ECO-BUS WEEKLY DIGEST March 7-13. Most important Economy & Business news by IPN
● MONDAY, March 7
Aviation authority to organize irregular flights for Ukrainian refugees
The Civil Aviation Authority will organize irregular flights on a commercial basis for refugees coming from Ukraine and intending to migrate further. Those interested are encouraged to register by filling out an online form on the AAC website. Registration can be also done by phone at 022823500 and 022823587 from 8AM to 6PM. The requests will be processed in a database that will provide real-time information enabling the organization of evacuation flights as soon as available. Once at least 150 people have registered for a certain destination, the Civil Aviation Authority will call bids from airlines to perform the evacuation flight.
Beekeepers expect decline in harvest this year
Insufficient rainfall and high diurnal temperature variations are likely to affect flowering and consequently honey production as well as the wellbeing of bees, Ion Maxim, president of the National Association of Beekeepers, has told IPN. “It could be exactly like 2020, which was a dry year. If humidity levels are low, flowers will not produce enough nectar and the bees won’t have much to collect. If daytime temperatures continue to stay at +10 degrees or more, while nighttime temperatures continue to fall to -5 degrees, the bees will not be able to develop properly in terms of honey production. In 2020, trees had flowers, but the harvest was compromised, because it was cold and the bees could not fly to pollinate and collect nectar”, said Ion Maxim. To sustain bee families through cold spells, beekeepers incur additional costs. “Whereas in previous years we started stimulation on March 10-15, this year we started intervening on February 10-15. This means additional costs. At the same time, it is unclear how the trees will bloom this year. If bees sense a food shortage when they lay their young, they stop reproducing and the development of their families stagnates. If the weather doesn’t warm up soon, there will not be many young bees, and they will not be able to collect nectar from acacias, from which most of the honey comes”, says Ion Maxim.
Fuel prices rise to new record highs
Starting Tuesday, the maximum regulated price of 95 gasoline at the pump will increase to 25.69 lei a liter, up 0.43 leu on the previous update, and a liter of diesel fuel will sell for a maximum of 23.11 lei (+0.72 leu). The regulatory agency ANRE, which updates the maximum retail prices periodically, says the upward trend continues to be driven by the “tragic events” in Ukraine. The “current regional context” affected traditional supply chains connected to Russia, Belarus and Ukraine, prompting suppliers to look elsewhere, says ANRE. Some networks are expected to experience “short-term” shortages at the pump as they establish new connections in the west. “But it is worth noting that this is not a systemic phenomenon and will not affect filling station networks that traditionally obtain their fuels from Romania”, the agency said in a press release.
● WEDNESDAY, March 9
Andrei Spînu: Contract with Kuchurgan Power Plant will be extended only for a month
The contract for the purchase of electrical energy with the Kuchurgan Power Plant will be extended for a month, not for a year as it was agreed earlier. Deputy Prime Minister Andrei Spînu said that owing to the war in Ukraine, there is unpredictability as to gas supplies and the plant therefore refuses to sign the one-year extension contract. Andrei Spînu, Minister of Infrastructure and Regional Development, said that in March the Government will subsidize the cost of electrical energy produced by thermoelectric power plants (CETs) so as to cover their losses. This means the electricity tariffs will remain unchanged in March. By the end of this month, the National Agency for Energy Regulation will agree the new tariffs that will take effect on April 1. “We had discussions with representatives of the Kuchurgan Power Plant so as to extend the contract for one more year. The war changed the situation and we will be able to extend the contract for one more month only, until May 1. The reason is the uncertainty related to gas supplies. The new tariffs will be approved before April 1 and the rise will not be significant. There are no reasons to double the tariffs. We will yet have discussions with representatives of the Kuchurgan Power Plant so as to see if we can return to the decision to extend the contract with the same tariff for a year, which was taken before the war,” Andrei Spînu stated in the talk show “The Fourth Estate” on N4 TV channel.
BCS MPs seek annulment of corn export ban
The MPs of the Bloc of Communists and Socialists (BCS) requested the Government to lift the ban on the export of corn as the farmers need to get ready for the sowing campaign. MP Radu Mudreac in a press briefing reminded that the executive imposed a ban on the export of wheat, corn and sugar for a period of 60 days, while the state of emergency is in force, arguing there is a shortage of such products. “At the same time, last year Moldova obtained a record corn harvest of 2.8 million tonnes. The average internal annual consumption of corn in the Republic of Moldova does not exceed 900,000-950,000 tonnes. Moldova has about 1.8 million tonnes of corn that can be exported. This is an opportunity for farmers to obtain financial resources for preparing for the spring campaign given that the fuel and seed prices rose twofold already, while pesticide and herbicide prices grew three-four times,” stated Radu Mudreac. The Socialist MP said a large quantity of corn remained in the fields. “The corn cannot be exported owing to the ban and also cannot be stored as it needs to be dried for the purpose. Given that the gas prices increased, the final cost of production will rise significantly. As the farmers have limited drying and storage capacities, they risk losing the corn, primarily the corn harvested the last few months or that was left in the fields,” said Radu Mudreac.
