ECO-BUS WEEKLY DIGEST March 2-8. Most important Economy & Business news by IPN
● MONDAY, March 2
How authorities explain delay in putting Chisinau Arena into operation
The launch of the polyvalent arena, which was put off for several times earlier, was planned for May 1. The Public Property Agency said the building works on the Chisinau Arena are over and an expert commission is to now permit the launch. There are a number of reasons for which the completion of the works was postponed, with the condition of the soil being the key one. The extension of the total construction area by 39% during the development of the project is another reason.
Give sense to money: Cashless payments ensure greater safety and convenience
The informational progress led to the appearance of new forms of payment, cashless ones. These are electronic payments made for purchases with the help of a bank card, on the Internet or through the mobile phone. These payments are based on money from bank accounts, in the case of cards, or electronic currency stored at a distance on a server, which is not related to a bank account. The electronic money from the server is kept in online personal wallets and can be used to pay for products and services to traders and service provides that join this payment method. The information was published by the National Bank of Moldova as part of the information campaign carried out in concert with the National Commission for Financial Markets within the financial education project “Learn. Give Sense to Money”.
All laws covered by new memorandum with IMF were adopted, PM
The Executive Board of the International Momentary Fund on March 11 will come together for a meeting where it is to approve a decision on the “successful completion” of the program with the Republic of Moldova and the last tranche of the program of 2016-2020, including with the financial component of about US$20 million. The Moldovan authorities announced that all the laws covered by the new memorandum with the IMF were adopted in the final reading. After the ordinary Monday meeting of the senior state officials, Prime Minister Ion Chicu said that all the laws stipulated in the new memorandum with the IMF were passed. “The Republic of Moldova fulfilled the so-called preventive conditions agreed in the negotiations with the IMF mission that visited the Republic of Moldova almost a month ago. All the conditions were met. You see that there is no condition concerning the rise in taxes, salary cuts or other actions that would run counter to Moldova’s interests,” stated the official.
Negotiations on Russian loan are to be completed this week, Premier Chicu
The negotiations on the provision of a loan held by the Moldovan authorities with the Government of Russia are expected to be finished this week. The first tranche of €200 million is to be disbursed at the start of April, Prime Minster Ion Chicu stated after the meeting of senior state officials. “The first tranche that we think can be used in 2020 is of €200 million. The loan is repayable in ten years at an interest rate of about 2%. We will be having discussions until the end of this week. I think the money will come in the first half of April,” stated Premier Chicu. The €200 million will go to repair about 250 km of roads.
● TUESDAY, March 3
Real reforms generate benefits for business community, study
A study carried out by the World Bank among 600 companies operating in Moldova shows that the real reforms work and they generate benefits for the business community. The study shows improvements compared with 2018, but there are also aspects on which work is yet to be done as the areas either weren’t sufficiently reformed or still deserve attention. World Bank Country Manager for Moldova Anna Akhalkatsi said the study covers a 15-year period and presents a general picture with the possibility of comparing developments and keeping the finger on the pulse of the business community as regards the perceptions of its representatives. Tarik Sahovic, Senior Private Sector Specialist at the World Bank Group, said the reforms that started to be implemented last year produced results. For example, the number of inspections decreased and the burden on the business sector was thus reduced.
Average monthly salary in 2019 was 7,356 lei
The average monthly salary in the economy in 2019 was 7,356 lei. In nominal value, the salary was by 14.1% higher than in 2018. In real terms, this grew by 8.9%, IPN reports, with reference to the National Bureau of Statistics. The average monthly pay in the fourth quarter of last year was 7,813 lei. In the budgetary sector, this was 6,564 lei, while in the economic sector – 8,287 lei.
Audit identifies shortcomings in development of airport infrastructure after concession
Even if the objective of the contract for the concession of the Chisinau International Airport was to develop the airport infrastructure and the quality of the provided services, an audit mission of the Court of Auditors identified shortcomings and incongruities. The report was examined in the meeting of the Parliament’s public finances control commission on March 3. Under the contract, the concessionaire was to invest at least €244.2 million in stages, depending on the rise in the flow of passengers served by the airport. The second airport modernization stage was to start in December 2017 and the investments at this stage were to total €115.5 million. The works to build the new terminal were to start until December 31, 2018 and to end by December 31, 2022.
