ECO-BUS WEEKLY DIGEST 20-July 26. Most important Economy & Business news by IPN
● MONDAY, July 20
Draft decision on framework agreement between Moldova and CEB approved
The draft decision on the endorsement of the signing of the framework agreement between the Republic of Moldova and Council of Europe Development Bank (CEB) on the lending of at most €70 million to Moldova for covering the costs associated with the fight against COVID-19 was approved in the July 20 meeting of the Government. Deputy Prime Minister Sergey Pușcuța, minister of finance, said it is estimated that the loan will cover the costs related to the fight against COVID-19 in the budgetary period of 2020-2022. “Consequently, the disbursement time limit was set at June 30, 2022. The maximum repayment period of the loan for the Health component is 15 years, with a grace period of four years, and six years for the Support for Micro, Small and Medium-Sized Enterprisers component, including a grace period of one year,” stated the official. “The framework lending agreement allows applying a fixed interest rate and a floating rate that will be decided on each requested disbursement, depending on the proposed financial conditions.”
Bill on insured subsidization in agriculture approved
The Government approved a bill to increase the level of subsidization of insurance premiums in agriculture from 50% to 70%. The bill extends the areas covered by the law by offering the possibility of subsidizing not only the quantity, but also the quality of the harvested crops. Minister of Agriculture, Regional Development and Environment Ion Perju said the proposal was formulated because the occurrence of the insured risk in agriculture not always leads to quantitative losses of the harvest, with only the quality being affected. In such cases, the insurer does not have the right to pay damages to the agricultural producer. Most of the times, the poor quality of agricultural products makes sale impossible and the agricultural producers as a result suffer losses.
● TUESDAY, July 21
A new round of privatization
The Public Property Agency has announced a new round of privatization of publicly owned facilities for July 17 - August 18. An outcry auction to sell four state-owned enterprises as undividable property was set for August 5. The four companies are the Publishing House of the Academy of Sciences, “Prevenitorul autogestionar al Academiei de Științe”, ÎS “Protecția Plantelor” based in Durlești and “Pita Service” based in Basarabească. There will also be auctioned the social holding in “IT-CAFE” SRL and ten facilities, two of which are the cinemas situated in the district centers Leova and Fălești and one is a four-story production block located at Iurie Gagarin St in Chisinau. The deadline for applications is August 4, 4pm. The selling prices differ from one facility to another. For example, the initial selling price of the holding in “IT-CAFÉ” SRL is 3 530 000 lei. Within the announced privatization round, until August 21, the Moldova Stock Exchange will host outcry auctions to sell undividable holdings in six joint stock companies, namely: “Drumuri-Orhei” SA; “Drumuri-Soroca” SA; “Drumuri-Criuleni” SA; „Drumuri-Cahul” SA; Institutul de cercetări științifice „RIF-ACVAAPARAT, and “Metalferos” SA.
Small Business Guidebook launched
The Alliance of Small and Medium-Sized Enterprises of Moldova (AIM), in the framework of the project “Development of Ecosystem of Small and Medium-Sized Enterprises” that is financed by the Swiss Cooperation Office, has launched the Small Business Guidebook in support of the national entrepreneurs. This is the first guidebook that was publicly consulted in the southern, central and northern districts of Moldova. Among the stakeholders that took part in the designing of the guidebook are entrepreneurs working in different areas, development organizations, 13 business support organizations, public functionaries and teachers, students and young people. Liliana Busuioc, of the Alliance of Small and Medium-Sized Enterprises of Moldova, said the guidebook is intended for all the support organizations and organizations that deal with entrepreneurial education. This is a roadmap for all those who want to start a business or who run a business started not more than three years ago.
Lending agreement with EU for €100m signed
Deputy Prime Minister Sergey Pușcuța, Minister of Finance, and the governor of the National Bank of Moldova Octavian Armașu on July 21 signed the lending agreement between the Republic of Moldova and the European Union for €100 million in macro-financial assistance (MFA) and the Memorandum of Understanding in this regard. In a press release, the Ministry of Finance said the goal of the agreement is to diminish the financing constraints, to attenuate the balance of payments and budget needs and to support the Republic of Moldova in the current financial situation. To benefit from an MFA package, partner countries should meet certain political pre-conditions in terms of respect of democratic principles, human rights and rule of law and should also benefit from an IMF financial assistance program.
