Alexandru Oleinic, managing co-chairman of the People’s Party of Moldova, considers that the country’s economic development model must be changed and such a necessity became obvious in time and was confirmed the suggestions formulated recently by the World Bank Country Director Abdoulaye Seck. They refer to the stability of the financial sector, macroeconomic stability and the switchover from remittances and imports to investments and exports.
According to the politician, the World Bank experts are permanently monitoring the state of affairs in the sectors of the national economy and assess the current situation. “In 2007-2008, when I was a member of the parliamentary commission on economy, budget and finance and took part in the examination and approval of the state budget for these years, I warned that the substitution of the economic development model based on production and experts by another one based on larger remittances and imports will lead to the destruction of the national economy. In that period and afterward, Moldova started to record the highest negative indexes of the balance of trade, the lowest flow of foreign direct investment and the poorest living standards,” said Alexandru Oleinic.
According to him, Moldova’s economy continues to be dependent on the remittances sent by Moldovans working abroad. “The net volume of remittances in 2000-2012 rose ten times, from US$178 million to US$1,700 million. This phenomenon of increased dependence of the economic growth on the volume and share of remittances in the GDP leads to the diminution of the flow of foreign direct investments and the substitution of the principle of obtaining incomes from economic activities with the principle of earning incomes from remittances. Thus, the remittances contribute to the appreciation of the national currency and the erosion of the competitiveness of the national products on the foreign markets and fuel inflationist pressure,” stated Alexandru Oleinic, adding that this vicious circle can be broken by a complex approach to all the mentioned problems.
“Political will is needed to accept the substitution of development model based on remittances and consumption by a model based on the development of productive, competitive and efficient companies that generate workplaces and incomes. The change of the model must include the reformation of the Government and the governmental institutions by fully switching over to the E-government model,” said the politician.
