ECO-BUS WEEKLY DIGEST–February 10-16. Most important Economy & Business news by IPN
● MONDAY, February 10
Sales to be monitored through automated information system
The sales will be monitored through an automated information system called the Electronic Sales Monitoring System. The mechanism will ensure the implementation of electronic instruments in the process of managing, monitoring and recording sales in Moldova, IPN reports, quoting a press release of the Center of Information Technology in Finance. Last week, the technical conception of the system was approved by the Cabinet. Acting director of the Center of Information Technology in Finance Vitalie Coceban said the State Tax Service will own the system, while the Center will implement, manage and develop it. The project is a major challenge, but the fact that the Center’s specialists have the necessary competence and sufficient experience in IT makes him confident that the system will be implemented successfully.
What people should know about consumer loans
The person who takes out a consumer loan can at any moment repay it earlier than the contract stipulates. In such a case, the person can have to pay penalties. But the payment must not exceed the total value of the interest rates that remain unpaid to the financial institution. The National Bank of Moldova published information about the consumer loan as part of the information campaign carried out by it in concert with the National Commission for Financial Markets within the financial education project “Learn. Give Sense to Money”. The consumer loan is an advantage provided by a financial institution for a person who does not have enough money to be able to cover the incurred costs. In the Republic of Moldova, the banks and nonbank lending organizations can release loans to private individuals depending on the individual situation of each person. Even if the consumer loans can be provided in different forms, the main elements remain the same and should be understood by each person.
Economy Ministry responds to Alexandru Slusari over tender contests
The Republic of Moldova is not a member of the European Union and the publication of intention and participation notices in the Official Journal of the European Union is thus possible only when European funds are allocated. This way, it is for now not possible to implement the law on government procurement that provides that notices of tender contests for projects financed with state budget funds should be published in the Official Journal. This is how the Ministry of Economy and Infrastructure commented for IPN on the statements made by PPPDA vice president Alexandru Slusari. According to the Ministry, such a response was received from the Tender Electronic Daily, which is a supplement to the EU Official Journal.
● TUESDAY, February 11
NBM: Partial distribution of profit is possible on one condition
“The partial distribution of the profit made by the National Bank of Moldova was discussed by the NBM, the Government and the International Monetary Fund and, in the agreed conditions, meets the international standards concerning capitalization of central banks,” the National Bank said following President Igor Dodon’s announcement that a part of the Bank’s profit will be directed to the state budget for covering the sums that the citizens must pay as a result of the adoption of the so-called “billion law”. According to the National Bank, the solution is balanced and will enable to gradually accumulate the capital that is needed by the NBM to exercise its mandate and to diminish the burden on the state budget by distributing profit to this.
Law on assessment of FDI to match international practice
The Ministry of Economy and Infrastructure is drafting a bill on the assessment of foreign direct investment (FDI) according to the international practice. The issue was discussed by Minister of Economy and Infrastructure Anatol Usatyi and U.S. Ambassador to Moldova Dereck J. Hogan in a meeting, IPN reports, quoting a press release of the Ministry. The sides agreed that an additional mechanism should be worked out to also assess the local investment, not only the FDI, by the example of other states. According to the minister, by a decision made by Prime Minister Ion Chicu on January 27 this year, an inter-institutional working group was set up to carry out a study of the activity of the ombudsperson in the business score and an analysis of the institutional and financial impact.
Amendments proposed to law on subsidization principles
The Ministry of Agriculture, Regional Development and Environment and the Agency for Intervention and Payments in Agriculture suggested changes to the law on the principles of subsidization. One of the proposals is to extend the age limit for young farmers from 35 to 40. It is expected that this will contribute to attracting more people willing to work in the agricultural sector. The method of paying subsidizes was reviewed in a move to encourage the priority subsidization areas. Other amendments extend the powers of the Agency for Intervention and Payments in Agriculture, with emphasis being placed on decisional transparency, regulate the direct payments and specify the period when the new regulations take effect. The direct payments will be made per animal owned by the farmer as of 2020 and per unit of cultivated farmland as of 2021.