Promotion of local tourism as an alternative during pandemic
The visitation of national sights became the most suitable alternative during the pandemic crisis. The Investment Agency and other organizations, including travel agencies, kicked off campaigns to intensely promote the tourist attractions in Moldova. According to the Investment Agency, the first survey of the Moldovans’ perception of local tourism was carried out as part of the campaign NeamPornit (We Got Started) together with Magenta Consulting. The poll involved about 2,100 respondents aged between 25 and 55. The results show about 71% of the Moldovans would like to see national tourist attractions, while two in three respondents prefer active rest. Within the same campaign, the Investment Agency initiated the most wide-ranging digital map so far. The website contains an interactive and exhaustive digital map of national tourist destination classified into easily accessed categories, depending on travellers’ preferences.
Moldovans could economize if all home appliances are energy efficient
The Republic of Moldova could save 820 million lei annually if all the household appliances are of a high energy efficiency class, shows a study of the impact of the use of energy efficient equipment by the population conducted by the Ministry of Economy and Infrastructure. According to the Ministry, the use of energy efficient domestic appliances has not only a financial impact, but also an environmental impact and in time will also result in the reduction of the country’s dependence on imported energy resources. “The demand for electrical energy increases annually and the Republic of Moldova 74% depends on imported energy resources. This dependence generates a big risk to the country’s energy security. The optimization of energy consumption is an immediate solution that would reduce this risk. As the domestic households account for 42% of the annual consumption of energy, the buying of energy efficient electrical appliances is a good solution for the consumer and also for the state” said Minister of Economy and Infrastructure Sergiu Railean.
Inactivity rate is expected to grow towards yearend, debates
The impact of the COVID-19 crisis on the labor market of Moldova will be felt more drastically towards the end of this year. It is forecast that the employment rate will decrease by 10%, while the inactivity rate will grow by at least 11% owing to the Moldovans who returned home and to the persons who lost their jobs in Moldova. The impact of the pandemic crisis on the wellbeing of Moldovan migrants was discussed in public debates staged by the Institute for European Policies and Reforms and the International Organization for Migration in cooperation with the Hanns Seidel Foundation in Moldova. According to Anna Gherganova, head of the Employment Policy and Migration Regulation Division of the Ministry of Health, Labor and Social Protection, the number of available jobs already decreased and the unemployment rate goes up. The jobless rate at the end of this year is expected to rise twice. The migrants working abroad without a work contract are affected the most. Some of them return home. National Employment Agency director Raisa Dogaru said over 900 migrants used the Agency’s services in the first six months of this year. More than 100 of them found a job in the period. 62% of the persons were men and 43% of all the migrants are aged between 35 and 49. Many are yet older than 50 and have health or social problems. Most of the migrants came from Russia, Germany or Italy.
Debates: What solutions state suggests for families that remained without remittances
Remittances represent 28% of the incomes of families with children in rural areas, according to the National Bureau of Statistics. The citizens who work abroad during the pandemic have sent home less money and a large part of them even stopped to send remittances as they also lost their sources of income. The issue was discussed in public debates organized by the Institute for European Policies and Reforms and the International Organization for Migration in cooperation with the Hanns Seidel Foundation in Moldova. Anna Gherganova, head of the Employment Policy and Migration Regulation Division of the Ministry of Health, Labor and Social Protection, said the state has particular instruments for supporting the persons who remained without remittances, but they are not sufficient. The persons who remained without a job should go to the National Employment Agency and register as jobless so as to get unemployment benefit. When the pandemic started, the budget for paying unemployment benefit was trebled to about 100 million lei. There is also the social assistance program by which the minimum guaranteed income of families that remained without incomes was raised. National Employment Agency director Raisa Dogaru noted that the persons who ask for unemployment benefit should have an insurance period.
