● MONDAY, October 24
Privatization of nonresidential buildings by tenants to be facilitated
The procedure for privatizing publicly owned nonresidential buildings that are leased out to tenants will be simplified. Currently, to submit applications for purchasing rooms in nonresidential buildings, the persons are obliged to hold tenancy for at least six month. By the proposed amendment, the period will be reduced to a month. The amendment was drafted by the Ministry of Economy in response to numerous applications from persons who rent nonresidential property. These complain that it is very hard to invest in the repair of such rooms, most of which are in a deplorable state, and to simultaneously pay rent.
IMF to discuss Moldova’s request for financing Nov. 7
The Executive Board of the International Monetary Fund will come together on November 7 to discuss the reform program for Moldova that is to be supported by a three-year Extended Credit Facility and Extended Fund Facility (ECF/EFF) arrangement. Access under this arrangement is proposed to be set at 75 percent of Moldova’s quota in the Fund (about US$ 182.7 million). The new ECF/EFF arrangement will first and foremost aim to make swift upfront improvements in financial sector governance and supervision, especially to assess and ensure transparency in the shareholder structure of the Moldovan commercial banks. The press release says the National Bank of Moldova and the Government of Moldova implemented the agreed prior actions needed for the IMF Executive Board to consider the new program. An IMF mission reached a staff level agreement with the Moldovan authorities on a three-year economic reform program that could be supported by the IMF on July 26, 2016.
FIA supports replacement of patent with independent commercial activity
The Foreign Investors Association is for replacing patent in trade with independent commercial activity. The Association’s members support the new amendments to the Law on the Entrepreneur’s Patent, which provide for the annulment of the patent for trading activities and for the introduction of a new conception in the Tax Code of the Republic of Moldova, of ‘independent activity’.The notion of ‘independent activity’ envisions a simplified taxation and trading regime for private individuals who obtain revenues from independent commercial activity. The independent commercial activity will be registered by submitting an application to the local body of the State Tax Service. The ceiling on sales revenues will be raised two times, while the tax will represent 1% of the sales revenues. The entrepreneurs will be also exempted from paying local taxes. The new amendments make the use of cash registers mandatory. First of all, this will enable to correctly asses the incomes obtained from independent commercial activities and, simultaneously, to protect the rights of consumers who, if necessary, will be able to call the Consumer Protection Agency. The new conception envisions greater transparency in commercial activities without increasing the fiscal burden on the entrepreneurs performing such activities.
EBRD: Positive changes have been witnessed in Moldova
Positive changes have been witnessed in the Republic of Moldova and the Government’s actions produce results, representatives of the European Bank for Reconstruction and Development (EBRD) said in a meeting with Prime Minister. Pavel Filip had a meeting with an EBRD delegation to Moldova that included Board Director for Switzerland, Ukraine Liechtenstein, Turkmenistan, Serbia, Montenegro and Moldova Heinz Kaufmann and Regional Director for Caucasus, Moldova and Belarus Bruno Balvanera.
● TUESDAY, October 25
Moldovan-Russian commission for commercial-economic cooperation to meet after five years
The joint commission for commercial-economic cooperation will meet in Moscow next month, after a pause of five years. Minister of Economy Octavian Calmac related what. «As regards the Russian Federation, I think we managed in 2016 to establish a high-level dialogue. I had three meetings with Russian Deputy Prime Minister Dmitry Rogozin. These enabled us to open discussions on this roadmap and we are sure that the joint commission for commercial-economic cooperation will convene in November, after a hiatus of five years. The commission is to sign the roadmap that was generally finalized in the last meeting with Rogozin,” stated the Deputy Prime Minster. According to Octavian Calmac, Moldova goes with three key messages for the Russian Federation to this meeting. The first is the elimination of customs duties imposed on Moldovan products. There are 19 categories of products subject to customs duties and these affected 85% of the exports to Russia. The second measure concerns the non-tariff measures applied to the Moldovan products – requirements towards alcoholic beverages, fruit and vegetables, lists of companies.
Octavian Calmac about financing that will be unblocked by new agreement with IMF
The signing of a new agreement with the International Monetary Fund will unblock the external financing intended for Moldova, which will support the national budget. About US$ 70 million and approximately €50 million will be disbursed at the first stage alone, Minister of Economy Octavian Calmac. “We reached a staff-level agreement in July. A series of preconditions, prior actions were set for the authorities. As the IMF representative said, we have a positive report produced by the team of negotiators. The Board will announce its decision as regards the new, three-year program with the Republic of Moldova, with all the related financing,” said the minister. Immediately afterward, the IMF will unblock the first tranche, followed by disbursements by the World Bank and the European Commission. “The IMF will provide about US$180 million, with the first tranche being of US$ 25 million. The World Bank will allocate US$ 45 million, while the European Commission €50 million. All these institutions launched the internal disbursement procedures,” stated Octavian Calmac.
