● TUESDAY, August 8
Moldova-EU Association Agreement was 80% implemented in six months, minister
The measures stipulated in the Moldova – EU Association Agreement in the first half of this year were 80% carried out. The measures created favorable conditions of commercial-economic activity for business entities, IPN has learned from the Ministry of Economy and Infrastructure. Parliament passed laws that regulate the entrepreneurial activity and adjust the legal acts to the state inspections system. The new changes will contribute to reducing costs and simplifying the activity of business entities owing to the elimination of 140 permissive documents, including 18 licenses. There was adopted the legislative initiative that ensures the highly qualified IT professionals’ facilitated access to the labor market of the Republic of Moldova. The new changes are designed to support start-ups in the field in order to create an efficient permissive framework for ensuring the access of persons who invest in IT to Moldova. The public procurement area was improved by new regulations on the organization and functioning of the Public Procurement Agency. In the transport sector, regulations were approved to ensure access to airport handling services in Moldova and loyal competition and to maintain the objectives transparent and non-discriminatory. Progress was made in promoting legal acts to constitute the Naval Agency of the Republic of Moldova and to remove the barriers to creating a common airspace. In the energy sector, contracts were signed for having the Iasi-Ungheni-Chisinau gas pipeline that will connect the natural gas transportation systems of Moldova and Romania designed. There were elaborated the project documentation for ensuring the functioning of the operational, administration and maintenance complex and the legal framework planned for transposition.
Fuel prices continue to rise
After the price ceilings for gasoline and diesel fuel were increased by 0.20 lei and 0.22 lei respectively two weeks ago, the National Agency for Energy Regulation announced new rises for the next two weeks. The ceiling for gasoline was increased by 0.54 lei, while for diesel fuel by 0.57 lei. The price ceiling for a liter of gasoline “95” was set at 17.06 lei, as opposed to 16.52 lei during the past weeks ago. Diesel fuel will cost at most 14.77 lei a liter, in contrast to 14.20 lei until now. The new price ceilings are valid for the period between August 9 and August 22. The Agency calls on those who notice higher prices than the ceilings in gas stations to report on the green line +373 800 10 800 or through the email address anre@anre.md.
Gas suppliers will have to reduce prices to keep market share
The traditional suppliers of gas, including Gazprom, will have to reduce the prices in order to keep the market share as the stimulation of gas extraction in the United States led to a considerable decline in gas imports on the North-American market. Currently, the gas import terminals are converted into export terminals, energy expert Victor Parlicov stated in the program “15 minutes of economic realism” produced by the Institute for Development and Social Initiative “Viitorul” in partnership with Radio Free Europe. The U.S. will become one of the largest exporters of gas. Now the American companies orient themselves mainly to the European market. On June 8, 2017, the first consignment was exported to Poland and this tendency will be accelerated. As regards prices, the expert said that in the medium term the natural gas prices will decline. In Europe, the price will stabilize at US$120-130 per 1,000 cubic meters. Therefore, the traditional natural gas suppliers, such as Gazprom, will have to decrease prices. This competition will lead to the evening out of prices on the main natural gas markets – North-American, Asian and European. Soon we will speak about a global market of natural gas. “For the Republic of Moldova, it is important to develop the infrastructure needed to bring gas from another source than Gazprom so as to benefit from the favorable conjuncture on the regional market. On the other hand, the interconnection with Romania should be completed, but there is also the interconnection with Ukraine in the north of the country, which can work in the reverse regime as well. So, compressed gas could come both from the north, through Ukraine, and from the south, through Romania,” said the expert. As to renewable energy, Parlicov said the improvement of the energy storage technologies is one of the main preoccupations of investors and technological research centers at present and the goal is to compensate the intermittency of the energy produced from renewable sources. Even if Moldova pledged to adopt a new law to promote renewable energy by the end of 2012 within the Energy Community, this was passed only in 2016 and its coming into force was postponed until 2018. The authorities delay the coming into force of the law following the logic that the renewable energy is expensive and could put pressure on tariffs. Meanwhile, the renewable energy becomes competitive with energy generated from fossil fuels by price and the delay in putting this law into practice prevents the consumers from installing own generation sources to substitute the consumption of electrical power from the network.
