ECO-BUS WEEKLY DIGEST October 21-27. Most important Economy & Business news by IPN

● TUESDAY, October 22

Financial stability of Moldova, discussed at IMF and World Bank Group meeting

Topics related to the financial stability of the Republic of Moldova were discussed by the country's delegation, which participated in the annual meetings of the International Monetary Fund (IMF) and the World Bank Group, held in Washington, on October 14-20, 2019. The delegation included the Minister of Finance, Natalia Gavriliță, the Minister of Economy and Infrastructure, Vadim Brînzan, and the Governor of the National Bank of Moldova, Octavian Armașu. Moldovan officials discussed with high-level representatives of the IMF and the World Bank the implementation of the program with the International Monetary Fund, the transformations that benefit the economy and the financial-banking sector of the Republic of Moldova. Also, there were meetings with economists and experts of the US Treasury, with top-level technocrats of the European Union, with representatives of large investment funds and of international banks.

Process of issuing the special transport permit, evaluated with the support of USAID

The process of issuing the special transport authorizations in the regulated form is not centred on the needs of the economic operators, because it is not possible to get this permit in a short time span. It is also impossible to claim a refund of the amounts paid in case of non-use of the special transport permit, as well as an exemption from fees in the case of natural disasters. Another problem is the impossibility of paying the tariff through international bank transfers. These are some of the findings of a study on the conditions of the process of issuing the special transport authorization, carried out by the USAID Structural Reforms Program in Moldova and presented on Tuesday, October 22, in Chisinau. The study noted the long examination span for the requests concerning special transport authorizations, which is five to eight days. As compared to other countries, for example, in Estonia this term is of three days in the standard formula, and eight hours in emergency regime, while in the UK, the authorization is issued right away.

Demand and supply of currency on foreign exchange market in September

In September, the coverage degree of net currency demand by economic agents through the net foreign currency offer from natural persons constituted 99.9%, compared with 106.8%, in August 2019. According to the National Bank of Moldova data, the net supply of foreign currency from individuals decreased by 36.2 million dollars (-16.3%), compared to the previous month, while the net demand for foreign currency from economic agents decreased by 21.9 million dollars (-10.6%).

● WEDNESDAY, October 23

For 2020, salary increases are proposed for most budget employees

The draft law on the 2020 budget envisages a salary increase between 6 and 10% for the majority of the employees of state institutions. At the same time, for some categories of budget employees, the remuneration could increase up to 1500-2000 lei per month. The proposals have been discussed during public consultations on the salary policy for 2020 and for medium term (2021-2022). The event was organized by the Ministry of Finance and brought together representatives of trade unions and central public authorities. During the consultations, the minister Natalia Gavrilița has announced that the draft provides for the correction of some pay inequalities for some categories of employees, including those in the local public administration, in the field of education, in the penitentiary institutions and in the field of defence, etc.

Agreement on mutual assistance in customs field to be signed with Finland

The Cabinet of Ministers approved the signing of the agreement with the government of Finland on mutual assistance and cooperation in the customs field. "The agreement will be a tool for strengthening the economic and commercial relations of the signatory states, through mutual assistance and cooperation between the customs administrations in the matter of preventing and combating customs violations, which can harm these relations", the bill's informative note said.

Draft law to support the business environment

Freelancers, such as those who work individually in the field of art, engineering, etc., and who are reluctant to enter into legality because of the high taxes and bureaucratic provisions, could work based on a unified and simplified tax regime. They would have to pay a single tax of 12%, to file an annual report, as well as to keep a register of accounting entries and exits, while those who have cash operations would have to purchase cash registers. These and other proposals have been put forward by MPs from PAS group, ACUM Bloc, who developed a draft law in this respect. At a press conference, MP Radu Marian specified that this draft had been developed as a result of discussions with representatives of the business environment and these measures were somehow facilitating their activity, because there were numerous systemic problems, bureaucracy, corruption. The authors of the draft propose to reduce the number of reports to be submitted by the Ltd companies, namely to present a unique report, as in the case of individual companies. This measure would benefit the newly founded Ltd companies for three years following their set up.

Average rate for loans granted in lei constituted 8.36% in September

In September, the average rate for new loans granted in national currency constituted 8.36%, while for those in foreign currency – 4.5%. The average rate of loans granted in national currency increased by 0.23 percentage points, compared to the previous month. Individuals were given loans with an average rate of 7.91%, while legal entities received loans with a 8.74% rate. According to National Bank of Moldova data, the average rate of loans granted in foreign currency decreased by 0.08 percentage points, compared to August 2019. Individuals were given loans with an average rate of 7.21%, while legal entities at a rate of 4.42%.

Smaller rewards for state representatives in companies

The government approved the modification of article 28 of the Regulation regarding state representatives in companies. The changes refer to the rewards they collect. The persons who represent the state in commercial companies benefit from monthly allowances and annual rewards established by the General Meeting of Shareholders.

● THURSDAY, October 24

Russia has refused to increase export permit quotas for Moldovan transporters

For 2019, Russia has established 15,000 export permits for Moldovan transporters, 3,000 permits fewer than in 2018. A statement from the Ministry of Economy and Infrastructure shows that, given the insufficient number of such authorizations, multiple requests were sent to the Russian side with a view to increase the quota, the majority being declined by them. "Only in August, the Russian side agreed to organize the meeting of the Moldovan-Russian Joint Commission on International Road Transport and, at the request for an additional quota of permits, mentioned that 80.8% of the bilateral transport operations are carried out by the Moldovan transporters, the share of Russian operators constituting only 9.3%”, the statement said.

