● MONDAY, July 2
IMF: Moldova’s economy continues to strengthen, but risks remain
The IMF-supported program for Moldova is generally implemented in accordance with the agreed parameters, with the plenary involvement of the authorities, said the Executive Board of the International Monetary Fund (IMF). The program remains broadly on track with strong ownership and the economy continues to strengthen, but risks remain. Robust GDP growth in 2017 was driven by strong domestic demand and a positive external environment. Policies remain focused on cleansing the financial sector, ensuring sustainable and growth-friendly fiscal policy, and transparency in the energy sector, IPN reports, quoting a press release of the IMF. On June 29, the Executive Board of the IMF completed the Third Reviews under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) Arrangements for the Republic of Moldova and approved the request for modification of performance criteria. Completion of the review makes available SDR 24 million (about US$33.8 million). The ECF/EFF arrangements in a total amount of SDR 129.4 million (about US$178.7 million, or 75 percent of the Republic of Moldova’s quota) were approved on November 7, 2016.
New sorts of strawberry and raspberry to be tested in Moldova
Two agricultural producers from Moldova will test sorts of strawberry and raspberry brought from the United States for diversifying the range of existing sorts that meet the market requirements. The plantlets were supplied by nurseries based in California and Massachusetts with the support of the USAID High-Value Agriculture Project. According to a press release, the sorts imported for being tested become ripe early and late. The extension of the variety of sorts will offer the farmers the possibility of selling berries during a long period of time and to become more competitive on the market. The imported strawberry sorts include two varieties with high productivity in May-June – Camarosa and Ventana – and two varieties that yield fruit throughout the year – Monterey and Portola. There are also tested three sorts of summer strawberries – Latham, Nova and Killarney – and a sort of raspberry that yields fruit until late autumn – Caroline.
Japanese investors to be encouraged to initiate contacts with partners in Moldova
The Japan External Trade Organization (JETRO) is to have close cooperation relations with similar institutions of the Republic of Moldova in order to encourage investors in Japan to initiate systemic contacts with partners in Moldova. The cooperation initiative was launched in a meeting of Minister of Foreign Affairs and European Integration Tudor Ulianovschi and JETRO executive vice president Naoyoshi Noguchi in Tokyo. According to a press release issued by the Ministry of Foreign Affairs and European Integration, the interlocutors also discussed Moldova’s presentation at the business event that will take place in Bucharest this November. At this event, the JETRO will ensure the participation of over 20 Japanese companies that represent different sectors of the economy. The sides underlined the utility of presenting the success stories of Japanese investors in Moldova’s free enterprise zones – Fujikura and Sumitomo.
Amounts collected into national public budget 16% up in six months
The sums collected into the 2018 national public budget under the management of the State Tax Service in the first half of this year came to 18.16 billion lei, up 2.56 billion lei or 16.4% compared with the corresponding period last year. A sum of 8.24 billion lei was collected into the state budget, which is by 1.31 billion lei or 18.9% more than in the same period of 2017. The amounts collected into the local budgets totaled 1.94 billion lei, an increase of 233.7 billion lei or 13.7% on 2017. The state social insurance budget revenues added up to 6.09 billion lei, which is by 782.9 million lei more (+14.8%) on 2017. A sum of 1.88 billion lei was collected into the mandatory health insurance funds, up 237.6 million lei (+14.4%).
● TUESDAY, June 3
IMF loan is a reasonable and accessible instrument, opinion
The most recent loan tranche provided by the International Monetary Fund to Moldova is a reasonable and accessible instrument for the country. Furthermore, the loan cannot be given to unstable countries, said experts invited to the talk show “Issue of the day” produced by Canal 2 channel. Director of the Resource Center for Human Rights Sergiu Ostaf said the IMF loan is a reasonable and accessible instrument. There are two very clear and important aspects in this regard. First of all, the National Bank of Moldova maintains the stability of the Moldovan leu with these financial resources. The reforms done in the financial-banking sector are the second aspect. Political commentator Andrei Andrievschi said the IMF does not cooperate with unstable regimes and with the states where there is no stability as this is not a charity organization and this does not donate money and does not invest it in countries that later cannot pay the money back. The IMF scrupulously examines all aspects before providing the loan.
Moldovans have relatively poor motivation to pay taxes, “Expert-Grup”
In the Republic of Moldova, the fiscal morality that shows the people’s inclination to pay taxes has one of the lowest levels in the region. In an commentary, expert of the independent think tank “Expert-Grup” Alexandu Fala says that according to the estimates for 2014, the average fiscal morality score was 2.82. This shows that compared with other countries of the region, the population in the Republic of Moldova has a relatively poor motivation to pay taxes. According to the expert, corruption influences fiscal morality, affects the citizens’ attitude towards paying taxes and diminishes confidence in the tax administration system. Such manifestations of corruption as bribe taking and acceptance of undeserved benefits from the state also diminish the level of fiscal morality. The justification of the acceptance of unofficial salaries has the biggest influence on fiscal morality.