Minister of economy: We have a proposal for those who work based on patent
Patent-based trade was a conception suitable for the 1990s, when the people didn’t have jobs. In the conditions of a modern economy, this type of trade is no longer appropriate. In his connection, the Ministry of Economy proposed a draft law that regulates independent commercial activities that will replace patent-based trade starting with 2017. Minister of Economy Octavian Calmac told about this. “We are yet dissatisfied with the paten-based trade. We see that this instrument was used by many traders to legalize products imported illegally or at a much lower value declared at customs posts. We submitted a proposal for patent holders – on the one hand, we extend the access of these individual entrepreneurs to more types of activity; on the other hand, we ensure correctness in taxing these. The common tax we suggest is of only 1% of the revenues,” said the official. These will be able to import goods that they will have to declare and the turnover was raised from 300,000 to 600,000 lei. When the level of 600,000 lei is passed, the payment of VAT becomes mandatory. “This enables them to interact with large business entities. The obligation to have cash register is the only inconvenience, but the price of this machine will be deducted from the taxes that are to be paid. In other words, the state will subsidize the purchase of the cash register,” stated the minister of economy.
Over 3,000 jobs to be created at Balti Free Economic Zone
More than 3,000 jobs will be created at the Balti Free Economic Zone. Two foreign companies, an Austrian and a German one, intend to extend their businesses in Moldova. While on a visit to the Balti Free Economic Zone, Prime Minister Pavel Filip said the Government will support the investment activities of the two companies. The visit started at the Austrian company Gebauer and Griller, which makes cables and wires for the automotive industry and telecommunications. The company’s administration announced the intention to increase the investments in Moldova. The Austrian investor will build a new cable factory on an area of about 10,000 square meters and will create over 500 new jobs. Representatives of the Austrian company said they need three key elements to develop their business – skilled workers, safe working conditions and support from the authorities.
Procedure for entering postal services market simplified
The National Regulatory Agency for Electronic Communications and Information Technology has announced that the entrepreneurs who intend to provide postal services can enter the market by a simplified procedure. They will have to only notify the Agency of the intention to provide postal services. The simplified procedure is called general authorization regime. Those interested can download a standard notification form that is available on the Agency’s official website. These can choose from among ten types of postal services.
● WEDNESDAY, October 26
Agriculture minister explains benefits of Rosselkhoznadzor office in Moldova
The reduction in costs of testing agrifood products that are to be exported to Russia and in logistic costs and Russian authorities’ greater trust in the safety of products imported from Moldova will be among the benefits of a branch of the Federal Service for Phytosanitary and Veterinary Surveillance of Russia (Rosselkhoznadzor) in Moldova. Minister of Agriculture and Food Industry Eduard Grama developed the issue in the talk show “Yellow code” on 10TV channel. The official said warmer relations have been now established with Russia. In this connection, in the last discussions with his Russian counterpart, Eduard Grama proposed opening a branch of Rosselkhoznadzor in Moldova. The minister noted he would like a local office of Rosspotrebnadzor to also be opened in Moldova, but this is a separate body and he was unable to raise the issue during his last visit to Russia. The reduction in certification costs will be the first noticeable benefit of the opening of a branch of Rosselkhoznadzor. Today all the Moldovan producers that export to Russia are subject to double certification, initially in Moldova and then in Russia. Eduard Grama said that if there was a local office of Rosselkhoznadzor in Moldova, the certification costs would be diminished. Also, less money and time will be spent on product check and the waiting time in customs will be significantly reduced.
Neither producers nor consumers gain as a result of higher agricultural output
Even if agricultural production increased by about 20% in the first nine months of this year, producers gained only quantitatively, not yet in terms of money. UniAgroProtect chairman Alexandru Slusari has told that the rise in agricultural output didn’t lead to a reduction in the prices of agrifood products for end users, as it is normal to happen. “I see the prices for agricultural producers decreased, but the prices for consumers didn’t change, which is the whole profit margin is collected by intermediaries,” stated Alexandru Slusari. According to him, there was drought last year and the crops of the second group, like sunflower, corn, soybean and beet, were affected a lot. The weather conditions this year were better. The significant precipitation in spring allowed the farmers to collect a better harvest than last year.
