ECO-BUS WEEKLY DIGEST July 29-August 4. Most important Economy & Business news by IPN

● MONDAY, July 29

Restoration of 20% VAT for hospitality industry will annihilate benefits gained so far, opinion

Aneta Zasavitski, president of the National Association of Restaurants and Recreational Places, said the replacement of the VAT rate of 20% with the current rate of 10% in the hospitality industry by the Filip Government last year contributed to greater transparency in the sector, to an increase in the number of official employments and of legally issued sales slips. If the VAT rate of 20% is restored, all the benefits gained so far will disappear. In the program “Reply” on Prime TV channel, Aneta Zasavitski said the official employments earlier represented 30%, but now rose to 70%, while the sales slip issuing level increased from 40% to 90%. “The regeneration of companies is at a rather good level. The restoration of the VAT rate of 20% will lead to the disappearance of all these benefits,” she stated, noting the fact that no consultations were held with the businesses operating in the sector generated disagreement and public discussions were proposed only after all the business associations started to publish letters, to issue statements and to warn the Government.

New outbreaks of African swine fever

An outbreak of African swine fever was confirmed and 92 pigs were slaughtered in Rosu village, Cahul district. Seven animals were found dead by the farm owner. Another outbreak was recorded in Mileşti village, Nisporeni district, with one pig affected. Vitalie Carauş, head of the National Food Safety Agency, told the slaughtered pigs were buried. The pens and all utensils that came in contact with the animals were disinfected. In both villages there a census of animals is under way for more accurate records.

● TUESDAY, July 30

FAO provides assistance in promoting agrifood products

Stronger, more efficient promotion of agrifood products and new methodologies and indicators in agriculture and rural statistics are among the positive changes expected during the implementation of two new FAO projects in Republic of Moldova. The project agreements were signed in Chisinau by Raimund Jehle, the FAO Representative in Republic of Moldova, and Georgeta Mincu, the country’s Minister of Agriculture, Regional Development and Environment, on July 29, quoting a press release of FAO in Moldova. The projects, which will be implemented during the next two years, are expected to contribute to increases in agrifood exports and access to reliable statistical data for policy formulation and implementation. Among the activities set to boost agrifood promotion are the development of a web portal, a study evaluating trade barriers for products with the biggest export potential, and a program for identifying and promoting Moldovan traditional products and developing national promotional materials on rural tourism and food heritage.

High-profile privatization contracts will be made public

The privatisation contracts for Tutun CTC and Air Moldova, and the concession deal for the Chisinau Airport will be made public, announced MP Igor Munteanu. Munteanu, who chairs a parliamentary inquiry commission set up to look at the deals, told a press briefing that that decision to release the contracts was taken following consultations with theMinistry of Justice and private lawyers.

● WEDNESDAY, July 31

Initiators of small businesses face bureaucracy and corruption, press club

The persons who want to start a small business in Moldova often face bureaucracy and corruption at the very first stage and do not have access to financing, said representatives of the Alliance of Small and Medium-Sized Enterprises of Moldova that was founded almost four years ago by an American citizen who came to Chisinau to start a business. In his intention to open a public place in Chisinau, he met with different bureaucratic procedures and a regulatory framework that was rather unclear for an entrepreneur. The process of obtaining permissive documents turned out to be difficult. Communicating with other entrepreneurs, he decided to create the alliance that now promotes advocacy, encouragement and protection initiatives intended for SMEs. In a meeting of the Economic Press Club, the alliance’s executive director Liliana Busuioc said the Alliance of Small and Medium-Sized Enterprises of Moldova is an employers association that represents more than 50 SMEs working based on principles of transparency and integrity. The alliance focuses on a number of areas, such as development of a business community for persons who want to become members of the associative culture, to be pro-active and to become involved in changing things in the country as regards the regulation of the business climate.

Swine fever also reported in Crihana Veche

An outbreak of African swine fever has been confirmed in a private household, with 20 animals, in Crihana Veche village, Cahul district. The pigs were slaughtered and buried. On the outskirts of Burlăceni village, the same district, there were found the carcasses of two pigs affected by the fever. The National Food Safety Agency reports that in Crihana Veche village disinfection was carried out in the pen where the animals were kept, and a census of domestic pigs is conducted in the given localities in addition to wildlife control efforts. At the same time, the police are looking for the owners of the pigs found near Burlăceni village.

Central bank raises base rate by 0.5 points

The board of the National Bank of Moldova (BNM) today unanimously decided to raise the base rate on all short-term operations by 0.5 percentage point to 7.5% annually, in an attempt to curb inflation amid a persistent growth of aggregate demand. BNM explained in a press release that the growing aggregate demand is due to higher salaries, pensions and other earnings and a rise in consumer loans reported in the first half of 2019.

● THURSDAY, August 1

Money for new embassies to be redirected

The funds budgeted for the opening of three new embassies of Moldova – in Ghana, Argentina and India – will be redirected for other expenses, under a State Budget correction amendment approved by Parliament in the first reading today. The measure cuts the expenses for the Ministry of Foreign Affairs and European Integration by a total by 22.7 million lei, including 11.7 million lei initially planned for setting up the embassies. Minister of Finance Natalia Gavrilița told Parliament’s plenary sitting that each authority had been asked to present proposals for reducing or increasing expenditure, depending on the budget implementation in the first six months and the new priorities.

