ECO-BUS WEEKLY DIGEST January 20-26. Most important Economy & Business news by IPN
● MONDAY, January 20
Premier Chicu says in what conditions cooperation with IMF can be continued
An eventual pause in the program with the International Monetary Fund (IMF) is not excluded if the imposed conditions are in the country’s interests. Negotiations are possible and the discussions with the IMF continue. In this connection, a mission of the IMF will come to Chisinau on January 22, Prime Minister Ion Chicu stated in an interview for RFE/RL’s Moldovan Service that is quoted by IPN. The official said that several days ago he had a meeting with the IMF Resident Representative in Moldova Volodymyr Tulin. They discussed their views on the program that ends on March 20 and the new program. “We will complete the given program. The first risk, as we said, is flexibility. The second risk is the IMF’s insistence on increasing domestic gas tariffs. If they insist, we will not continue the dialogue with the IMF. This is the position of the Government that assumed responsibility. I also answer for this,” stated Premier Chicu.
Contests to choose companies that will repair national roads announced
The contests to choose contractors that will repair national roads were launched through the electronic platform MTender. The process of choosing the winners is expected to end in March, Prime Minister Ion Chicu stated after a meeting with the President and Parliament Speaker. “We are now at the stage of receiving quotations,” stated Premier Chicu. He noted that the Ministry of Economy and Infrastructure in the immediate period will present a draft Government Decision for implementing the project to repair roads in localities in the framework of the Good Roads Project.
A series of reforms planned to be done at Chisinau Central Market
An internal audit is to be carried out at the municipal enterprise “Central Market” of Chisinau, Mayor Ion Ceban announced. According to him, a detailed analysis of the real situation at the market is needed given the reports about multiple violations committed there. “There is heaven on earth for many there. They rumor that some earn large revenues there and are not afraid of the authorities or the police. There are some interesting details. Persons were appointed there for particular purposes by someone who was earlier in power. There are persons who aim to mount protests on particular subjects, such as the ban on parking near the market,” Ion Ceban stated in the January 20 meeting of officials of Chisinau services and divisions.
Ion Chicu: Group will be constituted to monitor fuel prices
A group for monitoring the fuel prices will be set up under the auspices of the Deputy Prime Minister Sergiu Pușcuța, Minister of Finance. This will supervise the prices, but will also analyze the reasons on which the prices are based, Prime Minister Ion Chicu was quoted by IPN as saying in a news conference. The official said the fuel prices were anticipated to rise at the start of the year as the prices are adjusted to the new excise duties each year on January 1 or the next few days. Furthermore, the prices depend on the developments of the global oil markets. Moldova imports oil and the prices are generally formed on the international markets.
Industrial production 2.5% up in 11 months of last year
The gross industrial production in January-November 2019 was by 2.5% higher compared with the corresponding period last year following the 3.4% rise in the gross production in processing industry. The gross production in extractive industry decreased by 1.8%, while the gross production and supply of electric power, heat, gas, hot water and conditioned air declined by 2.4%. According to the National Bureau of Statistics, the industrial production in the first 11 months of last year rose by 2.3% on 2018 owing to the 1.3% growth in extractive industry and the 3% growth in processing industry. The production and supply of electric power, heat, gas, hot water and conditioned air decreased by 0.7%.
Mayor of Chisinau comments on request to raise minibus fares
Mayor of Chisinau municipality Ion Ceban said the rise in fares for trips by minibuses could be examined in perspective, but not today or tomorrow or even in half a year. According to him, the fares can be discussed only after the minibuses meet all the requirements, the timetable is respected and efficient connection with other types of public transport is ensured. After the January 20 meeting of officials of Chisinau services and divisions, when answering journalists’ questions, Ion Ceban said that he hasn’t yet seen the carriers’ request to raise fares. The situation is unpleasant for everyone. A large part of those who provide these services do not honor their commitments. The minibuses are in a bad state and cannot ensure safety.
● TUESDAY, January 21
Amounts collected by Customs Service into 2019 state budget 7% up
The Customs Service last year collected over 22.8 billion lei into the state budget, an increase of over 7% on 2018 and of over 12% on 2017, IPN reports, with reference to the customs authority. The Service said that in 2019 it initiated 123 criminal cases, with the smuggled goods being assessed at over 88 million lei, an increase of 14% compared with the sums reported in 2018.
