ECO-BUS WEEKLY DIGEST August 30 – September 5. Most important Economy & Business news by IPN
● MONDAY, August 30
Duty exemptions for raw materials imported from Ukraine
Under the existing preferential regime, domestic producers will be able to import, free of duty or with reduced customs duty, raw materials and components from Ukraine for manufacturing in Moldova and subsequent exporting of the end product to EU Member States, accompanied by certificates of Moldovan origin. The preferential regime has been provided for in the Protocol on the Amendment of the Free Trade Agreement between the cabinets of Moldova and Ukraine. The document was signed at the end of last week by Prime Ministers Natalia Gavrilița and Denys Shmyhal. "This protocol reconfirms the willingness of the two countries to mutually contribute to the development of bilateral trade-economic relations. The document will facilitate investment and encourage the business environment to take full advantage of the existing trade regime with the EU", Prime Minister Natalia Gavrilița was quoted as saying in a cabinet press release.
Domestic nut production 55% up in last five years
Domestic nut production has increased by 55% over the course of the last five years, which places Moldova among the main nut producing countries. Over the last five years, the contribution of the food industry and agriculture to GDP has accounted for more than 20%, providing about 45% of the total volume of exports, while employing more than 30% of the workforce. A Ministry of Agriculture, Regional Development and Environment press release reads that while the share of value-added agriculture and employment has declined over the years in Moldova, the nut sector has continued to be an engine of economic growth and a means of poverty reduction. According to National Bureau of Statistics data, there are a total of 34.7 thousand ha of nut crops, of which 20.90 are orchards. Compared to 2018, the area used for nut cultivation has increased by about four thousand ha.
● WEDNESDAY, September 1
Ministry of Economy considers new restrictions for hospitality industry
The employees and visitors of the units of the hospitality industry will have to present at least one confirming anti-COVID-19 document when entering the units. The measure was proposed by the Ministry of Economy and is aimed at avoiding a possible lockdown and crowdedness in units that provide services to the general public, IPN reports, quoting a press release of the Ministry. In a meeting of Minister of Economy Sergiu Gaibu and representatives of the business community, primarily of trading units and public eating places, the official said the persons working in the hospitality industry and trade will have to present either a COVID-19 vaccination certificate or the negative result of a RT-PCR test done within 72 hours or of an antigen test done within 48 hours. Also, the manager of the public eating place will decide whether to declare the place “COVID free” for visitors to present a document concerning immunization or presence of antibodies or a negative COVID-19 test result or the place will work at reduced capacity.
NAER amends methodology for calculating fuel prices
The National Agency for Energy Regulation (NAER) on September 1 modified its previous decision by which it set profit margins on the wholesaling of the main oil products and the retailing and wholesaling of liquefied petroleum gas and also modified the profit margin on the retailing of the main oil products, this being renamed “specific profit margin”. The specific profit margin was recalculated according to the earlier agreed principle, except for the value of the efficiency index of the oil products market that was renamed “optimization coefficient” that, according to the new legal provisions, cannot exceed 10% of the weighted average of the specific profit margins of the oil market operators. The goal is to establish a balanced market model built based on the interests of consumers and of oil companies, primarily small ones. The highest optimization coefficient of 10% for the second half of 2021 will be 2.62 lei/liter, stated NAER. The Agency also said that the draft decision is urgent in character and has immediate effects. Starting with September 2, until midday, NAER on its website will publish the highest retailing prices of the main standard oil products, which will represent a ceiling for all the filling stations of Moldova.
● THURSDAY, September 2
Ion Chicu: Current Government remains hostage to electoral promises
The management of public finances is defective, said former Prime Minister Ion Chicu, referring to the Gavrilița Government’s intention to increase the minimum pension to 2,000 lei. The ex-Premier believes that the insistence with which this bill is promoted shows that the current executive remains hostage to the electoral promises. Under a bill proposed by the Ministry of Labor and Social Protection, which was already debated publicly, the minimum old-age pension as from October 1 will be 2,000 lei. Starting with October 1, the pensions will be indexed by 3.86%. According to Chicu, the current Government risks remaining trapped in debt if these raises are covered with foreign loans. “The Government is hostage to the electoral promise to raise the minimum pension to 2,000 lei and therefore started to change the rhetoric by saying that only some persons will enjoy raises. The cost of the rise in the minimum pension is of 2.8 - 3 billion lei a year. At the current stage, they cannot identify this sum at internal level and will have to borrow money. This is not a rational decision in the management of public finances. We risk accumulating debts that will grow annually,” Ion Chicu stated in the talk show “Natalia Morari’s Politics” on TV8 channel.
Termoelectrica extends 2021 campaign “Pay in winter, to be rewarded in summer”
Termoelectrica has announced the extension of the period of the campaign “Pay in winter, to be rewarded in summer”, within which the most responsible consumers are awarded, until September 17. All the apartment buildings that do not have debts for heat and take part in the campaign benefit from free hydro-pneumatic washing and pressure testing works on the heating installations of the building, performed by Termoelectrica. “We call on all the housing sector managers to mobilize together with the dwellers so as to take part in the campaign and to benefit from free hydro-pneumatic washing and pressure testing works on the internal heating systems, until the end of September,” said Termoelectrica director general Veaceslav Eni, being quoted in a press release. The campaign is open to all those who fully paid for current consumption and do not have or cleared the debts for heat and hot water. The building managers can file an application in free form to the local office of Termoelectrica, to the Customer Relations Center situated at 6 T. Vladimirescu St or through cancelaria@termoelectrica.md until September 17.