Parliament freezes citizenship by investment scheme

Parliament has voted to declare a moratorium on the Moldovan Citizenship by Investment Program. In particular, no new applications under the program will be accepted for a period of four months, with a potential extension of up to two more months. Applications submitted until the entry into force of this law will be further processed. The Moldovan Citizenship by Investment Program was adopted by Parliament in November last year. Under the program, foreigners may acquire Moldovan citizenship by investing a minimum of 100,000 euros into a fund for sustainable development projects. So far, two applicants have become citizens, one from Australia and another one from India. There are currently 34 applications under examination.

EU finances cooperation projects among NGOs from both banks of Nistru river

Non-profit organizations from both the left and right side of the Nistru River are invited to apply for financial support/grants from European Union for projects that aim to create or consolidate cooperation platforms among business associations and NGOs from both sides of the Nistru. The maximum grant amount is 25,000 euros. The implementation period of the projects is October 2019 – October 2021. Information meetings for applicants will be held on August 5 in Chisinau, and on August 6 in Tiraspol. The Applicant’s Guide and the Application Form are accessible at UNDP Moldova web page. The deadline for submitting project proposals is 28 August 2019, 4:00 pm local time.

Repairs and upgrades on several road sectors

The rehabilitation, modernization and extension of some segments of national roads will be declared of national interest. The selected segments are located on important international and national routes. Here is a full list: M1 Border with Romania - Leușeni - Chișinău - Dubăsari - border with Ukraine (km 85 - km 104); R1 Chișinău - Ungheni - border with Romania (km 103 - km 104); R6 Chișinău - Orhei - Bălți (km 99 - km 112); R14, R6 Codrul Nou - Soroca - Ungheni - border with Ukraine (km 123 - km 132); R26 Bender - Căușeni - Cimișlia (km 71 - km 86). The purpose of declaring the works to be of national interest is to speed up the allocation of the land necessary for the extension of roads. The expropriation will be made in accordance with the legal provisions.

● FRIDAY, August 2

Natalia Gavrilița: Tax exemptions for hospitality industry and meal vouchers were inappropriate

The institution of tax exemptions for the hospitality industry and the provision of meal vouchers were measures aimed at encouraging consumption, but they were inappropriate from economic viewpoint, Minister of Finance Natalia Gavrilița was quoted by IPN as saying in a meeting of the Economic Press Club on August 1, IPN reports. The minister noted that if the program with the International Monetary Fund hadn’t been resumed, the state would have had problems with the financing of the budget deficit as the EU wouldn’t have provided financial support. “The resumption of the program with the IMF for obtaining EU budget support, which would ensure the stability of the 2019 budget, was the top priority. We asked the Government of Romania to provide a loan and will finance the deficit also with new financing resources,” stated Natalia Gavrilița.

Fewer money transfers from abroad

In the second quarter of this year, bank transfers of cash from abroad in favor of individuals amounted to $313.47 million. About 83% of the transfers were made through systems that don’t require opening bank accounts. According to a press release from the National Bank, the recalculated dollar value of second quarter transfers decreased by 8.5 percent compared to the same period last year. The exchange rate fluctuations of the original currencies against the dollar were responsible for a 3.4 percentage point decrease in the value of the transfers. Most transfers were in euros ($ 174.95 million), followed by those in dollars ($ 123.26 million), Russian rubles ($ 12.05 million) and other currencies ($ 3.21 million of dollars).

Grain harvest is comparable to last five years’ average

Wheat was harvested from almost 350,000 hectares or 98% of the total sown area. The total harvest constitutes 1.13 million tonnes. According to an informative note from the Ministry of Agriculture, Regional Development and Environment, the yield was around 3.3 tonnes per hectare, which is comparable to the averages of the last five years. Barley was harvested on 61,000 hectares, yielding a total 181,000 tonnes on both autumn and spring varieties. The average yield was of 3.1 t/ha for autumn barley and 2.7 t/ha for spring barley.

● SATURDAY, August 3

Credit facilities for young people: about 55 million lei issued in half a year

The program "Youth Credit Facilities", launched at the initiative of the Ministry of Finance, already has 87 beneficiaries and has expanded into 22 districts. The amount of loans granted to young entrepreneurs is 54.9 million lei, after the first six months of activity. Most of the loans were offered to young entrepreneurs from ATU Găgăuzia, Chisinau municipality and Râșcani district. The amount of the loans granted to young people from ATU Gagauzia is 15.6 million lei and 3.8 million lei each for youth form Chisinau municipality and Râșcani district.

Bill to be proposed to break up Metalferos monopoly

The Ministry of Economy and Infrastructure is preparing a draft law that seeks to break up the monopoly set up by Metalferos. According to Prime Minister Maia Sandu, this is needed because “the fraudulent schemes employed have been too many and too sophisticated.” Speaking in a talk show on TV8, Maia Sandu said that it was discussed how the state-owned Metalferos became a monopoly: “The pretext used by the previous governments was that good metal was being stolen and sold as scrap metal.” In her opinion, the fastest solution is to break up the monopoly of this company. Maia Sandu said that internal investigations are being conducted in state-owned enterprises.