Diesel fuel and gasoline prices up again
Fuel prices rise again after growing significantly two days ago. Gasoline “95” as from March 10 will be sold for 26.68 lei/liter, up 1 leu, while diesel fuel for 25 lei/liter, up almost 2 lei. The National Agency for Energy Regulation said the regional economic developments caused by the situation in Ukraine have a significant impact on the prices of petroleum and its derivatives. During the first eight days of this month alone, the Platts quotations grew by 278 US$ per tonne of gasoline, which is the fastest rise on the oil products market. Such an evolution leads to an unprecedented rise in fuel prices, especially in states like the Republic of Moldova, which fully satisfies its fuel needs with imports. For comparison, a liter of gasoline “95” at the start of September cost 20.23 lei, while a liter of diesel fuel –16.42 lei.
NBM urges citizens to get informed from official and credible sources
The National Bank of Moldova (NBM) urges citizens to inform themselves from official and credible sources so as to avoid taking immediate decisions, which can be rash due to emotions. Accurate information about the banking sector can be found on the NBM’s website and also in the websites of the 11 licensed banks of the Republic of Moldova, which also provide details concerning up-to-date foreign exchange operations. NBM confirmed that the banking sector of the Republic of Moldova remains strong and has large currency reserves, including in EUR and USD. Also, the country has foreign exchange reserves to ensure financial stability in the event of a crisis. “There is no reason for concern and commercial banks assured that depositors’ money is kept safe and they offer the full range of financial services and products to all their customers,” the central bank noted in a press release.
A number of public buildings to undergo energy efficiency rehabilitation
The Government approved a €30M loan agreement between Moldova and the European Bank for Reconstruction and Development for the implementation of the project “Energy Efficiency in the Republic of Moldova”. The €30M agreement, yet to be ratified by Parliament, was signed in December 2021. The project aims to provide energy efficiency upgrades to a number of public buildings, such as hospitals, kindergartens or schools managed by central and local authorities. According to Infrastructure Minister Andrei Spînu, in addition to the €30M provided by EBRD, a loan of a similar size will be taken out from the European Investment Bank, plus a €2.6M grant from the European Commission’s Neighborhood Investment Platform and a €500,000 grant from the Eastern Partnership Technical Assistance Trust Fund. The total budget is €75.5M and the implementation period runs from 2022 to 2025.
● THURSDAY, March 10
State will assist only farmers and carriers amid fuel price rises, PAS MP
The Government of the Republic of Moldova will provide assistance to the categories of people who are affected by the rocketing fuel prices the most. These are the farmers and carriers who will get subsidies from the state so as to be able to continue work. Energy experts said the continuous rise in fuel prices is due to the unpredictability on the international market and to the fact that the fuel supplies in Ukraine were destroyed by the Russian troops as military targets. Energy experts noted the rise in fuel prices was fuelled by EU states’ intentions to impose bans on Russian oil and gas imports. Moldova is a collateral victim of the war in Ukraine in which a large part of the stores of diesel fuel were destroyed. “There is nervousness on international markets and this affects the consumer in the Republic of Moldova too. The breaking of logistic chains that crossed the territory of Ukraine as a result of which the bringing of oil products was disrupted is another aspect. The tension was caused by the news about the ban that is expected to be imposed on the Russian Federation. As it is not clear who will substitute these volumes, the prices soared. An eventual ban on the part of the European Union can cause a shortage on the market and price rises,” energy expert Victor Parlicov stated in the talk show “Secrets of the Power” on JurnalTV channel.
Shortage of salt is temporary, minister
Minister of Economy Sergiu Gaibu said he didn’t see empty shelves in stores, but admits that there can be a shortage of salt (as consumers reported, e.n.) given that this product is mostly imported from Ukraine. He noted there are alternatives and salt is already imported from other states. In a news conference, the minister said the supplies in Moldova can be enough for two weeks to 25 days, depending on the type of product, frequency of purchases and other criteria. The shortage of salt is definitely temporary. Some of the persons can buy products in larger amounts due to disinformation, but the stores will be soon refilled and the consumers will be supplied with the necessary products. Sergiu Gaibu noted three are no risks related to the macro-encomia situation in the country and no products will disappear from store shelves. Discussions are being held with business associations, sectors of the economy and officials of the Ministry of Agriculture and Food Industry. The products that were imported from Ukraine, Russia and Belarus will be substituted with products from other countries.