● WEDNESDAY, July 22
Moldovans who work illegally abroad can only return home, statement
Circular migration involves about 21% of the Moldovan migrants and 28% of those who are in EU member states have a precarious employment situation. This way, it is difficult to protect them in the context of the pandemic. The Moldovan migrants who work abroad without a contract are not protected during the pandemic and have no other way out than to find a legal job or to return home, Anna Gherganova, head of the Employment Policy and Migration Regulation Division of the Ministry of Health, Labor and Social Protection, stated in public debates staged by the Institute for European Policies and Reforms and the International Organization for Migration in cooperation with the Hanns Seidel Foundation in Moldova. Anna Gherganova noted it is not the migrants’ blame that they have to work in illegal conditions, but the situation in which they found themselves shows once again that bilateral agreements need to be developed so as to promote legal migration and to protect the rights of the Moldovans abroad. This is possible where these instruments work, in such countries as Israel. Not many countries supported the persons who worked without a contract during the pandemic, like Ireland. In Poland, the persons who work legally also suffered. The Moldovan authorities aim to introduce mechanisms for controlling private employment agencies so as to protect the Moldovans who went abroad to work with their assistance.
● THURSDAY, July 23
Missed tranche of macro-financial assistance asked to be redirected
The Institute for Development and Expertise of Projects (IDEP) of Moldova asks the College of Commissioners of the European Commission to redirect the last tranche of €40 million of the macro-financial assistance that the Moldovan authorities failed to get to the ECIPES ((European Cohesion by Individual, Public and Entrepreneurs Support) program that will benefit 17% of Moldova’s population, 50% of mayors and 2,000 young people. IDEP Moldova proposed a technical support program centered on the citizens, mayor’s offices and future young entrepreneurs who could access an online platform and could get EU support after short online training, program author Iurie Calestru, of IDEP, stated in a press release. Owing to this program, the Moldovan citizens could apply online to have domestic electrical appliances replaced with appliances of the A+++ class and will get a one-off grant of €100 per person in support. The second large category of beneficiates includes the mayor’s offices that are twinned with EU municipalities. They could implement a local development project with a maximum of €10,000 in EU funding. The young people between the ages of 18-35 seeking to launch a business are the third large category of beneficiaries. They will get by €5,000 for a venture in the services sector or €15,000 for a manufacturing venture, €12,000 of which for buying equipment.
Metal companies complain about pressure exerted by private business entity
Representatives of metal companies residing in Moldova said they are subject to pressure by a private business entity that, according to them, wants to take over the metals market. Ion Drăniceru, president of the Moldovan Employers Ferrous and Nonferrous Metals Recycling and Collection Association, said the given business entity is a newly founded private company. “We do not want to be at war with someone. This is the reason that made us at this stage not to reveal the name of the person who wants to take over the metals market and the name of his company. We want to be allowed to operate and to choose who to cooperate with, not to be forced to follow a particular path,” stated Ion Drăniceru. He believes the final goal is to freeze the activity of metal companies so that these are later taken over by raider attacks. “Analyzing the events that have happened on the metals market of the Republic of Moldova during the past few months, we reached the conclusion that attempts are being made to re-divide the spheres of influence. More exactly, someone, and we know who, tries to take over all the processes on the metals market,” said Ion Drăniceru.
Association founded to represent interests of metal businesses
The recently founded Moldovan Employers Ferrous and Nonferrous Metals Recycling and Collection Association represents the interests of about 20 metal companies. It was registered with the Public Services Agency on July 7, 2020. The Association was created to promote the interests of metal companies founded over 20 years ago by persons who during many years forged their business with the own forces, the association’s president Ion Drăniceru. He signaled an alarming situation on the national metals market and an imminent danger faced not only by the business entities operating on this market, but also by the country. This is the reason why the companies decided to form an association and the Employers Association will also fight misinformation, including through the media. Ion Drăniceru assured that all the companies that form part of the Association act in good faith, reside in Moldova and do not have bank accounts outside the country. The given segment provided jobs for at least 500 Moldovans.