● WEDNESDAY, July 4
Air Moldova re-launches direct flights Chisinau-Kiev-Chisinau
The airline Air Moldova will re-launch the direct flights Chisinau-Kiev-Chisinau on August 1 this year. The flights will be operated daily by an Airbus 319 aircraft. According to the schedule, the plane will leave the Chisinau International Airport at 1:30pm and will land in Kiev at 2:20pm. The take-off in Kiev was set at 5:10pm, while the landing in Chisinau at 6:00pm. A one-way ticket costs €77 and up, with all taxes included. Air Moldova launched the Chisinau-Kiev-Chisinau flights in October 2015, but suspended them in January 2016. Air Moldova operates direct flights to 33 destinations in Europe, Russia and Asia.
Trips by train to Odessa to be more expensive as of July 12
The first and second class tickets on the Chisinau-Odessa-Chisinau train will be more expensive between July 12 and September 23. According to “Moldova’s Railways”, a second class trip will cost 161 lei, while a first class trip – 184 lei. Currently, the price of a second class ticket is 149 lei, while of a first class ticket is 157 lei. The price of a third class ticket remained 142 lei. Between May 31 and September 23, the Chisinau-Odessa-Chisinau train runs for four times a week, on Thursday, Friday, Saturday and Sunday. The train leaves the railway terminal in Chisinau at 6:57am and departs from Odessa at 6:45p.
Organizational structure of Energy Efficiency Fund to be reviewed
The managerial powers of the Energy Efficiency Fund (EEF) will be taken over by the Fund’s executive bodies – the Investment Committee and the Administration Board. A decision to this effect was approved by the Cabinet on July 4. Minister of Economy and Infrastructure Kiril Gaburici, when presenting the decision, said these amendments and supplements to the regulations make the blocking of the Fund’s activity owing to the possibility of choosing a manager, as now, impossible. The new provisions are designed to improve the process of selecting and financing energy efficiency projects and of using renewable sources of energy. The Fund’s waiting list now includes 46 projects proposals that were accepted for financing by the Administration Board, with a budget of 148 million lei. Their continuation and implementation is contingent on the operationalization of the EEF. The approved project envisions the extension of the investment recovery period from 7 to 11 years. According to the authorities, this will contribute to increasing the number of energy efficiency porjects financed by the EEF.
● THURSDAY, July 5
Domestic appliances to be sold with energy labels
A number of domestic appliances with excessive energy consumption will have to be labelled before they are put on sale. The regulations concerning the energy labeling requirements that were approved by the Cabinet on July 4 provide that the products will be placed on the market only together with a label showing the energy consumption. The regulations define the energy performance requirements for vacuum cleaners, heating devices and installation packages, including those with double function, temperature regulates and solar devices, water heating installations, hot water tanks and others. Under the regulations, the labeling requirements will help increase the quality of products, will reduce energy consumption and C02 emissions and will create fair competition conditions for producers, importers and suppliers of high-quality products.
Corruption in state institutions enables tax evasion, “Expert-Grup”
The widespread corruption in public institutions enables the business entities to avoid paying taxes and to escape punishment. Corruption is a barrier that prevents small entrepreneurs operating in the underground economy from starting to work legally. In a commentary centering on the shadow economy, expert of the independent think tank “Expert-Grup” Iurie Morcotylo said the vicious relations between corruption and the underground economy have intensified in Moldova during the past few years and represent a major challenge to the country’s sustainable development. Iurie Morcotylo said the shadow economy and corruption are closely related and fuel each other. According to official data, the share of the black market during the last few years was 22%-24% of the GDP, except for illegal production. The share of hidden production in the formal sector doubled in the last decade and tax evasion increased correspondingly and this is worrisome. The share of this component of the underground economy rose from 4% of the GDP in 2007 to 8% in 2016. “These worrisome tendencies reveal the ineffectiveness of the structural reforms and the business community and the unsuccessful efforts made by the authorities to fight corruption during the past few years,” stated the expert.
Government approves procedure for registering Transnistrian motor vehicles
The registration of motor vehicles with Transnistrian license plates for entering international road traffic will be performed by the Public Services Agency’s subdivisions in Tiraspol and Rybnitsa. The vehicles will be registered based on confirmative documents showing were the person lives and that this owns the vehicle, accompanies by an own responsibility statement concerning the accuracy of the information presented in these documents. The procedure is defined in a draft law that was approved by the Government. The bill refers to cars and trailers, motorcycles, scooters and bicycles with an auxiliary engine owned by private individuals with the domicile in the territorial-administrative units situated on the left side of the Nistru and in Bender municipality and by particular legal entities registered with the competent Moldovan authorities. The owners of such vehicles will be issued with neutral license plates without paying import duties and the mandatory payments set in accordance with the law on the population support fund.