● WEDNESDAY, March 4
Concessionaire of airport used anti-competition practices in relation to air operators, MP
The concessionaire of the Chisinau International Airport was selected without respecting transparency and the mechanisms for safeguarding the state interests. The process took place with serious and profound deviations and the investigation bodies should focus on this risky concession, MP Igor Munteanu, chairman of the Parliament’s commission on public finance control, stated after the examination of the Court of Auditors’ audit report on the signing and implementation of the contract for the concession of the airport. According to the MP, the concessionaire Avia Invest obtained about 1.2 billion lei from the modernization tax alone. Even if the Chisinau International Airport in 2017 had a flow of 2.6 million passengers, the concessionaire didn’t make at least 50% of the investments that it was obliged to make at the first stage. The second stage was to start in 2017, but didn’t.
Economy Minister Anatol Usatyi provides details about Russian loan
The disbursement of the Russian loan of €500 million to Moldova is delayed because of the replacement of the Cabinet in Russia. The money will be disbursed in tranches and the first installment will come to €200 million, IPN reports, quoting Minister of Economy and Infrastructure Anatol Usatyi. “The Government in the Russian Federation was replaced and the budget is to be rectified. The interest rate of 2% is very advantageous compared with the discussed rate of 3.5% provided by other countries,” the minister stated in the talk show “Emphasis on today” on TVR Moldova channel.
USAID about development of sectors of Moldova’s economy
The winemaking industry, light industry, local tourism and information and communication technology sector of the Republic of Moldova have witnessed a considerable development since they started to benefit from assistance from the U.S. Agency for International Development (USAID). These are the conclusions of a study based on statistical data from Moldova and other countries with which comparison was made for analyzing the competitiveness level and development trajectory of the country. In the meeting of the Economic Press Club, USAID Mission Director for Moldova Scott Hocklander presented a critical assessment of the four areas based on the over 14 years’ experience of USAID assistance for competitiveness projects in Moldova. “I’m very impressed by the development I see in the Republic of Moldova. During almost 15 years, we managed to cover with projects such large sectors as the wine industry, tourism, light industry and information technology. We found suitable persons and suitable projects and managed to support systemic projects and, for each invested dollar, we want to see value added for the beneficiaries,” stated Scott Hocklander.
Base rate reduced to 4.5% a year
The Executive Board of the National Bank of Moldova unanimously decided to reduce the base rate on the main short-term monetary policy operations by 1.0 percentage points, from 5.5 to 4.5% a year, IPN reports, quoting a press release of the central bank. The base rates on overnight loans and deposits were decreased by 1.0 percentage points, to 7.5 and 1.5% a year respectively. The decision was taken following the confirmation of the disinflation tendency forecast by the National Bank of Moldova in the inflation report No. 1 for 2020.
Public lot of 1.5 ha risks being sold at derisory price, statement
The founder of the public association “Civic Committee for Fighting Illegal Constructions and Defending Human Rights” Mihai Balan warns that the company that manages the shopping center (Unic) situated at the intersection of Ștefan cel Mare și Sfânt Blvd and Ismail St intends to purchase the public lot on which the store is situated and the adjoining area at a normative, not market price. As a result, the municipal budget will sustain great losses. In a news conference at IPN, Mihai Balan said the municipality issued the company with a permit for building annexes in the area adjoining the shopping center. According to Mihai Balan, the Unic shopping center that has been privately owned since 2016 is located on municipal land. Since this was privatized, the store’s administration has requested the local public authorities to issue permits for constructing annexes on an area of over 20 ares, which is also public property. But the business entity does not have a lease agreement, ownership rights or any other land relations with the local authorities. Until recently, the business entity met with refusal, but a building permit was ultimately issued to it last summer.
Monthly guaranteed minimum income to be indexed by 4.8%
The monthly guaranteed minimum income will be indexed by 4.8% on April 1 this year, given the annual rise in the consumer price index for the previous year, IPN reports, quoting a Government decision. After the indexation, the monthly guaranteed minimum income will be 1,107 lei. The funds needed for indexation were earmarked in the budget as social costs. After the monthly guaranteed minimum income was indexed by 3% on April 1, 2019, this was 1,056 lei. The guaranteed minimum income is used when calculating the social welfare and cold-month allowance provided by the state to socially deprived groups of people.
● THURSDAY, March 5
Contractors implementing infrastructure projects to get money after audit
The companies that will execute works of a poor quality as part of infrastructure projects risk remaining with the accounts blocked, without remuneration and with subsequent inclusion in a black list. When the works are over, an audit will be carried out and the relevant decisions will be taken only after this, Igor Dodon was quoted by IPN as saying in a new edition of the program “President Responds”. He noted that many infrastructure projects were implemented inappropriately. “The approach will be different now. The Government will make sure that a business entity is prevented from taking part in other tender contests and will be made to repair the things done badly,” stated Igor Dodon.