● FRIDAY, September 3
Prices of gasoline and diesel fuel this weekend
The National Agency for Energy Regulation set the highest retail prices of the main standard oil products for September 4-6. Gasoline COR 95 will cost at most 20.23 lei/liter, while diesel fuel – 16.42 lei/liter. The prices set for the reference period were influenced by the rise in the average selling price of oil products at the main international stock exchanges. The Platts quotations grew during one day only – by 36.75 $/tonne of gasoline and by 22.25 $/tonne of diesel fuel, the Agency said in a press release. The reference price ceilings on September 2 were: gasoline COR 95 – 20.07 lei/liter, while diesel fuel – 16.27 lei/liter.
Services provided by Public Services Agency will be cheapened, director
The Public Services Agency is reviewing the tariffs of a series of its services that were earlier raised. According to the Agency’s director Mircea Eșanu, the tariffs of over 265 services are now under revision. In a press briefing, Mircea Eșanu said the initial tariffs used before the Chicu Government raised them will be restored in the immediate period, at least for the services available at ordinary periods of time. For example, the registration of marriages will be again free of charge, while the registration of motor vehicles will cost 400 lei, down from 600 lei at present. The director noted they have proper cooperation relations with the Deputy Prime Minister for Digitization and ensured that 31 services can be already provided through M-delivery.
Fagura attracts €340,000 in investments on Seedrs, prepares for expansion in Romania
The startup Fagura.com, a fintech project from Estonia, launched and tested in the Republic of Moldova in early 2019, announces that it has successfully achieved the goal of attracting investments of €340,000 on the crowdfunding platform Seedrs.com. Over 270 investors have declared their support for the project and their trust in the team, investing amounts from 100 to tens of thousands of euros. As a result, Fagura offered investors about 14.5% equity at a pre-money valuation of €2 million. The funds attracted in this round of investments will be used for growth in the Republic of Moldova and expansion on the Romanian market by the end of this year. In a press release, Fagura says the crowdfunding campaign took place in two stages, the private one - where investors from the local community invested primarily and the public one - open to investors from all over the world. Tudor Darie, CEO Fagura, said that in this round they wanted to attract not only the money they need, but also the support of the investor community on Fagura. “The result was above the most optimistic expectations. Investors from more than 20 countries with a lot of experience in IT and banking joined us on our path. We will think of a mechanism to allow investors to contribute in our start-up with their ideas. We are preparing the legal documents for licensing and launching on the Romanian market,” he stated.
Moldovans in economic digitization rankings
A study of the level of digitization of the member states of the CIS, BRIKS, OECD was presented in the Economic Forum held in Vladivostok. In the rankings, Russia is placed 27th. Among the other CIS states, the providers of information mentioned only the countries with a rating lower than Russia’s – Uzbekistan, Kirghizia, Tajikistan and Turkmenistan that are at the end of the 51-state rankings. Instead, the digitization level of the Republic of Moldova is shown in the updated rankings of the international insurance company Euler Hermes. The Republic of Moldova is ranked 68th out of 115, having a median position among the Associated Trio (Ukraine – 63rd, Georgia – 71st). Another neighbor of Moldova, Romania, takes the 55th spot, being outstripped by Bulgaria (58th). Among Moldova’s CIS partners, Russia has the best digitization index (42nd), being followed by Kazakhstan (51st), Armenia (75th), Kyrgyzstan (91st) and Tajikistan (97th).
Preferential tariffs for postal services annulled
The rules concerning the tariffs for postal services were modified, the prices being fully liberalized. A draft decision to this effect was approved by the Cabinet on September 3. Under the new provisions, all the postal service providers will have equal rights and obligations and the tariffs for postal services will be applied uniformly all over the country’s territory. Until September 1 this year, the universal postal service provider “Moldova’s Post Office” benefitted from preferential tariffs, the other postal operators having the obligation to set a tariff that was at least three times higher than the preferential tariff. There were approved minimum requirements concerning the laying out of areas offered by service providers in places of international postal exchanges. This way, the postal service providers will be able to subject international post to customs control in areas laid out according to requirements. Of all the 57 postal service providers registered in Moldova, only 12 have places of international postal exchanges and a period of six months is offered to them for setting up such places according to the new requirements.
● SATURDAY, September 4
NBM takes measures to mitigate proinflationary risks
The Executive Board of the National Bank of Moldova (NBM) decided unanimously to increase the base rate applied to the main short-term monetary policy operations by 1.0 percentage points up to 4.65 percent annually. At the same time, the interest rates on overnight loans and deposits will increase by 1.0 percentage points - up to 7.15 and, respectively, up to 2.15 percent annually. The required reserves ratio remains unchanged. The NBM’s decision was taken considering the inflationary pressures from the supply and aggregate demand, as well the risks and uncertainties caused by the evolving pandemic situation. The Executive Board concluded that the risk of a persistent inflationary process prevails for the first half of the forecasting round. As estimated, inflationary pressures will continue in the coming period, supported by increases in household income (payroll, social assistance, remittances etc.) and rising consumer and mortgage credit volumes in the context of incentive monetary conditions that support consumption to the detriment of saving.