Ion Chicu: There are reasons for terminating contract for concession of Chisinau airport
Prime Minister Ion Chicu said Avia Invest Company that manages the Chisinau International Airport gives reasons for the concession contract to be terminated. The data concerning the investments made by the company are now analyzed and the process of ending the contract could be initiated in a month. “The concession contract signed in 2013 offers the state minimal chances for terminating it. It’s good that the managing company gives us reasons for initiating the termination of this contract. The Public Property Agency is assessing the way in which Avia Invest has fulfilled its contractual obligations. The preliminary data show the company didn’t make investments at the initial and second stages, as the contract provided. This is a reason for termination. The Government will not accept this situation. We consider that damage was caused to the state. Thus, our actions will be aimed at having this contract terminated,” Ion Chicu said in the talk show “Emphasis on today” on TVR Moldova channel.
Central bank’s priorities concerning bank supervision for 2020
In 2020, the National Bank will continue to make effort to ensure prudential regulation through the exhaustive analysis of internal governance and internal control and risk management procedures and by assessing capital adequacy and liquidity. There are seven key areas on which the Bank will focus this year in the bank supervision process. In a press release, the Bank says that this year the banks are to present the first reports on the assessment of adequacy of internal liquidity, which will become a new component of the central bank’s supervision and assessment process. There will be assessed the solidity, efficiency and comprehensive character of the framework for managing liquidity and financing risks at banks.
Investments made in Chisinau airport are lower than it was pledged, Igor Dodon
The Avia Invest Company that manages the Chisinau International Airport, in accordance with the contractual obligations, was to make investments of €160 million by the end of 2019. However, it so far invested only €94 million, €59 million of which is the proceeds deriving from the tax of €9 paid by passengers. According to the authorities, the non-fulfillment of the investment plan can be a reason for terminating the contract with the managing company. “The Public Property Agency, the Government will notify the investor of the non-fulfillment of the investment commitments. Of the planned €160 million, €66 million hasn’t been invested. The sources of the €94 million are interesting. Of the €94 million invested by the company, €59 million represents taxes paid by passengers,” President Igor Dodon said after the January 21 meeting of the Supreme Security Council.
Informative brochures to contribute to financial education of population
The citizens will be informed how they can protect themselves from over-indebtedness to banks and nonbank institutions, how the financial system in Moldova works and how they can increase their revenues by own investments. The National Bank of Moldova, together with the National Commission for Financial Markets, launched a series of informative brochures to contribute to the financial education of the population, IPN reports, quoting a press release of the central bank. “Financial education is imperative as the financial products develop faster than the knowledge and skills of the people,” said National Bank governor Octavian Armașu, noting that helping to realize the risks posed by each financial product is the most powerful instrument that can be offered to the population for preventing financial crisis situations. “When we take out a loan, we should realize the related risks and to objectively assess our capacity to repay it,” stated the governor.
● WEDNESDAY , January 22
PM Chicu: Moldova became an importer of agricultural products
Prime Minister Ion Chicu said the Republic of Moldova turned from an agricultural country into an importer of agricultural products. Such a situation is serious and measures should be taken to develop this area, including by ensuring appropriate subsidization in the sector. The official said that he asked his colleagues from the Government to analyze the top ten positions of agricultural products imported by Moldova and the conclusion is that the country imports elementary products to the value of 2 billion lei. “Such a state of affairs should be changed,” Premier Chicu stated in the program “Moldova live” on the public TV channel Moldova 1.
Average interest rate on new loans released in lei at 8.37% last month
The new loans provided last December totaled 3.270,8 billion lei, an increase of 15.5% on December 2018. The loans released in national currency represented 64.2% of all trhe loans, those in foreign currencies – 31.2%, while those attached to the exchange rate – 4.6%. The average rate on new loans in national currency was 8.37%, in foreign currencies – 4.33%, while on those attached to the exchange rate – 4.18%. According to the National Bank of Moldova, the loans in national currency in December 2019 came to 2.099,0 billion lei, up 17.8% on a month before and 4% on December 2018. The loans released in foreign currencies recalculated in Moldovan lei added up to 1.021,9 billion lei, down 3.7% and up 33.3% respectively.