National Bank lifts early intervention regime at BC ”Moldindconbank” S.A.
The Executive Board of the National Bank of Moldova (NBM) decided unanimously to lift the early intervention regime at BC “Moldindconbank” S.A. The decision was taken along with the confirmation, on February 10, 2020, of Nikolay Borissov and Penka Kratunova as members of the bank’s Management Committee. Both of them have a wide financial and banking experience at international level. Also, Victor Cibotaru, who was designated by the NBM as temporary administrator, returned to his position of Vice-President, IPN reports, quoting a press release of the central bank. Thus, BC “Moldindconbank” S.A. has resumed its independent activity in a normal regime, with the functionality of its statutory management being restored. The bank’s Board became fully operational on December 2, 2019, while the Management Committee on February 11, 2020.
After three years of growth, agriculture declined by 2% in 2019, expert
After growth during three years, in 2019 the agricultural sector witnessed a reduction of about 2% in production in the animal breeding and vegetable sectors. According to the programs director of the Institute for Development and Social Initiatives “Viitorul” Viorel Chivriga, this shows that agriculture started to slow down owing to the weather conditions with which the farmers haven’t yet learned to cope. In the program “15 minutes of economic realism” produced by “Viitorul” in partnership with RFE/RL’s Moldovan Service, Viorel Chivriga said the animal breeding sector has been seriously affected by problems for over a decade. The number of animals decreases annually. 85% of the cattle are in the domestic sector and the animal breeding sector will thus never grow.
● WEDNESDAY, February 12
Redirection of NBM’s profit was discussed with foreign experts, official
Secretary of state at the Ministry of Finance Dorel Noroc said the initiative proposed by President Igor Dodon, for a part of the profit made by the National Bank of Moldova to be directed to the state budget for covering the costs incurred by the people as a result of the adoption of the so-called “billion law”, was discussed with foreign experts, including a delegation of the International Monetary Fund that visited recently Moldova. The initiative is balanced as half of the NBM’s profit remains at the central bank and half goes to the state budget. According to Dorel Noroc, the central banks’ profit is directed to the budget in all the countries. “It is important to ensure a particular lower limit of the profit so that the NBM has guarantees for its capital. Currently, this limit is of 10% that is very rigid, but it can be diminished. The bill that will be submitted to Parliament will propose a lower limit of 4% after which the profit could be distributed to the budget,” the secretary of state said in the talk show “Emphasis on today” on TVR Moldova channel.
Efficiency of ambassadors will be assessed depending on attraction of investors, President Dodon
The efficiency of each ambassador of Moldova will be assessed depending on how they attract investors from the country of destination to the native country and how they promote Moldova’s image. If no palpable results are reached during a period of 6-12 months, the ambassador could be recalled, President Igor Dodon stated in a broad meeting of the Board of the Ministry of Foreign Affairs and European Integration that involved Moldova’s ambassadors working abroad IPN reports. President Dodon referred to the pursuing of a balanced foreign policy, which implies the fulfillment of Moldova’s international commitments, especially those that derive from the Association Agreement with the EU and the strategic relations with the Russian Federation. He reiterated the importance of continuing the strategic partnership with Romania, the United States, Turkey and other countries.
“Expert-Grup”: Initiative announced by Igor Dodon encroaches upon NBM’s independence
President Igor Dodon’s initiative concerning the directing of a part of the National Bank of Moldova’s profit to the state budget for partially covering the state debt formed as a result of the coming into force of the “billion law” encroaches upon the NBM’s independence, compromises the efforts to capitalize the institution and is not a viable solution to the problem of the state debt generated by the bank fraud, stated the Independent Think Tank “Expert-Grup”. According to “Expert-Grup”, the payment of a part of the state debt by transferring a part of the central bank’s profit to the state budget at a time when the bank’s capitalization level is reduced is similar to the transfer of money from one pocket to another without solving the core of the problem that is the lack of real and visible progress in investigating the bank theft and recovering the stolen funds.
