The Republic of Moldova experiences multiple shortcomings in ensuring integrity at state level and this is due to the fact that the current legislation explains the political property-related reasons in too general terms, shows a study entitled “Sector of state-owned companies: corruption risks and necessary reforms” that was produced by the independent think tank “Expert-Grup” with the support of the National Endowment for Democracy (NED), IPN reports.
A shortcoming is also the fact that the specific expectations of state-owned companies haven’t been formulated. The institutions of the central public administration, which are empowered to work out policies, are directly involved in the management of state-owned companies. The quality of owner is not concentrated in one institution, being divided, and is held together with authorities of the central public administration. The boards consist exclusively of public functionaries who perceive the appointment to the board as a financial stimulus, study author Vitalie Rapcea stated in the presentation of the study.
“There are no procedures related to the method of selection, appointment, assessment and dismissal of members of the Administration Board. The boards do not include independent members and the current legislation does not ensure the independence of these boards. There is no direct connection between the remuneration of the manager and the long-term objectives. The operational freedom of the executive body of the state-owned companies is extremely limited, while the manager is named by the founder,” stated Vitalie Rapcea.
“Expert-Grup” executive director Adrian Lupușor said that after 30 years, the sector of state-owned companies remains encompassed by multiple obscure interests and problems. “The current government assumed a series of reforms that were also stipulated in the memorandum with the International Monetary Fund. We also saw the opinion of the European Commission that clearly says that the reform of the state-owned enterprises is one of the main conditions for opening EU accession negotiations,” stated Adrian Lupușor.
Minister of Economy Sergiu Gaibu said that a good reform of the state-owned enterprises is necessary and privatization is necessary indeed. There are companies that are fundamental for particular strategic aspects. For example, a pharmaceutical company had the capacity to store vaccines during the COVID-19 pandemic. The government is yet to learn a lot to ensure proper management of commercial organizations and public institutions. The privatization procedures should involve not only portfolio investors, but de also professional investors that know how to organize those sectors and that would bring know-how, modern technologies and functional mechanisms.
Tatiana Savva, vice director of the Public Property Agency, said that few reports with valid data about the situation of state-owned enterprises and joint stock companies existed the past 30 years. “We speak about privatization and the fact that the state is a bad manager of the public sector. Indeed, the private sector has more instruments and more freedom to manage goods, to bring value added. This does not yet mean that if there are good and well-paid managers in the state sector and these are interested in developing these enterprises, they do not achieve results. The glass factory sustained losses the last few years, but the new manager during only a year ensured profit and covered the losses. There are also less efficient state-owned enterprises,” stated Tatiana Savva.
Statistics show that the state-owned companies in 2020 contributed 15% to the GDP, a 6% decline over the last decade. In 2020, these companies employed 10.5% of all the salary earners of companies. The central public administration and the local public authorities are entitled to found state-run companies.