Over 460 companies to take part in “Made in Moldova 2020” exhibit
The 19th edition of the national exhibition “Made in Moldova” that was set for January 29 – February 2 will bring together over 460 national producers. The exhibition will include a collective stand of the entrepreneurs from Romania and the Republic of Bashkortostan of the Russian Federation. For the first time this year, the eco-products will enjoy a special arrangement. According to the president of the Chamber of Commerce and Industry Sergiu Harea, 19 collective stands for ATU Gagauzia and 18 district councils will be set up at this year’s exhibit. Over 460 national entrepreneurs will present their products and services in the three pavilions and in the open-air zone of the exhibitions center.
Moratorium likely on inspections at small and medium-sized enterprises
A moratorium on state inspections at micro, small and medium-sized enterprises could be instituted for a period of a year. The measure applies to fiscal, financial inspections, inspections to determine the quality of products and services and others. This is provided in a bill that was approved by the parliamentary commission for appointments and immunities. Bill author Alexandru Slusari said the MPs of the Party “Dignity and Truth Platform”, the Action and Solidarity Party and the Democratic Party voted in favor of the bill. “The provisions of the law implemented during a calendar year will ensure the entrepreneurs will not be subject to administrative control by the inspection bodies and to abusive actions taken in most of the cases by representatives of these bodies with the aim of fining enterprises and covering the financial gap created as a result of the bank fraud. The measure will help improve the investment climate,” stated the MP.
National Section at Expo 2020 Dubai has new General Commissioner
Moldova’s Ambassador Extraordinary and Plenipotentiary to the United Arab Emirates Victor Haruța was appointed as the General Commissioner of the National Section at Expo 2020 Dubai, IPN reports, quoting a Government decision. The decision is aimed at contributing to saving funds for the country’s participation in the world exhibition. The ambassador will coordinate the preparations and will not spend money on trips to Dubai.
MP Chicu suspects public funds are misused
Prime Minister Ion Chicu instructed the State Chancellery to present the list of employees of the Government, ministries and agencies managed by the executive who bought mobile phones, laptops and other expensive devices, especially last December, despite the warnings not to spend money for such purposes issued in one of the previous meetings. In another development, Premier Chicu said that information technologies should be extensively introduced in all the Government’s subdivisions. He reminded that the businessmen asked to extend the period of validity of the electronic signature from one year to two years. “We already did this, but the cost of the digital signature hasn’t been yet decided and representatives of the business sector complain about this,” stated the official, noting that the problem should be solved as swiftly as possible.
Savings and loan associations accuse NCFM of illegalities
Representatives of a number of savings and loan associations (SLAs) call on the President and prosecutor general to take attitude to the actions taken by the National Commission for Financial Markets (NCFM) in relation to the associations. They said the NCFM, by legislative manipulations, abuses particular ambiguous legal provisions and forces the associations that own shares in Rural Finance Corporations to concede these to the Central National Association at a price that is much lower than the real value of shares. In a news conference at IPN, executive director of the savings and loan association “Triumf” based in Tătărești village of Strășeni district Vasile Myrzenko said the Central National Association was founded by SLAs and its main duty is to represent and protect the interests of the associations. “In this case, it is hard for me to say that the Association focuses namely on this objective, to safeguard our interests. This, together with the NCFM, is attempting to dispossess us of shares in an unacceptable way,” he stated.
Cooperation in customs sector with the Netherlands to be intensified
The bill to ratify the agreement constituted by the exchange of notes on the extension of the applicability of the Agreement between the Republic of Moldova and the Netherlands on Mutual Administrative Assistance in Customs Matters, which was signed on June 19, 2006, for Aruba, Curaçao and Sint Maarten was approved by the Government and submitted to Parliament for consideration. According to the Ministry of Finance, the extension of the applicability of the agreement to these territories will strengthen Moldova’s relations with the Netherland in the customs sector. The final goal is to ensure the economic security of the signatory states. The agreement enables to exactly assess the import and export rights, to respect the prohibition measures, to combine forces against violations of the customs legislation of the parties and creates conditions for facilitating international trade.
