● MONDAY, March 21
New provisions concerning electrical appliances on sale
The energy-related products that will be placed on the market will be mandatorily accompanied by a label indicating the consumption of energy. Such a provision is contained in a bill to amend and supplement a number of regulations concerning the sale of washing machines, fridges and TV sets, which was approved by the Cabinet. The bill specifies the form and content of the label and where it should be placed. The bill authors said the consumption of energy by domestic appliances increases given the technological progress and the greater supply of such devices. This is a problem for most of the European countries, including Moldova, which imports 95% of the energy resources. It is expected that the consumption of domestic appliances in 2020 will be twice larger than in 2009, while carbon emissions will grow.
Taking away of billboards in Chisinau will result in damage to municipal budget
The dismantling of billboards put up on the streets of Chisinau could cause damage of about 26 million lei to the municipal budget, said advertising operators that are members of the Association of Advertising Agencies of Moldova. These are dissatisfied with the mayor of Chisinau’s recent decision to take away the billboards from a number of streets. Vice director of an advertising company Iurie Caluja, in a news conference, said that before dismantling the billboards, the local public authorities must assess the possible consequences of such an act. Iurie Caluja said the revenues in the area of outdoor advertising amount to about 100 million lei a year. “According to our estimates, the outdoor adverting sales exceed 100 million lei. Of this sum, over 26 million lei is paid into the municipal budget as advertising taxes. Elementary calculations show that 16-17 million lei is paid directly as VAT,” he stated.
● TUESDAY, March 22
Business climate in Moldova reached worst state ever, poll
There was a general downward trend in business the previous quarter, regardless of the type of company - national or foreign - and this reached the lowest level since June 2015. The managers of foreign companies are worst-hit by the local context. No type of area of activity was spared. The biggest decline was witnessed in the financing, banking and insurance sectors, while the business climate reached the worst state ever. The Business Barometer for the fourth quarter of 2015 was presented by the France – Moldova Chamber of Trade and Industry, the public association “Moldovan-German Economic Cooperation” and Magenta Consulting on March 22. Even if the questioned companies expected positive development perspectives the previous quarter, the expectations also diminished considerably. The companies are more prudent and do not expect an improvement in their business during the next quarter. The companies operating in agriculture and agrifood industry are more pessimistic. The polled companied continued to invest during the last quarter, according to the predictions stated in the last poll. The trend remains the same for the next quarter even if the wish to invest is moderate or close to zero among foreign companies. The companies from banking and insurance plan to reduce the investments during the next quarter.
First tender contests within ESCO Moldova project to be held in June
The first tender contests to select companies that will provide services to optimize the use of energy in public buildings in Chisinau within the ESCO Moldova project will be held this June. The chosen companies will receive US$900,000 in financial assistance from the Loan Guarantee Fund to be used as security for loans. The “ESCO Moldova Project - Transforming the market for Urban Energy Efficiency in Moldova by introducing Energy Service Companies” is implemented by UNDP and is supported by the Chisinau City Hall. Project manager Nicolae Zaharia said an ESCO is a company that provides integrated financial and technical solutions for achieving energy cost reductions (energy savings), and whose overall compensations are linked to the performance of the implemented solutions. Within the project, there will be selected the buildings where the necessary thermal insulation, window replacement and heating system adjustment works will be performed. According to Nicolae Zaharia, the contractors will get US$900,000 in financial assistance from the Loan Guarantee Fund, while the Energy Efficiency Fund will offer a grant of US$3 million. The money provided by the project to the companies will be used as security for the released loan.
World Bank about Moldova’s trade
As a small and open economy, job-creation in Moldova depends on trade. The economy has become more open over the last 20 years, and the value of trade has quadrupled. However, Moldova has not been able to fully benefit from foreign trade opportunities, says the Moldova Trade Study report launched by the Word Bank Group office in Moldova. The report assesses Moldova’s foreign trade performance and offers policy recommendations to boost exports. World Bank Country Manager for Moldova Alexander Kremer said that what this study really shows is how much Moldova’s export prospects depend upon reforms inside Moldova. “Stopping hassles at the border and cutting red tape for business are much more important for Moldova’s exports than international trade agreements,” he stated. The main findings and recommendations of the Moldova Trade Study report are as follows: exports have been growing: the sum of exports plus imports expanded substantially, from US$1,250 million in 2000 to US$7,800 million in 2013. Diversification of markets and products accounted for much of export growth. Foreign direct investment (FDI), crucial to boost export competitiveness, declined after 2007, and remained at a disappointing 3.11 percent of GDP in 2013. Moldova's free economic zones were important in attracting FDI.