Used car spare parts can be imported
The ban on the introduction of used car parts into Moldova was lifted. A relevant bill to amend the Customs Code proposed by MPs of the Party of Action and Solidarity was given a final reading and was adopted by Parliament. The import of particular parts, such as brake system components, is not yet permitted. According to the sponsors, the legislative proposal is designed to eliminate an unjust ban and to remove monopolies and exaggerated market prices. The regulation of the import of used car parts will help to do away with smuggling, will ensure loyal competition and will offer a new source of incomes for the state budget by accumulating money from customs duties. According to PAS MP Dumitru Alaiba, who heads the Parliament’s committee on economy, budget and finance, the ban on the import of used car parts is unjustified and abusive. “It is a paradox that the import of old car is permitted, while the import of used spare parts is banned,” said the MP, noting a lot of people have been waiting for such a bill.
MPs pass bill on workplace child care services
The bill that enables employers to provide child care services to employees with children under three was given a final reading by Parliament. The Labor Code and the Education Code were this way amended to reconcile work and family life. In a press release, UN Women says it will continue to offer the necessary support so that the children enjoy harmonious early education, while the parents enjoy equal opportunities. The adoption of this initiative is the result of the joint efforts of the authorities and civil society. The provision of crèche services by employers is one of the alternative child care solutions identified by the study “How do we contribute to the creation of family friendly workplaces? Four options of alternative child care services that can be offered by employers” that was carried out in 2020 by the Center “Partnership for Development” in cooperation with UN Women with financial support from Sweden. “The alternative child care solutions are a very important element for the development of the country. Even before the COVID-19 pandemic, the absence of child care service in the country was the main reason that prevented women from entering the labor market, from becoming employed and building a career. By excluding women from the labor market, their economic empowerment is discouraged and human capital that contributes to the country’s development is lost. This way, the alternative child care solutions are a step towards facilitating the (re)integration of women into the labor market, offering them the possibility of enjoying financial independence and of contributing this way to the welfare of families, to labor productivity and the economic development of society,” said UN Women Moldova Country Representative Dominika Stojanoska.
PV systems could be placed on agricultural lots
The photovoltaic systems could be located on agricultural lots without needing to change the purpose of the lot, as a bill that was adopted by the votes of 80 MPs stipulates. According to bill sponsor, head of the Parliament’s committee on agriculture and food industry Vladimir Bolea, the draft law amends and supplements Articles 36 and 83 of the Land Code. The solar power systems could be fixed on ground by a metal structure and not by using reinforced concrete or another type of building material. This way, soil fertility will be preserved. Under an amendment proposed by PAS MP Alex Trubca, halls for the primary processing of agricultural products and perishable goods could be built in the fields and on agricultural lots, near cold storage facilities and agricultural facilities.
Moldova-Russia Business Union looks for new routes for export-import operations
The Moldova-Russia Business Union, which is a public association led by ex-President Igor Dodon, undertakes to help the business entities in Moldova and Russia to organize new routes for continuing the cooperation relations. Igor Dodon informed about this in a meeting with representatives of the Giurgiulesti International Free Port and the Union of Carriers and Road Workers of Moldova. The commitment was made in connection with the closure of logistic and transport corridors that went through Ukraine. The interlocutors considered possibilities of performing export-import operations between the Republic of Moldova and the Russian Federation via Romania, Hungary, Slovakia, Poland and Belarus to Russia or through the Giurgiulești Port to the Novorossiysk Commercial Sea Port. “The Moldova-Russia Business Union will do its best to help the business entities in Moldova and Russia to faster organize new routes for their subsequent cooperation,” the association said in a press release.
● FRIDAY, March 11
Ministry of Economy: There are no risks for particular products to disappear from stores
The Ministry of Economy said there are no risks for particular categories of products to disappear from store shelves. The products imported from Ukraine, Russia and Belarus will be substituted with products from other markets, including EU member states. As regards exports, the impact of the exports to the three countries on the business sector is insignificant. Moldova’s exports to Ukraine represent 3%, to Belarus – about 3%, to the Russian Federation – 8.8% and over ¼ of these exports constitute re-exports. As to imports, Moldova imports about 2% of products from Belarus, 9.3% – from Ukraine and 14%, mostly energy resources – from the Russian Federation.