● THURSDAY, January 23
Monetary base on the rise
The monetary base last yearend rose by 541.3 million lei or 1.2% on November to 46.851,0 billion lei. The rise against December 2018 was of 7.6%, IPN reports, quoting the National Bank of Moldova. The balance of deposits in national currency rose by 1.405,0 million lei to 40.183,8 billion lei, representing 60% of the total deposits. The balance of deposits in foreign currencies recalculated in lei increased by 266.9 million lei to 26.813,7 million lei, constituting 40%.
Over 1m tonnes of goods transported through Giurgiulești Port in 2019
More than 1 million tonnes of goods were transported last year through the Giurgiulești Free International Port. Of these, 57% were exported, while the rest were imported. Some 72% of the imports were from the EU, mainly from Romania. A terminal for conveying unbottled wine will be made available at the airport in the near future to boost wine exports and to extend the geography of these exports, Prime Minister Ion Chicu learned during a working visit to the port. Some 65% of the port’s shares are owned by the EBRD, while 35% by Danube Logistics Holding. The port employs over 470 persons. Approximately US$70 million was invested in the port’s infrastructure.
Only 25% of planned rehabilitation works at Wastewater Treatment Station executed
The rehabilitation works at the Wastewater Treatment Station in the municipality of Chisinau constitute about 25% of the 80% planned by this date. The contractor said the works are behind schedule owing to the shortage of skilled and unskilled labor force. Mayor General Ion Ceban instructed the administration of “Apă-Canal Chisinau” within two weeks to present a plan for overcoming the created situation. During a visit to the station, the mayor noted that the time limits weren’t met owing to bad management or bad intentions.
Inflation rate in Transnistrian region declines
The rate of inflation in the Transnistrian region last year was 4.7%, as opposed to 7% in 2018. According to the local ministry of economy, the slowdown in the rise of prices is even more visible compared with 2017, when the consumer price index was 11.8%. The Transnistrian administration said the rise in food prices was more prominent. At the end of 2019, the rate of inflation on this segment was 9.95%. Nevertheless, the rise is smaller than in 2018, when food prices increased by 13.03% on average.
● FRIDAY, January 24
Ion Ceban: Number of public transport units in Chisinau will be considerably increased
The number of vehicles in the public transport system of the municipality of Chisinau will be substantially increased by the end of this year, stated mayor general Ion Ceban. According to him, the Chisinau City Hall will bank on its own forces and will assemble trolleybuses and will buy more trolleybuses and buses, but will also accept assistance from foreign partners. In the talk show “Direct Access” on NTV Moldova channel, Ion Ceban said the strategy for building parking lots in Chisinau should be finalized. Also, there was launched an online platform of interaction with citizens, which focuses on two areas for now – waste and street lighting. The other modules are being deigned.
Fuel prices likely not to set by fuel sellers anymore
The effects of the modification of the method of regulating fuel prices are to be examined by the Ministry of Economy and Infrastructure, the Ministry of Finance and the National Agency for Energy Regulation (NAER) during a week. A request to this effect was made by Prime Minister Ion Chicu in the first meeting of the working group for the analysis and monitoring of fuel prices. “I don’t think it is right to allow business entities to form the prices of oil products. I do not want to influence the decision of the working group, but I ask you to carry out this analysis as a matter of urgency and to come up with proposals. The quotes for gasoline and diesel fuel decreased, the excise duties increased insignificantly, but the selling price of diesel was raised essentially. I ask you to determine where the economic operators hide a large part of the revenues,” stated Premier Chicu, being quoted by the Government’s press service.
Tender contests to rehabilitate 170 km of road to be announced by spring
Tender contests for the rehabilitation of about 170 km of roads will be announced by spring. The costs of works exceed 3.5 billion lei. Tender contests to repair over 180 km of roads have been launched so far this year, with the costs of works being assessed at 2.2 billion lei, Minister of Economy and Infrastructure Anatol Usatyi was quoted by IPN as saying in a news conference. Anatol Usatyi noted that the Ministry since the start of this year has launched tender contests for the rehabilitation of the R13 Bălți-Florești, G50 Florești-Nicolaevca-Sângerei, R26 Mihailovca-Cimișlia, R30 Căușeni-Ștefan Vodă, R31 Tudora-Palanca and other roads. A tender contest was announced for the modernization of Sector 3 of the belt road of Chisinau municipality. The tender contest to repair Sector 2 of the same road is to be launched in the near future.