Share of bad loans has increased, central bank
The share of bad loans (substandard, dubious and compromised) in the first nine months of this year rose by 5.8% compared with the end of the previous year, representing 15.8% per sector on September 30. The given indicator varies from bank to bank, the highest value being 32.9%. The highest rises in the share of bad loans were recorded at the banks that are under intensive (special) supervision, namely “Moldova - Agroindbank”, “Moldindconbank” and “Victoriabank”, IPN reports. According to the reports presented on September 30, “Moldindconbank” and “Victoriabank” didn’t obey the highest limit of 15% set by the National Bank and this thus asked that the banks take measures to comply with the requirements. The central bank established there is a risk that the capital in some of the banks may be insufficient for covering potential losses if the quality of assets continues to worsen.
● THURSDAY, October 27
List of capital investment projects extended
The Cabinet approved the extension of the list of capital investment projects intended for state authorities. The projects financed with money provided by the development partners as sector budget support will also be included as capital investment projects in the state budget. These projects include the grants, foreign loans intended for the construction, renovation, extension or reconstruction of buildings and public facilities. The made changes are expected to lead to an increase in the number of capital investment projects. The given adjustment is one of the conditions of the World Bank’s financial assistance program for ensuring efficiency and transparency in the area of public capital investments.
2016 road fund distributed
The Cabinet on October 26 approved the program to distribute the 2016 road fund. The largest part of the fund, 755.7 million lei, will be used to cover the costs associated with the maintaining and repair of national and local public roads. A sum of 96 million lei will go on current road maintenance, while 60 million lei will be spent on cleaning roads in winter. Almost 230 million lei will go to repay the debts related to works to build and repair roads executed in 2015.
Romania to offer €550,000 to Moldova for Ungheni-Chisinau gas pipeline
The Cabinet approved a decision to sign the cooperation program for 2016, which defines the legal procedures for the allocation of money for building the Ungheni-Chisinau gas pipeline by the Romanian side. The Government of Romania will provide €550,000 in grant assistance to Moldova. The Ungheni-Chisinau gas pipeline is an extension of the Iasi-Ungheni pipeline that interconnects the natural gas transportation systems of Romania and Moldova. The money will be disbursed based on the agreement signed in Bucharest in April 2010, concerning the implementation of the program to provide technical and financial assistance to the value of €100 million to Moldova.
Assistance for owners of farmland located beyond Ribnita-Tiraspol road
The Government will allocate about 8 million lei from its reserve fund to the executive of the Dubasari District Council for providing assistance to the owners of farmland situated beyond the Ribnita-Tiraspol road. For its part, the Dubasari District Council will distribute the allocated money, by 1,229 lei per hectare, to the given farmland owners, based on regulations worked out and approved by the Council in coordination with the State Chancellery and the Ministry of Agriculture and Food Industry.
Direct flight from Chisinau to Krasnodar
The airline Air Moldova is launching the direct flight Chisinau – Krasnodar on October 28. This will be operated four times a week by an Embraer aircraft. In a press release, the airline says the takeoff in Chisinau on Tuesdays and Fridays will be at 7am, while landing in Krasnodar at 8:40am. The same days, takeoff in Krasnodar will be at 9:30am, while landing in Chisinau at 11am. On Wednesdays and Saturdays, the flight will leave Chisinau at 8pm and will land in Krasnodar at 9:40pm. The same days, the plane will depart Krasnodar at 10:30pm and will arrive in Chisinau at 00.10am. According to Air Moldova, one-way tickets for this flight cost €69 and up, with all taxes included.
Central bank revises down inflation rate for 2016
The annual rate of inflation in the third quarter of this year was by 3.4% lower compared with the second quarter. In September, the inflation was 3%, the governor of the National Bank of Moldova Sergiu Cioclea told a news conference. The governor said the decline in inflation is due to the modest demand on the domestic market and the temperate reduction in food prices. Also, the prices of regulated services, such as fuel, were by 2% lower than in September 2015. These factors allowed the average value of inflation to decrease from 7.4% in June to 3% in September. According to Sergiu Cioclea, the disinflation trend will continue owing to the poor economic activity, under its balance level. Thus, the average inflation this year will be 6.3%, down 0.4 percentage points from the August forecast. For next year, the National Bank forecasts an inflation rate of 4.6%, down 0.2 percentage points from the previous forecast. The governor said the reduction in the base rate on loans, the last time from 9.5% to 9%, is a precondition for the economic recovery to occur faster. But the monetary policy decisions cannot have an immediate impact on the economy. As to the large share of bad loans, Sergiu Cioclea said this is also a consequence of the economic stagnation. The central bank will study the European experience and instruments for improving this indicator. On the other hand, if the volume of bank loans is higher (in case of sustained economic activity), the share of bad loans is lower.