Government seeks revision of contract with IMF over war in Ukraine
The Government asked for the revision of the contract with the International Monetary Fund so that this reflects the new economic context and ensures a significant rise in financing on the part of the foreign partners, especially in the form of direct non-reimbursable budget support, Prime Minister Natalia Gavrilița stated in a new conference held jointly with the mission chief of the IMF for Moldova Ruben Atoyan. According to the Premier, the economic consequences for Moldova of the war in Ukraine are being assessed this week together with the IMF mission led by Ruben Atoyan. The assessment is necessity for managing risks and budgetary implications. The necessity of additional financing has been agreed, but the sums will be yet determined. Natalia Gavrilița noted that the war in Ukraine and the economic sanctions imposed against the Russian Federation have extensive consequences for the global economy and Moldova is also affected. However, the country’s macro-economic indicators are strong and the budget has a particular reserve and flexibility. The correct economic management of the last few months enabled Moldova to ask only for a program review, not yet for emergency financing.
● SATURDAY, March 12
Economy minister: Only 15% of Moldova’s exports went to Russia, Belarus and Ukraine
The Republic of Moldova is much less dependent on Russia in terms of exports than 10-15 years ago, said Minister of Economy Sergiu Gaibu. According to him, Moldova is not significantly affected by the halt in exports to Ukraine, Belarus and Russia. Minister of Finance Dumitru Budianschi is less optimistic. He said the war on Moldova’s boarder seriously affects the state budget and the authorities already anticipate that the sums coming from the diaspora and the revenues collected by the Customs Service will decline. Sergiu Gaibu said the implementation of the Free Trade Agreement with the EU diminished Moldova’s dependence on the Eastern market. Moldova’s exports primarily go to the EU member states. ”Our exports to these three countries, Ukraine, Riussia and Belarus, represented 15% of the total exports. We are in a much better situation than in 1998, when a major crisis was experienced and when 60% of the exports went to Russia. The level of dependence on Russia is now much lower. Romania is currently the largest export partner with 25% of the exports. The exports to Belarus represented 3%, to Ukraine – 3%, to Russia – 9%. India can be an alternative market and discussions on the issue are now being held. This market is convenient, but it will be more difficult to ensure the process from the viewpoint of logistics,” Sergiu Gaibu stated in the talk show “Emphasis on Today” on TVR Moldova channel.
ANTA sets passenger transportation tariff ceilings for next week
The National Road Transport Agency (ANTA) agreed the tariff ceilings that can be applied on road passenger transportation services through regular district and inter-district routes. The tariff starts from the average price of oil products for March 5 – 11 this year and can be applied as from March 14. This way, on inter-district routes, for comfort category II, the tariff will be 0.79 lei/km per passenger, while for comfort category I – 0.89 lei/km per passenger. On district routes, for comfort category II, the tariff will be 0.89 lei/km per passenger, while for comfort category I – 0.99 lei/km per passenger. As the Commission for Exceptional Situations decided, the tariff ceilings are set each Friday for the next week.
Authorities should regulate wholesale price of diesel fuel, expert
The price of diesel fuel the last few days rose more than throughout last year and such a development shakes any economic logic. Economist Veaceslav Ioniță said that during a year, the price of diesel fuel grew by 5 lei and by another 5 lei the last few days. Also, wholesale purchases were by up to 4 lei more expensive than retail ones these days. The authorities should immediately regulate the wholesale price of diesel fuel and should eliminate speculative intermediation. The expert of the Institute for Development and Social Initiatives “Viitorul” said that diesel fuel consumption in Moldova represents 70%, while gasoline consumption the rest. Two days ago, the filling stations sold diesel fuel for 25 lei/liter. The agricultural producers were offered a wholesale price of 28.5 lei or even 29 lei/liter due to the so-called liberalization of the wholesale market. The Commission for Exceptional Situations had to intervene to stop the rise that was possibly caused by the defective legislation. Economic logic says wholesale prices should be lower than retail prices.
Competition Council probes eventual cartel agreements on oil market
The Competition Council said it is examining the situation on the oil products market, including the wholesale and retailing prices of gasoline and diesel fuel, so as to identify eventual cartel agreement or abuses of dominant position. Steps will be taken immediately after anti-competition practices are detected. The Competition Council will intervene mostly in situations when the wholesale price of diesel fuel exceeds the highest retail price set by the regulator based on international quotations. If the economic justification for the appearance of such situations is absent, the Council can take measures within the limits of its powers that are stipulated by the competition law. “The companies must independently decide the price policy, depending on the own strategy and the structure of the costs incurred in their activities, while the concerted agreements and/or action on the market are punished in accordance with the legislation in the field,” said the Council.