Currency transfers from abroad on the rise
Money transfers from abroad in favor of individuals through licensed banks last December came to a net value of US$108.03 million. The figure is by slightly over 12% higher than in December 2018. Transfers from the EU represented 46.3%, from the CIS - 21.4%, from the rest of the world – 32.3%. According to the National Bank of Moldova, transfers from Russia totaled US$21.93 million or 20.3%, from Israel – US$ 20.74 million or 19.2%, from Italy – US$13.12 million or 12.1%, from other states – under 10%.
Court of Auditors: Concession of airport is an equation with many unknowns
“Owing to the lack of explicit provisions in the concession contract, it is impossible to determine the value that is to returned to the state for the conceded assets when the contract expires or is terminated,” says the Court of Auditors’ audit report on the compliance of the signing and implementation of the provisions of the public-private partnership contract for the concession of the assets of the state-run Chisinau International Airport that was presented in a public meeting. The audit team of the Court of Auditors underlined a series of irregularities that created this situation, starting with the feasibility study conducted by the Public Property Agency, which anticipated the concession of assets. The study didn’t fully cover the standards and conditions for choosing the private partner.
● SATURDAY, January 25
Parcels belonging to “Moldexpo” are leased out at derisory prices, press club
The plots that belong to the international exhibitions center “Moldexpo” are leased out at derisory prices and this influences the annual revenues of the center. The business entities that rent parcels do not hurry to pay for this service. As a result, debtors’ debts to “Moldexpo” last yearend totaled over 12 million lei. Of these, over 5 million lei are debts older than three years. The subject was discussed by members of the Economic Press Club in a meeting with “Moldexpo” director Irina Ghilfanova. According to Irina Ghilfanova, 17 companies rent plots on the territory of “Moldexpo” that are over 5 ha in area. These parcels are also located under privately owned constructions and around buildings. Rental for a square meter of land is 3.48 lei a year and up. This is not a market price, but it could be modified if the plots are reevaluated and the payment is raised to the level of market prices. The Public Property Agency planned a reevaluation, but this is to end in 2023.
Food safety watchdog bans import of poultry from Vinnitsa
The National Food Safety Agency of Moldova decided to temporarily restrict the import of domestic and farm fowl and poultry from Ukraine’s Vinnitsa region. The measure is imposed in connection with an outbreak of highly pathogenic avian influenza in this region, IPN reports, quoting a press release of the Agency. The food safety authority noted that the ban on the import of fowl and poultry took effect on January 24.
Improvement of legal framework didn’t lead to attenuation of energy poverty, study
The legal framework in the energy sector was improved in 2016-2018, but this didn’t determine progress in attenuating energy poverty, says a study entitled “Energy poverty in Moldova: social assistance versus technical capacity” that was carried out by the Independent Think Tank “Expert Grup”. According to the study, the recently adopted legislation laid emphasis on the liberalization of the energy sector, corrections and balancing of positions of different sides interested in the market and stimulation of energy efficiency measures. The implementation of the community acquis in a move to harmonize the national legislation with the legislation of the EU and the Energy Community created conditions for the functioning of the regulatory framework and for a more sustainable development of energy infrastructure.
Labor Code should be modernized, employers
The shortage of labor force is now one of the problems faced by business entities in different areas, as representatives of employers asserted. In a meeting with Prime Minister Ion Chicu, these underlined the necessity of regulating state inspections and of modernizing the Labor Code, IPN reports, quoting the Government’s press service. Representatives of the National Employers Confederation of Moldova stressed the importance of consolidating public policies in the field of constructions within one ministry. According to them, the budgetary-fiscal policy should be decided for a long term. Among other discussed subjects were the meal vouchers, the entrepreneurs’ patent, holding of public tender contests, taxes in the hospitality industry and the justice sector reform.