● WEDNESDAY, August 9
Pavel Zingan: Last few years were depressing for Moldovan business
The last few years were depressing for the Moldovan business, but the economy stopped to decline, businessman Pavel Zingan said in the program “Politics” on TV8 channel. According to him, the fact that the economy no longer declines encourages the people working in business. “I consider the business depends on two big factors: market and policies. The situation in politics can be ideal, but if the policies are unfavorable, the business feels unsafe,” stated the businessman. Pavel Zingan noted that Moldovan politics have been unpredictable during the last few years. The businessmen are pessimistic when the situation cannot be anticipated. “It is hard to describe the last few years as good given the economic and political situation,” said the businessmen. He also said that the business community should be compliant as its task is to make money and to survive.
Over 80 sketches suggested for 1 leu and 2 lei coins
More than 80 proposals for the design of the 1 leu and 2 lei coins have been submitted by people to the National Bank of Moldova. The Bank’s vice governor Ion Sturzu, in a press briefing on August 9, said there were chosen the best three sketches for the 1 leu coin and the best three sketches for the 2 lei coin. According to Ion Sturzu, there was launched the procedure for approving the technical parameters of the future coins. The set of documents required for holding a tender content to choose the designer is being prepared. The producer of the 1 leu and 2 lei coins will be chosen later. The designer will combine the selected sketches so that the final design includes elements from them all. “When the coins are introduced, the necessity of producing 1 leu banknotes will disappear. The cost price of a coin is much higher than of a 1 leu bill. We consulted society, businessmen, analysts and everyone welcomed the intention to replace the banknotes with coins and to introduce a new coin,” stated Ion Sturzu. Among the elements of coins suggested by people are names of personalities, historical monuments and popular traditions. The authors of the six chosen sketches and the sketches will remain secret until the decision to put the 1 leu and 2 lei coins into circulation is published in the Official Gazette. “The winners will be awarded by a commemorative silver coin whose value is not higher than 675 lei, depending on the taken place,” stated Ion Sturzu. At the start of June, the National Bank of Moldova announced its intention to put a 2 lei coin into circulation and to replace the 1 leu bill with a 1 leu coin. The 1 leu bills will circulate in parallel with the 1 leu coin until the stores are used up. The 1 leu bill will be replaced because it lost its initial value and is no longer efficient.
Tiraspol plans to increase egg, milk and meat production
The Transnistrian region has plans to augment the production of milk, meat and eggs. Now the region is supplied with own milk production in proportion of 42%. The demand for meat is 27% satisfied with local production, while for milk – 26.5%. The local press reported that to increase the own production and to ensure food security, the competent bodies elaborated a development program that will be implemented in stages until 2025. According to minister of agriculture of Transnistria Efimii Covali, special attention within the program to develop the agro-industrial complex will be devoted to the animal breeding sector. To increase the number of cows, heifers will be gradually imported from states where the reproduction process is well organized. There were selected 260 heifers that will be brought from Germany to Transnistria in August – October. “A modern farm was built for the purpose. The milk will be delivered to a hall that is being built in Parcani. This would process 20 tonnes of milk a year,” stated Efimii Covali. Plans were also made for pig breeding. There will be three large pork producers in the region. “There are real plans to increase poultry and pork production and these cover the period until 2025. As to beef, in this case the production process is long-lasting,” stated Efimii Covali. To achieve the set objectives, the taxes for agricultural companies will be stabilized for the period of the program. Also, the tariff of water for irrigation will be frozen for several years. This is now 70 Transnistrian kopeks.
Diam International intends to open factory in Moldova
The French group Diam International is considering the possibility of opening in Moldova a factory for making publicity design elements used by shop chains to promote the sold goods, the group’s director general Benjamin Bullmer said in a meeting with Minister of Economy and Infrastructure Octavian Calmac. According to the Ministry of Economy and Infrastructure, the project envisions the construction of a factory with 100 workplaces. The new employees will be trained at one of the Group’s factories in Turkey. Benjamin Bullmer said the Republic of Moldova offers the most attractive investment opportunities in the region and has development potential. For his part, Octavian Calmac stated that the Government of Moldova during the last year implemented a series of programs and strategies for creating an attractive investment climate for the business community. He invited the administration of Diam International to take part in the Moldova Business Week 2017 Forum that will be held in Chisinau on October 3–6. Cooperation contracts are to be signed during this.
