In a country where there is no fair justice, it is hard to attract foreign investors, said former Prime Minister Natalia Gavrilița, a member of the Supervisory Board of the National Bank of Moldova. According to her, although the authorities have a tax policy beneficial to investments, large companies avoid starting businesses in Moldova due to the instability generated by the war in Ukraine, but political stability and the justice sector reform are important for attracting large investors, IPN reports.
Ex-Prime Minister Natalia Gavrilița said that even if the Government offers tax incentives to companies that decide to invest in Moldova, the war in Ukraine scares big investors. In order to become attractive from an investment point of view, Moldova must reform the justice sector and fight corruption.
“Even if we had a stimulating fiscal policy, openness towards foreign investors, the fact that we have a war in the neighborhood, the uncertainty about Moldova’s political volatility stopped particular investors in recent years. The fact that we became a candidate country and the fact that negotiations were opened will help us. But it might take time for investments to come. At the same time, we had very high rates (of inflation – e.n.), the cost of money was very high. And the reforms done so far are no longer enough. We need to go on with the next generation of reforms. And here, first of all, the justice sector reform will matter. In a country where there is no fair justice to defend an investor’s property, it will be very hard to attract high-quality investors, but it will also be very hard to keep our young people with startups in the country,” Natalia Gavrilița stated in the talk show “At 360 Degrees” on Radio Moldova station.
She admitted that inflation in recent years influenced the living standards of every citizen. The NBM’s policies contributed to lowering inflation, the authorities’ goal being to ensure economic growth.
“We have seen worrisome figures recently. If we look at small companies operating in the IT sector, about a third of these companies register in the Baltic countries. The figure was announced by Deputy Prime Minister Dumitru Alaiba at a recent event centering on the European integration. The question is why do they go there? Because they trust those state institutions more. There is less bureaucracy and it costs them less time and resources to do everything according to the rules and develop their business. So, we need to continue reforms. I understand that the last few years were very difficult for our people because we had a very high inflation rate and an economic decline. It’s hard to recover from such an economic shock. However, it is good that we reached an inflation rate below 5%, which is the target of the National Bank, and we have a small economic growth,” explained the former Prime Minister of the Republic of Moldova.
The first inflation report this year, presented by NBM governor Anca Dragu, shows that the inflation rate in 2024 will not exceed 5%. The highest inflation rate in recent years was recorded in the autumn of 2022 – 34%.
