapes and an almost endless pool of Caucasian extras who blend easily into the background of Hollywood’s still very white movie world.

Romania is proving such a great value that Canada, once the top money-saving film destination, is feeling the squeeze. One Canadian producer recently abandoned his home province of British Columbia to shoot the fantasy-horror story “Bloodrayne” in Bucharest.

But moviemakers are already looking beyond Romania. “The Hills Have Eyes” is set in the southwestern United States, but Fox Searchlight is shooting the thriller in Morocco.

Despite fears of terrorism there, the North African nation’s varied locations and fledgling production network could soon challenge Romania for bargain-basement moviemaking costs – until China or Turkey comes along.

Although the local economic impact of Hollywood’s overseas outsourcing has been blunted by a surge in Los Angeles television production, particularly of reality shows, the effects are unmistakable: American stories such as “Superman Returns” (filmed in Australia), “The Black Dahlia” (filmed mostly in Bulgaria) and “Ask the Dust” (South Africa) are being made far from the country in which they are set and the cities in which they are funded, marketed and distributed.

In the wake of Hollywood’s globe trotting, California families have learned to cope with months of separation as one parent packs up for an overseas production and the other takes care of things at home. Others are less fortunate and don’t get work at all: Southern California show business unions complain that overseas productions are decimating the industry’s rank and file.

Against that backdrop, most states in the U.S. have tried – and occasionally succeeded in – competing.

Before Hurricane Katrina hit, Louisiana used aggressive financial incentives to lure all sorts of productions to the state, from big-budget comedies to cheap slasher flicks. Now virtually every state has a film commission and increasingly lucrative tax incentives.

To combat the erosion of filmmaking in California, Assembly Speaker Fabian Nuñez (D-Los Angeles) recently introduced a bill giving up to $100 million a year in tax breaks to producers who remain in California. But its fate is very much up in the air, with some Republican legislators and public interest advocates already lining up to oppose the plan.

Although U.S. filmmakers and studio executives are loath to say it aloud, another advantage of exporting film production is that the unions and watchdog groups don’t make the trip with them. The work environment encountered overseas is often unsafe and unregulated – conditions that test the politics of an industry long concerned with the plight of working-class Americans.

It’s not unusual for stages to be filled with choking paint fumes, and workers dangle on ropes to do repairs in the rafters. Everyone, it seems, smokes.

Darren McLean, a gaffer on “Bloodrayne,” tells of Romanian electricians hanging ungrounded, poorly secured lights above a water tank with actors in it – arguably more chilling that the vampire tale being filmed. “They didn’t have any [ground fault interrupters] in the country, so I had to go get them,” McLean said. “I went back on the next day to retie all of their knots.” American union rules often guarantee overtime wages after eight hours in a day, but Romanian crews usually don’t collect extra pay until they’ve topped 72 hours in a week. Producers say even those Romanian overtime rules are flexible.

“You’ll be amazed how far your money will go,” said Richard Wright, an executive at Lakeshore Entertainment, which made this past summer’s “The Cave” in Romania. Wright estimates Romanian labor can run at least 80% cheaper than American labor.

A movie filming in Los Angeles could pay a driver as much as $470 a day; that same person in Bucharest might be given a daily rate as low as $9.52.

“We were told, somewhat to our amazement, that the livestock, sadly, would cost more” than $16-a-day extras, said Guy Louthan, who produced “Method” and “Seed of Chucky” in Romania.

Andrei Boncea, general director of Bucharest’s MediaPro Pictures, says paying someone $1.50 an hour is “not against the law here.” Which raises the question: Are Hollywood producers exploiting foreign labor, or are they agents of economic development? Romanian workers suggest it’s the latter.

Indeed, the infusion of cash and the nearly constant demand for workers has created an increasingly skilled talent pool that has come to rely on Hollywood’s presence.

Since he started on “Cold Mountain,” Lupulescu hasn’t been out of a job. In contrast, people in Los Angeles at the top of their trades can go months – and sometimes years – without steady work.

Gabriela Cretan, 26, was studying in Bucharest to become an economics director before leaving school to become a makeup artist. The opportunities were such that Cretan, who has since started her own makeup company, persuaded her brother to become a camera assistant.

“We had a lot of fights with our parents about dropping out of university. But what I now earn in a week, my mother, who designs and sells clothes, earns in a month,” Cretan said after touching up the bloodied face of “Catacombs” star Shannyn Sossamon.

Cretan’s “Catacombs” assignment put $550 a week in her bank account. “Once my mom saw that,” Cretan said, “she stopped complaining.”

“If the pioneers of the Internet were porn sites, the pioneers of places like this are low-budget horror, where it’s all about getting it better, faster and cheaper,” said “Catacombs” producer Hoffman.

In the early 1990s, prolific B-movie producer Charles Band picked some land 30 minutes outside of Bucharest where he built a small stage to film ultra low-budget fare such as “Bloodlust: Subspecies III” and “Trancers 5: Sudden Deth.”

Government officials were eager to accept bribes, equipment was lacking, and the crews were untrained.

“We were seen as an uncivilized country; the U.S. crews would bring their own toilet paper,” said Bogdan Moncea, the vice president of marketing for Castel Film Studios, the now well-appointed and full-service studio that Band’s single sound stage grew to become.

“It was really hard to make movies here.”

In addition to the six modern stages at Castel, nine stages are now open at MediaPro, which had been the production hub for propaganda movies under Nicolae Ceaucescu, the dictator who ruled the country from 1965 to his violent ouster in 1989.

Romania’s blue-collar savings, though, come with their own brand of logistical headaches. It can take nearly a day to travel from Los Angeles, because there are no direct flights from the United States to Bucharest. Some equipment as basic as scaffolding clamps might be unavailable; items shipped in may be tied up in customs. The “Cold Mountain” production had to import luxury trailers from England to accommodate its A-list stars. A few producers specifically budget money for payoffs.

“Lord of the Rings” actor Andy Serkis said that while walking around Bucharest in 2003 during production of “Blessed,” a man approached him asking directions. As soon as Serkis replied, police surrounded the terrified actor, convinced he was illegally changing money.

“It’s not without its hiccups,” Lakeshore’s Wright said. “You don’t go in expecting things to always work smoothly, but Romanians are geniuses at what we might consider to be jury-rigged solutions. The power plant might be held together by paper clips and bubble gum, but it works.”

When Romania joins the European Union (an entry scheduled for 2007), its labor will no longer be as affordable as it is now. Producers looking for cheap muscle will likely travel to Morocco, Bulgaria, Turkey, India and, perhaps, China, reaching further and further for better deals.

Romania will then in all probability resemble the Czech Republic, a former hotbed of production that is now losing business to other Eastern European countries because its costs have climbed.

“I hope we can work for another three years,” said makeup artist Cretan. “And then they are going to go where the cheapest location is.”‘We had a lot of fights with our parents about dropping out of university.

But what I now earn in a week, my mother, who designs and sells clothes, earns in a month.’

Gabriela Cretan, makeup artist, on the set of the movie “Catacombs” in Bucharest, Romania, where she was earning $550 a week.