Those to blame for concession to detriment of state should be identified, MP
The Court of Auditors’ audit report on the signing and implementation of the contract for the concession of the Chisinau International Airport points to serious violations and abuses at the concession stage, said the chairman of the public finances control commission Igor Munteanu. According to the MP, the competent authorities should take all the possibilities to defend the interests of the state and re-include the airport in the category of strategic infrastructure facilities that cannot be passed on to other private companies. But the most important thing is to elucidate the circumstances of the dubious schemes and to identify those to blame for this unwise concession that was detrimental to the state interests. The selection of the concessionaire wasn’t transparent and was made by persons who violated their professional obligations and accepted an obscure company with 5,400 lei in the account that was registered right before the tender contest. “Practically, they allowed superficial and inefficient actions to be performed – 90% of the investments were made only from the airport’s operating revenues. The money borrowed by Avia Invest represents obscure, non-transparent sources, if we speak about Panama. The goal of the concession wasn’t practically achieved by this agreement,” Igor Munteanu told a news conference.
● FRIDAY, March 6
IMF took note of criminal investigation actions involving NBM
The International Monetray Fund took note of criminal investigation actions involving the National Bank of Moldova and will be closely monitoring developments in this area, says a press line issued by the IMF Resident Representative in the Republic of Moldova Volodymyr Tulin. “In this context, it will be important to safeguard the independence of the NBM, so that the hard-won progress achieved under the IMF-supported program is preserved for the benefit of all Moldovans. We stand ready to support the continuation of the reform process in Moldova,” runs the press line.
Final vote on bill to redirect part of NBM’s profit
Parliament adopted the bill on the redirection of the National Bank of Moldova’s profit by 52 votes in favor after giving it two readings. The opposition MPs said the bill does not envision the return of the money stolen from the banking system, as the politicians told the people, and is technical in character. More exactly, a sum of money is transferred from one pocket to another. Amendments are needed to exclude eventual risks and the money that will be transferred from the National Bank of Moldova to the state budget should be used to increase the lowest pensions.
12 locomotives to be delivered to Moldova by end-July
A number of 12 locomotives contracted through the agency of the project financed by the EBRD-EIB consortium will be delivered to the country by the end of July. In a response provided by Moldova’s Railways to IPN, it is said that the diesel locomotives TE33AC have GEVOI 2 engines. Compared with the previous generation of diesel locomotives TEIO, the new locomotives have a noxious emissions level that is by about 30% lower and consume by 15% less diesel. The locomotives are controlled by a microprocessor system and an on-board diagnostic system. The tender contest to buy locomotives was completed on September 30, 2018, with the company GE Parts LLC being chosen the winner. The contract was signed on November 6, 2018.
Alexandru Slusari: There are evil goals behind reduction of burden of bank fraud
There are evil goals behind the intention to reduce the burden of the bank fraud, said PPPDA MP Alexandru Slusari. According to him, the bill to institute a new method of allocating the National Bank’s profit available for distribution to the state budget revenues that was passed in two readings is a ticking bomb. The MP noted that the document, besides not solving the problem of the stolen US$ 1 billion, introduces a very dangerous mechanism for the future. By this law, the mechanism for covering the losses of the National Bank is being changed. The citizens face the risk of paying the losses of the National Bank, through the state budget, if the statutory capital of the NBM decreases under 4%. “By this amendment, we also ease the burden on the National Bank,” stated Alexandru Slusari, noting the MPs of the PPPDA supported the bill in the first reading, suggesting an amendment for the second reading – that the money distributed by the NBM should go on pensions – but the proposal wasn’t backed.
● SATURDAY, March 7
Agriculture, trade, building sector most affected by “salaries in envelope”
Almost 7% of the employees got “salaries in envelope” in the fourth quarter of last year. The phenomenon affected most seriously agriculture (55.3%), trade (15.8%), the building sector (13.1%) and industry (2.1%), IPN reports, quoting data of the National Bureau of Statistics. The employment without individual work contracts, based on verbal agreements, was most frequent among men (6.8%) than women (5.7%). The largest numbers of people working based on verbal agreements were estimated in agriculture (55.3%), trade (15.1%), the building sector (13.3%) and industry (2%). Some 15.7% of the persons employed in the economy worked in the informal sector in the fourth quarter of last year. The salary earners represented 23.9% of the informally employed persons. Each sixth working person (15.6%) said they would like to change the situation in relation to their current job as they weren’t satisfied with the size of pay.