Blue customs corridor implemented at customs

Validation procedure for customs declarations is applied on the customs control blue corridor. The blue corridor is the customs control corridor that allows granting customs clearances without carrying out documentary and physical checks, then allows to direct vehicle to the second customs control line. Therefore, the statements selected on the blue corridor are automatically validated, while being subject to subsequent checks. Customs declaration selection on the blue corridor allows economic agents to immediately dispose of their goods, which gives them a series of advantages, such as savings on stationary expenses, the reduction of the customs processing time and the diminished risk of exceeding the terms of goods delivery. At the same time, this mechanism contributes to the acceleration of the international circuit in order to facilitate the cross-border trade and allows the redirection of the institutional resources towards the second control line.

Infested fish do not pose danger if properly processed, ANSA talks

Infested fish do not pose danger to human health if properly processed, which implies that they should either be frozen for more than 24 hours at -18 degrees Celsius or thermally processed, for at least one minute, at +60 degrees Celsius. However, it is inadmissible for the infested fish, regardless of the degree of infestation, to be distributed in schools, preschools and other social institutions. Opinions in this regard were expressed during a meeting organized by the National Agency for Food Safety. Elena Malai, ANSA deputy director, said that following the verifications carried out by inspectors at social institutions, including schools, several irregularities were detected. Products are delivered and received in the absence of origin documents. Some products have incorrect labels, while the frozen fish has altered organoleptic indicators when thawed. Inspectors detected over 250 kg of infested fish, over 100 non-compliant food products and altered eggs. According to ANSA deputy director, the most affected fish is cod, herring and mackerel. Most of it comes from Spain, Norway and Ireland.

Natalia Gavrilița: The process of implementing investment projects to be perfected

The Republic of Moldova will improve the process of planning and implementing capital investment projects. The reform will aim to adjust the national legislation, but also to improve the mechanism of capitalization of investment resources. The minister of finance, Natalia Gavrilița, announced this during a meeting with a group of experts from the International Monetary Fund, that was on a working visit to Chisinau. According to Natalia Gavrilița, the economic development of the Republic of Moldova depends directly on investments in infrastructure. "In order to make sustainable investments in infrastructure, we must first of all have an efficient system of project selection and distribution of resources, based on very rigorous principles. The money that goes into investments must be used rationally, so as to contribute to the creation of a modern and quality infrastructure. It is also important to ensure transparency. People need to know what kind of infrastructure projects will be implemented, in order to be able to participate in monitoring their quality,” said Natalia Gavrilița, quoted in a press release of the Ministry of Finance.

Potato producers can apply for subsidies, minister

Potato producers can apply for subsidies from the National Agricultural Development Fund. The suggestion was made at the meeting regarding potato production and marketing by the Minister of Agriculture, Regional Development and Environment, Georgeta Mincu. "Farmers can apply for permits for potato production in protected land, for irrigation systems and equipment, for water pumping cost compensation and for partial compensation for insurance expenses", said Georgeta Mincu. According to the minister, it is important for potato producers to associate. "This fund promotes the association of producers. There is a need for land consolidation and for the creation of post-harvest infrastructure. Additioanlly, the development of rural infrastructure and the access to consulting and training services is necessary", said Georgeta Mincu.

● FRIDAY, October 25

Two candidates to take final test for the post of Customs Service director

Two candidates were admitted to the final test of the competition for the position of director of the Customs Service. After completing the review of the files, the Competition Committee has decided that for the next test - the interview, Natalia Calenic and Iurie Gorea will be admitted. "The professional skills of the candidates will be evaluated at the interview test. They will be examined by the Committee according to the order of submittal of applications for participation in the competition. We note that the interview test will be public”, the Ministry of Finance specified in a statement.

Over 46% of remittances received by Moldovans come from EU countries

Over 46% of the money transferred from abroad to individuals in the Republic of Moldova in September comes from the European Union countries. According to a statement of the National Bank of Moldova (BNM), 22% of remittances received by natural persons were transferred from the CIS countries, while 31.6% from other states. Of European Union member countries, the Moldovans received the highest remittances from Italy, Germany and the United Kingdom. Also, according to the BNM, the transfers from Israel are worth mentioning, constituting 18.4% of the total amount received from abroad by Moldovan individuals.

● SATURDAY, October 26

Keeping transport fares low threatens the sustainability of services, IPRE

Keeping fares for a long period at a very low level, in the absence of a sound financial situation, threatens the sustainability of the services. The long-term effect of the current policy will be to further reduce the quality of the service provided, as well as the number of public transportation units available to the inhabitants of the capital. The purpose of maintaining an affordable price for everyone can make the situation worse as some transport routes may disappear. And a possible financial crisis at the municipal level, under significant conditions as regards budget allocations, may affect the activity of Chisinau Electric Transport Administration (RTEC) and Urban Bus Park (PUA), according to an analysis of the Institute for European Policies and Reforms (IPRE) concerning the cost of public transport in Chisinau.