ECO-BUS WEEKLY DIGEST 2 November 8. Most important Economy & Business news by IPN
● Wednesday, November 4
Spanish businessman about problems faced by foreign investors in Moldova
Antonio Romero Macarro, a businessman from Spain who has worked in Moldova for 25 years, said that even if he invested money, paid taxes to the state and created jobs, he now risks remaining without his business owing to an interest group that influences the hearings so that he could not win the case. Other foreign investors also face such situations. Antonio Romero Macarro called on the responsible institutions to ensure a fair trial. Antonio Romero Macarro said he came to Moldova in 1996 in the framework of a project to build a glass factory according to European standards. When the factory was put into operation, problems started to appear and the company was ultimately excluded from the project, remaining with a debt of US$1 million. To solve the dispute, he went to court and the ordinary court and the Appeals Court decided in his favor. But the judgment of the Supreme Court of Justice was influenced by an interested person through the agency of acquaintances and relatives.
● TUESDAY, November 5
Non-reimbursable aid from Russia transferred to Ministry of Finance
The non-reimbursable assistance to the value of 275 million Russian rubles (59.7 million lei) from the Russian Federation reached the account of the Ministry of Finance of the Republic of Moldova. The Ministry said the money will be used to urgently support the national agricultural producers that were seriously affected by this year’s drought. The agreement between the Ministry of Finance of the Republic of Moldova and the Ministry of Finance of the Russian Federation on the provision of non-reimbursable financial assistance to the Government of the Republic of Moldova does not entail the fulfillment of any commitments by Moldova.
Russia’s grant aid transferred to Ministry of Finance
The grant assistance to the value of 275 million Russian rubles (59.7 million lei) offered by the Russian Federation reached the account of the Ministry of Finance of the Republic of Moldova. The Ministry said the money will be used to urgently support the national agricultural producers that were seriously affected by this year’s drought. The agreement between the Ministry of Finance of the Republic of Moldova and the Ministry of Finance of the Russian Federation on the provision of non-reimbursable financial assistance to the Government of the Republic of Moldova does not entail the fulfillment of any commitments by Moldova.
Promotion of green mobility: electrical cars in Moldova, debates
The European Union will continue after 2020 to support the Republic of Moldova in the process of reducing greenhouse gas emissions. The EU offers support to energy efficiency, building thermal insulation, street lighting, technical assistance and energy reform projects. One of the future objectives is to ensure progressive de-carbonization, climate-neutral economy in accordance with the European Green Deal. Ion Guzun, project officer at the EU Delegation to Moldova, spoke about this in the EU Debates Café that was staged by the Institute for European Policies and Reforms under the theme “Promotion of green mobility: electric cars in the Republic of Moldova”. According to Ion Guzun, another objective of the EU is to ensure the recovery of the post-COVID-19 green economy, develop priority infrastructure from economic viewpoint, with increased effect on the ecological transport networks at the local, regional and national levels. There is the plan to invest in the extended trans-European network for the Eastern Partnership, which includes Moldova.
Suggestions for greater interest in electric cars
The faster Moldova has high-capacity chargers for electric cars, the faster will grow the interest and, respectively, the demand for such cars in the country. According to Iulian Rusu, vice director of the Institute for European Policies and Reforms (IPRE), the new electric cars can cost over €30,000 and this is the limit on which higher excise duties are imposed on the import of luxury cars. To encourage the purchase of electric cars, the authorities should review this ceiling. The subject was discussed in the EU Debates Café held under the theme “Promotion of green mobility: electric cars in the Republic of Moldov” that was staged by the IPRE. Iulian Rusu noted a good measure is for the state to provide particular premiums, as in Romania, which offers over €10,000 on the purchase of an electric car. Solutions can be also implemented at the local level, such as free or preferential parking, right to travel on dedicated lanes. Moldova now does not impose a road tax on the owners of electric cars, but this is not fully right as they also use the roads.