Postage stamps “Discover Moldova” available from today
Moldova’s Post Office on July 5 put into circulation a series of postage stamps entitled “Discover Moldova”. The stamps contain the pictures of the Soroca Fortress and the natural-cultural reserve “Orheiul Vechi”. The face value of the stamps is 1.75 lei and 5.75 lei. These were produced in an issue of 200,000 copies each. The prototype was designed by Corina Levco. Corresponding envelopes will also be made available from today, by 300 pieces of each type. They will be sold for 14 lei and 20 lei.
Wizz Air to provide new flights as of September 15
As from September 15, the low-cost airline Wizz Air will operate flights to Copenhagen (Denmark), Dortmund and Memmingen (Germany), Brussels (Belgium) and Paris (France) from the Chisinau International Airport. In a news conference, Wizz Air said it decided to increase its fleet at the operational basis in Chisinau by an aircraft. Petru Jardan, director general of Avia Invest that manages the airport, said already two planes that belong to Wizz Air will operate flights from the Chisinau International Airport. Details about the new flights and their frequency will be provided in the immediate period. Minister of Economy and Infrastructure Kiril Gaburici said Wizz Air invested US$200 million in the Moldovan economy. Each new opened flight means greater competitiveness on the market, services of a higher quality and lower prices. Wizz Air commercial director George Michalopoulos voiced hope that the passengers will exploit the new destinations Dortmund and Memmingen in Germany to which no direct flights have been provided until now. In Brussels, flights will also be operated from the Charleroi airport, not only from the national airport. Ticket prices vary between €19 and €99. The used aircraft are 4.5 years old on average.
Costs of suspension of EU financing will be covered by people, “Viitorul”
The grants obtained by Moldova from outside this year will be under the forecast level. They will total at most 900 million lei at this yearend, as opposed to the planned 2.8 billion lei. Experts of the Institute for Development and Social Initiative “Viitorul” forecast that the revenues collected into the 2018 national public budget will rise based on taxes and social and health insurance contributions. According to the forecasts, the budget will be fulfilled this year, but this will be rather a survival, not a development budget. The Government will be able to pay pensions and salaries, but this will be the fourth consecutive year that the authorities limit investments in infrastructure. The Government manages to collect money into the budget at the people’s expense. For the second year in a row, the budget revenues are higher than the planned ones. Last year these were by 2.3 billion lei larger, while this year they are expected to be by 2.6 billion lei larger.
● FRIDAY, July 6
Financial situations of Ministry of Health reveal significant and permanent distortions, audit
The consolidated financial situations of the Ministry of Health, Labor and Social Protection, compiled on December 31, 2017, do not present a reliable and truthful picture, being accompanied by significant and permanent distortions at the Ministry and its subordinate institutions, shows an audit report by the Court of Auditors that was examined in a meeting on July 5. The audit covered the Ministry and 28 subordinate institutions where the Ministry acts as the founder. The audit showed the significant and permanent distortions were due to a number of factors. Among these are the non-registration of the used land (34.7m lei) and other administered assets (88.3m lei), differences in the value of real estate compared with the cadastral value (36m lei), keeping of a record of property that does not work, is demolished or over which the Ministry has no rights (16.1 million lei).
World Bank offers US$ 30m in financing to Moldova
The World Bank Group’s Board of Directors approved a US$ 30 million Economic Governance Development Policy Operation (EGDPO) for Moldova. EGDPO provides resources to help the Republic of Moldova reduce fiscal risks and level the playing field for private sector development, IPN reports, quoting a press release of the World Bank. “The approval of this financing is an acknowledgement of the recent reforms implemented in Moldova to enhance the pension system, increase functionality of the National Integrity Authority, strengthen banking sector governance, and improve the business environment, to name a few,” said Anna Akhalkatsi, World Bank Country Manager for Moldova. “We are committed to supporting the Moldovan authorities in further reforms that are needed to help businesses grow and create jobs for ordinary citizens.”
Assignment of concession of works and services to be regulated by new law
The method of assigning the concession of works and services will be regulated by a new law. This was adopted in the final reading by the votes of 53 MPs in the July 6 sitting of Parliament. The new provisions regulate the assignment of the concession of works and services, the legal regime applicable to these and aspects of the assignment and execution of concessions. These apply to the concessions whose length is at least five years, but not more than 35 years, whose estimated value calculated without VAT is equal or larger than 10 million lei for contracts for the concession of works and equal or larger than 5 million lei for contracts for the concession of services.
Wheat harvesting underway, productivity at 3.1 t/ha
The initiated winter wheat harvesting campaign showed the average productivity is 3.1 tonnes per hectare, which is under the last year’s average level of 3.7 t/ha. Contacted by IPN, Marin Grama, senior consultant at the Ministry of Agriculture, Regional Development and Environment, said the figures can yet change when the final harvest is assessed. The harvesting started a week ago and some 30% of the winter wheat has been gathered. It is not yet known the ratio of food wheat to fodder wheat. Currently, the yield is higher in the northern districts of the country. The official noted the heavy rain of the recent past affected the quality of wheat. Winter barley has been 45% harvested and the average productivity is 2.9 t/ha. The gathering of spring wheat and barley will start in at most two weeks.