● THURSDAY, August 10
Customs official arrested on malfeasance charges
The head of the North Customs Bureau was arrested following searches at his home and office on Wednesday. The National Anticorruption Center said in a statement the official had tried to create obstacles for a company specializing in timber imports from Ukraine. In particular, the company was subjected to stricter verification and undue fees, despite its status of a major taxpayer enjoying facilitated treatment at the customs. Because of such “constant harassment”, the importer had to return the timber back to Ukraine, which caused the company to lose about 200,000 lei and the state to miss out on customs duties. The official has been arrested for 72 hours. He faces a penalty ranging from a fine of 2,000 conventional units to up to 6 years in prison, either way with a ban from occupying public offices for a period of up to 10 years. NAC said the suspect is already under investigation for another alleged case of official misconduct, but despite prosecutors asking for his suspension, the Customs Service has allowed him to further occupy his post.
Moldova ‘has no choice but to respect IMF agreement”
Moldova has no choice but to adhere to the agreement signed with the International Monetary Fund, as our low sovereign credit rating doesn’t allow the government to borrow from any other international bank, thinks analyst Victor Ciobanu. Speaking at a talk-show on TV8, Victor Ciobanu said the IMF responds to a government’s request as a last-resort lender, when the country’s balance of payments is seriously in deficit and there’s really little alternative left. “It would be quite stupid not to get this money, which compared to commercial banks is offered at a very good interest, too. There’s really no dilemma and no alternative here”, said the expert. Economist Alexandru Fala, program director at the ExpertGrup think-tank, said the IMF agreement doesn’t involve a particularly great amount of money actually. “One of the most important aspects of this IMF memorandum is that it represents a green light signal for other foreign donors to finance Moldova”. “If we look at certain developments in recent years, we can see that public investment is strongly correlated with foreign investment. So, the foreign funds go largely to fund these public investments”, added Alexandru Fala. In November 2016, the IMF approved a three-year agreement with Moldova to support the government’s economic and financial reform program. In particular, it offers a total amount of 129.4 million SDR – about $178.7 or 75 percent of Moldova’s quota with the IMF.
Tax service to be able to fine money changers
The State Fiscal Service will be authorized to fine money changer businesses for violating rules of operating fiscal cash registers under an amendment approved today by the Government. At present, such violations are not sanctioned. The National Bank, which is the body supervising money changers, can detect yet cannot punish such violations. Under the new amendment, the National Bank will send the Fiscal Service a copy of the report ascertaining breaches of cash register operating rules, and the Service will subsequently impose fines. Another amendment approved today formally enables money changers to operate change machines, which will have to have cash registers and issue receits as well. The amendment thus introduces a new definition, of “currency information system”.
Government starts talks to improve communication about DCFTA benefits
The Government has formally initiated negotiations for an amendment to a EU Financing Agreement supporting the Deep and Comprehensive Free Trade Agreement. The amendment will extend the project by two more years and will supplement it with 2 million euros to improve communication efforts. The goal is to further raise awareness of the benefits of the DCFTA for both businesses and the public at large. The project’s beneficiary is the Ministry of Economy and Infrastructure. The extension of the initial two-year time frame will help to make the most of the offered funds and complete the proposed activities, argued the Ministry.
● FRIDAY, August 11
Grant amount increases in PARE 1+1 Program
The maximum amount of non-reimbursable funding offered to beneficiaries under the Remittance-based Investment Program PARE 1+1 has increased from 200,000 to 250,000 lei, following changes adopted by the Government on Thursday. The increment was recommended by European experts in a study carried out to improve the results of the Program. The study was conducted as part of a project to support the implementation of the Deep and Comprehensive Free Trade Agreement with the EU. The decision is also designed to offset the 25-30% devaluation of the leu over the past seven years. Other changes adopted by the Government make it easier to apply for PARE 1+1 funding. This will be done by submitting an application form and a declaration stating that the applicant hasn’t received support from other state-funded projects. The concept of the PARE 1+1 Program is that the government contributes 1 leu for every leu invested in starting or developing a business by returned migrants or their first-degree relatives. The government offered a total of 66.97 million lei under PARE 1+1 during 2015 and 2016.