● FRIDAY, November 6
Exploitation of mineral resources generates major environmental problems
The exploitation of mineral resources causes damage to the environmental at all the stages of this process and the unfavorable consequences of mining are often felt during a long period of time, even after the closure of a mine or a quarry. The inhabitants of villages and towns where mining is practiced are the worst affected as they have to drink water and breathe in polluted air, face landslides and houses fissures, while the roads and farmland are destroyed, said experts invited to a news conference staged by the Independent Think Tank “Expert-Grup”. The extractive industry’s contribution to Moldova’s economy is of about 0.2%, but the damage caused to the environment comes to tens of millions of lei a year. “The annual value of the damage caused to the environment, calculated by the Labor Protection Inspectorate, exceeds 80 million lei. This is the value of the damage caused only by legal extractions, without taking into account the illegal quarries,” said Tatiana Savva, program director at “Expert-Grup”. According to her, the damage consists in air and water pollution, losses of image and infrastructure whose value is also not calculated.
Policies are needed to promote electric cars, debates
The automobile market showed it is interested in alternative electric transport that has a series of advantages for users and the whole society. With such transport, CO2 emissions can be reduced and a healthy environment can be ensured, which will later have an impact on the costs incurred by the state in healthcare, agriculture, transport. The path of electric cars, with all the aspects, is the path that should be followed in the adoption of policies and promotion of green mobility by the authorities, Iulian Rusu, vice director of the Institute for European Policies and Reforms (IPRE), said in a debate entitled “Promotion of green mobility: electric cars in the Republic of Moldova” that was stated by the Institute. Green City Lab project coordinator Simion Berzoi said the state is inclined to impose particular taxes on the import of electric cars even if the market is not developed. Out of 1 million cars existing in the country, 500 are electric, which is not even 0.025%. The market is rather poorly developed for imposing particular impediments. “The responsible ministries tend to gather money into the budget, but this sector should be probably developed and such reforms could be made later. We can reach a figure of 10,000 electric cars by 2025-2027. If restrictions are imposed, this trend can be slowed down,” he stated.
Ion Chicu about fiscal-budgetary policy, IMF and possible political destabilization
Prime Minister Ion Chicu expressed his confidence that no matter who wins the presidential elections, there will be no political destabilization in the Republic of Moldova. In case of political confrontations, the country risks remaining without an agreement with the IMF. “If the country faces a political crisis after the presidential elections and we are unable to approve the budget for next year and the program with the IMF because of the political destabilization, we will experience difficulties no matter who wins the presidential elections. That’s why I bank on the maturity and wisdom of the politicians. These important laws need to be adopted. Later, we will see,” Premier Chicu stated in the talk show “Moldova Live” on the public TV channel.
NBM agrees banks’ contributions to resolution fund for 2021
The National Bank of Moldova (NBM) set banks’ contributions to the resolution fund for 2021. The contributions of the whole banking system were calculated at 131.3 million lei, IPN reports. The NBM notes that it informed the licensed banks of the tranches, time limits and form of payment of contributions to the resolution fund. The contributions were determined based on the target level of 3% of the volume of guaranteed deposits, which is to be achieved by the end of 2024, the coefficient of adjustment to the rise in the volume of deposits and the multiplier for adjustment to the specific risk of the bank. The target level that derives from the volume of guaranteed deposits was 475.8 million lei on June 30, 2020 and is to be reassessed annually.
Insurance policies are issued for only 17% of hazardous industrial objects
In the Republic of Moldova, there are over 4,700 hazardous industrial objects, such as lifts, industrial machines, filling station equipment and others. The eight national insurance companies issued insurance policies for only 17% of them. Last year, insurance as a result of incidents involving hazardous industrial objects was asked by two applicants, with the insurance totaling about US$ 1,000, said Moldovan insurers that took part in a poll organized with support from the USAID-funded Moldova Financial Sector Transparency Activity. Under the law, the insurance for eventual damage is set based on the assessment of risks typical of the insurance contract for hazardous industrial objects. The insurance companies use own risk assessment criteria as there is no norm in Moldova that would classify the hazardous industrial objects depending on the size of the damage they can cause, the Economic Council of the Prime Minister said in a press release. The legal norms also do not define the nature of damage that should be covered with insurance.
● SATURDAY, November 7
Official reserve assets of NBM on the rise
The official reserve assets at end-October were US$3.536,95 billion, an increase of US$ 83.56 million compared with September 30, when they came to US$3.453,39 billion. According to the NBM, the rise in the official reserve assets was determined by the purchases of currency in the amount of US$68.80 million from the domestic currency market and the net inflows related to the mandatory currency reserves of licensed banks in the amount of US$23.31 million. The rise was also due to the registration of loans and grants in favor of the Ministry of Finance for investment projects (US$11.14m) and the net inflows into the account of the Foreign Assistance Programs Management Office (US$3.35m).
