„IT Revolution” on Delay in Moldova

Analysis of Info-Prim Neo Creating a favourable fiscal frame for IT companies – starting January the 1st 2005 the employees in this sector have been exempted from the income tax for a 5-year period – has allowed the operators in this sector to save 30% of finances. Yet maintaining a discriminating competition environment, as well as the flow „of young brains” abroad creates supplementary obstacles in a rapid development of the sector and its transformation into an important branch in the national economy. Authorities are pleased The Director of the General Direction for developing the information society of the Information Development Ministry (IDM,) Sergiu Sâtnic says the fiscal facilities offered by the state have activated the investors’ environment, and a series of foreign companies have entered the Moldovan information technologies market, creating new jobs for producing and assembling computing equipment in the country. According to Sâtnic, the last decade the information technologies and communication sector has become one of the most dynamic and viable in the national economy. The investments and the application of high technologies have triggered a real revolution in the sector. „Within less than 10 years, with big steps, the fix telephony, the mobile telephony and the data transport services have developed. As a result, the last three years, the number of companies working in the information technologies and communications has risen considerably. In 2005, the official statistics showed 931 IT and communication companies or about 3% of the total number of 32,000 companies,” says the IDM representative. According to the ministry’s data, the value of the telecommunication and IT services, in 2005, rose by 50% as related to 2004. Also, the weight of the IT sector in the GDP represented 10.5%, as compared to 7.5% in 2004. Companies are more sceptical The development of the IT sector in Moldova is confirmed by the operators, yet, they take a more reserved stance regarding the „IT Revolution”. Vladimir Machedon, manager of the company STARNET, says the IT operators greet the development policy promoted by authorities, but says there exist a series of issues needing rapid solutions to raise the IT sector to an industrial rank. Machedon mentions especially the discriminating competition and the rather restrictive conditions to take loans from local banks. Peaking on the unloyal competition, Machedon shows the national fixed telephony operator Moldtelecom which, according to him, ignores the requests of internet providers or complains it has no technical facilities. As a consequence, the companies have to make their own infrastructure which is much more expensive than using Moldtelecom’s infrastructure. Creating your own infrastructure is not logical, says the STARNET manager. Regarding the conditions of taking loans from banks, Machedon says the banks should make it easier to give loans for developing IT businesses. He underlines that those facilities are needed especially by the young people, for which it is more difficult to start their own business. Speaking of young specialists, Vladimir Machedon mentions Moldova loses much following the exodus of „young brains” abroad, as they could contribute much to the development of the local IT sector. Development Solution However, the specialists from the Information Development Ministry assert that IT sector can become a basic one in the national economy, if the present development trend is maintained. Sergiu Sâtnic, direction director of the Ministry, believes that in order to insure the viability of the IT sector in Moldova, as well as to boost the financial situation of companies in the sector, it is timely to create an IT market, where the offer and demand should meet. For this purpose, the ministry intends to simplify the procedures to get licences, to organise contests and tenders, to certify the information products, to obtain the authorship certificate, to export and import information products, to operate payments. Sâtnic mentions that the IDM will further cooperate with companies to improve the legal frame regulating the IT sector, to stimulate and promote it. Export Opportunities As far as increasing the export capacities of the Moldovan IT sector is concerned, the IDM specialists say Moldova has real possibilities to increase deliveries abroad. Depictive of this fact is the existence of a series of companies which already work on the information market, develop own products enjoying wide usage in the country and abroad - RITLABS, COMPUDAVA, SOFTCOM, DEEPLACE/SLAVANS-GRAFICA. However, the ministerial specialists acknowledge the software export is a relatively new practice and there are yet many problems to be solved. More foreign experts who have analysed the structure of the Moldovan economy say the IT sector could become one enjoying priority, able to provide an important contribution to the economic development. Yet, they specify that apart the qualified specialists, Moldova should insure a favourable environment for the development of the sector, as well as encourage the attraction of foreign investments, which, in addition to the financial backup, should bring modern management and know-how, but also to ease the penetration of the Moldovan software into the international market.