Moldovan Government must be more efficient in distributing public funds - Edward Brown

The Government of Moldova has to be more efficient in distributing public funds, given the limited fiscal resources, and should make strategic choices so as to attain a sustainable economic growth and reduce poverty, said Edward Brown, World Bank Country Manager for Moldova, during the presentation of the Analysis of public expenditures “Moldova: Improving Efficiency of Public Expenditures for Attaining Economic Growth and Reduce Poverty”. Lawrence Bouton, WB Senior Country Economist for Moldova, stated that until now Moldova has made progress especially in maintaining macro-stability, stability of the fiscal and macroeconomic framework, improving at the same time the State budget planning. Although the economic growth in Moldova has been firm in the last few years, a fact which led to increased public expenditures, it was generated mainly by consumption and would not be sustainable in the future years, the WB expert said. According to him, by reducing administrative costs, the public investments for critical needs will increase, especially in such crucial sectors as infrastructure, healthcare and education. WB is concerned about the level of public expenditures in Moldova, because, the expert says, at this chapter Moldova ranks higher than other countries with the same level of income, while the over-expenditures in the public field is alarming as it can have a major impact on the economy. According to the WB analysis, the public expenditures anticipated in the EGPRSP, exceed the available internal resources. The additional budgetary support from abroad can help to mitigate such resources-related problems. Also, funds could come from privatizing the state assets or accelerating the reduction of the public debt with a view to decreasing the sum of expenditures intended to pay the interest. At the same time, the efficient use of public funds for improving human resources will stimulate the productivity and increased revenues, therefore, will extend in the future opportunities for private and public consumption. The report also says that the economic management became difficult due to the external shocks on the prices – the costs for energy rose rapidly, while the prices of natural gas doubled in early 2006.