End-users indirectly finance separatism in own country, experts
The joint stock company “Moldovagaz”, in which the Government of Moldova owns a shareholding of over 35%, purchases natural gas also for the Transnistrian region, which hasn’t paid for the consumed gas since 1990. Thus, huge debts to the Russian company “Gazprom” accumulated, experts Victor Parlicov and Sergiu Tofilat said in an online debate staged by the Institute for Development and Social Initiatives “Viitorul” in partnership with Radio Free Europe. According to them, purchasing afterward electricity produced with unpaid Russian gas from Transnistria, the Moldovan end-users indirectly finance the separatism in the own country. Victor Parlicov said that a scheme to purchase natural gas by “Moldovagaz” has been employed since 1990. “Moldovagaz” imports the whole volume of gas from “Gazprom”, including for the Transnistrian region. “The debts accumulate because not “Gazprom” provides gas directly to Transnistria, but “Molovagaz”. We can say that this company provides services to legalize the activity of “Gazprom” in the Transnistrian region,” he stated. As to the debts to “Gazprom”, the expert said that no one has a solution to the reached situation now.
● WEDNESDAY, March 23
UniAgroProtect seeks customs duties to protect agrifood market
The National Association of Agricultural Producers UniAgroProtect expresses its concern about the delay in introducing customs duties to protect the home market from the import of poultry and dairy products from Ukraine. The Association’s head Alexandru Slusari issued a press statement saying that it has been more than a month since the given bill was drafted, but no actions are taken. “We warn that the introduction of special protection customs duties is an absolutely legal measure that meets the norms of the World Trade Organization and the provisions of the CIS Free Trade Agreement. This measures can be applied when imports from a country increases by over 15% compared with a similar period or there is an imminent risk of such an increase,” stated Alexandru Slusari.
Economy Ministry suggests introducing customs duties on particular Ukrainian imports
Customs duties will be introduced on the import of meat and dairy products and cement from Ukraine. The Ministry of Economy drafted a Government decision on the introduction of customs duties in the trade regime with the CIS states, valid until December 31, 2016. According to the Ministry, the decision was drafted following requests from dairy and meat producers to take measures to protect the sector in connection with the growth in the quantity and assortment of products made in Ukraine on the home market. The decision is also based on customs statistics, which show that the imports of dairy rose by 15%, and on the provisions of the CIS Free Trade Agreement.
Moldova to have a new investment protection agreement with Turkey
The Government of Moldova and the Government of Turkey will sign a new agreement on reciprocal promotion and protection of investments. The Cabinet approved a decision to this effect in its March 23 meeting. After it is signed, the new agreement will substitute the accord signed in February 1994. Its provisions were adjusted to meet the changes that occurred in the economies of the two countries and to develop the Moldovan-Turkish relations of cooperation. The agreement will be valid for ten years and will be extended if the sides are willing to.
● THURSDAY, March 24
Reformation of National Committee for Financial Stability is crucial, analysis
The National Committee for Financial Stability, which is responsible for the coordination of the actions of the institutions in charge of stability of the financial sector, faces serious governance-related problems caused by the powerful political affiliation and unclear powers and became thus a part of the problem in the resolution of the banking crisis. Such a conclusion was formulated by experts of the German Economic Team Moldova and the think tank “Expert-Grup”, who analyzed the Committee’s work and worked out a plan for reforming this institution, which they consider crucial for preventing financial crises. The experts said the National Committee for Financial Stability needs to be reformed because almost half of its members are politically affiliated. Furthermore, the Committee functioned more like a law implementation body than a communication platform, threatening thus the independence of the National Bank of Moldova. Besides, the institution had unclear powers as many of its duties overlap with responsibilities of its members. Ultimately, this functions as a crisis management institution with limited emphasis on crisis prevention.
Temporary measures to protect home market from particular imports
Customs duties will be put on the import of dairy products, meat and cement from Ukraine in the period until this yearend. A decision to this effect was approved by the Government. The given measure is a temporary one and is aimed at protecting the domestic market from imports, in particular meat and dairy products from Ukraine as the supplies of these to Moldova rose by about 15% during the past few months. This fact was repeatedly signaled by national milk and meat processors. These have to work in conditions of disloyal competition as the fodder in the neighboring country is cheaper. The draft decision was proposed by the Ministry of Economy, which intends to organize a meeting with Ukrainian experts to exchange opinions on the issue and identify solutions by the end of this month.
● SATURDAY, March 26
National Committee for Financial Stability will be reformed
The National Committee for Financial Stability is to be reformed, Prime Minister Pavel Filip said in a meeting where he spoke about the proposals of the German Economic Team Moldova and the think tank “Expert-Grup” about the need to reform the Committee and the methods of more efficiently organizing its work. According to the Government’s press service, the future body should become a platform for communication and coordination of the actions between bodies, which will center on system crisis prevention activities. Thus, among the key elements are to ensure the apolitical character of the National Committee for Financial Stability and to clearly define the mandate and role of its members.
More time allotted for implementing regional development projects
The Government extended the Common Program Document for 2013 – 2015 until 2016. The document includes regional development projects that are to be implemented. These are financed with money from the National Regional Development Fund, which represents 1% of the state budget incomes for a particular year. The Common Program Document for 2013 – 2015 contained 64 projects of regional importance to supply drinking water, to build important segments of roads, to rehabilitate tourist facilities and parks and to construct infrastructure designed to support the development of businesses in regions. Their value was estimated at 1.25 billion lei. A sum of 556 million lei was allocated from the National Regional Development Fund in the period.