Metal companies make call to prosecutor general
About 20 metal companies that are members of the Moldovan Employers Ferrous and Nonferrous Metals Recycling and Collection Association call on Prosecutor General Alexandr Stoianoglo to follow the developments in the cases featuring them so as to cease the actions to intimidate honest businesses. The companies said they are subject to pressure for the purpose of taking over the metals market. Representatives of the Association said that based on false information offered to the Prosecutor General’s Office, broad searches will be carried out at companies that do not want to form part of the games aimed at taking the metals market under control. In a press briefing at IPN, the Association’s president Ion Drăniceru said that extensive searches were conducted at a number of associates last November and December and persons were arrested as a result without being questioned. Computers and other equipment were seized. No case was yet completed. “We hope that the Prosecutor General will know to make a difference and will understand why his inferior (prosecutor in charge of the case, e.n.) was furnished with false information and what the goal of his subsequent actions will be,” stated Ion Drăniceru.
● FRIDAY, July 24
NBM launches online financial education campaign
The National Bank of Moldova (NBM) has launched the financial education campaign “Spend vacation with NBM” that is intended for people of all ages. This will be conducted online as of July 27 and will ensure the extended access of those who want to make a virtual tour of the central bank and to benefit from an incursion in the financial-banking theme. The visitors will be able to take part in two events: “A vacation day at NBM” that became traditional and “First financial education camp in the Republic of Moldova”, which is intended for students or young people who are eager to learn more about the financial-banking sector, as part of the project “Give Sense to Money”.
● SATURDAY, July 25
President Dodon pleads for supporting helicopter builder from Criuleni
President Igor Dodon said the state should support the talented inventors. He referred also to the helicopter builders from Criuleni, who invent helicopter parts in a private hangar. “I think there are more hidden talents in the Republic of Moldova. We should allow them to assert themselves by working legally,” President Dodon told journalists in a news conference held at his residence in Condrița. He noted that a number of business entities of the Economic Council approached him and asked him how they can find those helicopter part inventors. He said that if those guys can work “miracles”, they should be supported, but they should answer if they broke the law.
President Dodon: Moldova’s agriculture does not have a future without irrigation
President Igor Dodon considers regulations to enable farmers to have access to groundwater, as everyone has access to this, should be worked out as swiftly as possible, even if the ecologists and about 80 NGO sound the alarm about the danger implied by this process – soil degradation and exhaustion of drinking water. In the program “President Responds”, President Dodon said the lack of irrigation will be the key problem in agriculture. The given problem appeared in the Soviet period, when billions of rubles were invested in the irrigation systems of Moldova. “If we don’t irrigate, Moldova’s agriculture doesn’t have a future,” he stated. According to Igor Dodon, the problem can be solved temporarily or systemically. However, to solve the problem systemically, tens of billions of lei needs to be invested. Until this money is found, it was decided to allow farmers to irrigate the farmland with water from rivers and lakes, even if these are private. The temporary solution at this stage is to ensure access to groundwater, in the way in which this is done in Romania and Ukraine. President Dodon considers not everyone will use this water as it is expensive to build an artesian well and water there is not always of a higher quality and expensive filters need to be set up. Only the owners of fields with high value crops, such as fruit and vegetables, will afford to use his type of irrigation.
Cash transfers this June 42.2% up on last June
The total amount of net money transfers from abroad made in favor of individuals via licensed banks of the Republic of Moldova in June 2020 amounted to US$ 143.21 million, an increase of 42.2% on June 2019. Transfers from the EU-27 represented 45.6% of the total transfers; those from the CIS - 16.4%, while those from the rest of the world – 38.0%. Transfers from Russia constituted 15.4, while those from Italy –14.2%. Transfers in euros made up 62.0% of all the transfers. These are followed by those in U.S. dollars at 36.7% and those in Russian rubles at 1.3%. The bank transfers from abroad in favor of individuals of the Republic of Moldova in January – June 2020 totaled US$ 646.15 million, up 9.8% on the corresponding period last.