Moldova remains dependent on imports, with a high trade deficit, says expert
The economic statistics concerning the first half of 2017 paint the same disproportionate picture as in previous years, according to historian Gheorghe Cojocaru. During an interview for Radio Free Europe, he explained that Moldova remains dependent on imports, which are twice higher than the volume of exports. Gheorghe Cojocaru notes that 50% of Moldovan imports come from EU member states, while only 25% come from CIS countries. Nonetheless, Moldova’s trade balance remains negative in relation to both groups. “According to statistics, Romania is by far Moldova’s most important economic partner, followed by Russia, Ukraine, Germany and Italy. These are the top five trade partners of our country. As regards exports, the Romanian market tops the charts again”, said Cojocaru. Concerning the economy of the separatist region across the Nistru, the expert thinks it has the same imbalances as the national economy as a whole. About 60% of Transnistrian goods are sold on the right bank of the Nistru, but Moldovan ‘imports’ account for only 7%. Russia is the source of 60% of Transnistrian ‘imports’. Meanwhile, the Romanian market absorbs 15% of the region’s production, Russia 8% and Ukraine 6%. The Transnistrian economy is in a deep crisis and its only source of profit is selling energy to the right bank, explained Cojocaru. According to him, connecting Moldova to the Western economic area is yet to cause major changes in the local social mentality. The left bank seems entrenched in the prison of post-Soviet mentality. The historian thinks that, irrational as it may seem, Moldovan society seems complacent in its position as a bad student when it comes to economic lessons and prefers to feed on illusions and false promises.
Moldova to get $23.7 million to modernize agriculture
Moldova will receive $23.7 million, including $5.5 million as a grant, to develop and modernize its agriculture, after a formal document acknowledging the Financing Agreement with the International Fund for Agricultural Development was published today in the Official Gazette. The $18.2 million loan is offered for a period of 25 years, with a grace period of 5 years, at a fixed interest rate of 1.25% per year and a service charge of 0.75%. Having a duration of six years, the Agreement will enable the construction of 24 water supply networks for irrigation purposes with a total irrigation capacity of 1,400 hectares for 75 agricultural producers. To enable the cultivation of high added-value crops on the irrigated land, over 700 jobs will be created, including 280 permanent. Moreover, to facilitate the farmers’ access to the cultivated land, 12 segments of road will be rehabilitated, which will benefit 50 companies and over 1,200 families from 12 villages. Additionally, reservoirs with a total surface area of 30 hectares will be built or repaired, and 200 hectares of windbreaks will be planted or rehabilitated.
● SATURDAY, August 12
Free economic zones attract 22 million dollars in the first half of 2017
The total amount of investment in Moldova free economic zones (FEZs) has reached 305.3 million dollars, as of July 1. In the first semester of this year, 22.1 million dollars have been invested in FEZs. According to an analysis by the Ministry of Economy and Infrastructure, FEZ Balti attracted 36.4% of all investments, followed by FEZ Ungheni-Business with 23% and Free Entrepreneurship Zone Expo-Business-Chisinau with 22.1%. The total amount of industrial production by FEZ residents in January-June 2017 has increased by 18.8% (in current prices), compared to the same period of last year. The total output value is 2339.5 million lei. Most of the production, 84%, is exported. The value of exports in this period increased by 23%, reaching 2111.9 million lei. FEZs accounted for 10.6% of Moldova’s exports. In the first six months of 2017, FEZ residents paid taxes of 140.7 million lei, an increase of 36.5% compared to 2016. Most taxes are paid in FEZ Balti (41.3%) and FEZ Ungheni-Business (29.5%). At the moment, there are seven FEZs in Moldova, hosting 167 residents. Most of them are in FEZ Balti (46), Expo-Business-Chisinau (40), FEZ Ungheni-Business (34) and FEZ Production Park Valkanes.