Citizenship by investment is a method of bringing additional financing into budget, statement
The Citizenship by Investment Program implemented in Moldova is a program for obtaining additional funds into the state budget, being a very robust one, but being simultaneously protected against eventual risks. Besides being a very good method of bringing additional financing into the budget, it is also an instrument for attracting necessary and important investments for developing the infrastructure of the given countries, stated Paddy Blewer, Group Public Relations Director at Henley & Partners, which is the Moldovan Government’s partner in implementing the Citizenship by Investment Program. In a news conference at IPN, Paddy Blewer said there is the experience of other states where some of the citizens weren’t sufficiently informed about the programs by which citizenship is granted for investments. But the population should know the advantages of such a mechanism and the measures aimed at minimizing risks that are implemented within the program. “Such developed countries as the U.S., the UK, Malta, Cyprus implemented successfully such programs. It is a very good method of obtaining additional financing for the state budget and of attracting necessary and important investments for developing the infrastructure of the given countries,” stated the representative of Henley & Partners.
Risks of citizenship by investment and how these can be reduced
Measures to minimize eventual risks are taken within the Citizenship by Investment Program and the risks are practically reduced to zero. Among the measures are the number and nature of the examinations to which the applicants for citizenship are subjected, said representatives of Henley & Partners, which is the Moldovan Government’s partner in implementing the Citizenship by Investment Program. In a news conference at IPN, Paddy Blewer, Group Public Relations Director at Henley & Partners, said the requirements are drastic. The person who applies for nationality and the source of the money that is to be invested must be known. The company’s representative said that in his career he worked as an analyst in security, especially in the region of the CIS, and knows diverse money laundering and terrorism financing schemes. “With the greatest conviction and knowledge of the subject, I want to report that the method of obtaining citizenship by investment is the riskiest one for an individual with a criminal past or a dishonest one to legalize their capital,” stated Paddy Blewer.
Moratorium requested on privatization of state-owned enterprises
A group of experts, civic activists, call on the authorities to institute a moratorium on the privatization of state-owned enterprises at least until the next parliamentary elections. According to them, the call is made in connection with the initiative to private the state-owned enterprise “Metalferos” and with the fraudulent and non-transparent concession, privatization and management of state property during the last few decades. The activists said such initiatives as the one to privatize “Metalferos”, under the current composition of the Government and Parliament, are aimed at unjustly enriching politicians and at prejudicing the interests of the state and the citizens. In a news conference at IPN, public policy expert Ștefan Gligor said that Igor Dodon’s initiative to denationalize an enterprise that is strategic for the national economy, “Metalferos”, is designed to cover the previous frauds and to transform the state monopoly into a private one. “This enterprise during decades served as a source of legal income for corrupt politicians, oligarchs. It can be privatized only after carrying out an independent, international audit by objectively assessing the enterprise’s assets and holding accountable the persons to blame for misappropriation from it,” stated Ștefan Gligor.
Almost 10 lei for a minibus trip? What do municipal councilors say
The municipal councilors consider the rise in fares requested by minibus operators in Chisinau is exaggerated and unjustified. Moreover, they said they received no relevant application from carriers so far. The maxi-taxi operators demand that the minibus fare should be raised to 9.81 lei.
Decision to annul Citizenship by Investment Program will generate losses, statement
An eventual decision to annul the Citizenship by Investment Program will cause only losses to the Republic of Moldova. Also, the Republic of Moldova risks earning a bad reputation before any potential investor, said Paddy Blewer, Group Public Relations Director at Henley & Partners, which is the Moldovan Government’s partner in implementing the Citizenship by Investment Program. In a news conference at IPN, Paddy Blewer said that during over 20 years while this program has been implemented in a number of states, he saw attempts to annul it and these attempts were made by parties, especially opposition ones. However, the given parties, after undertaking governance, continued these programs with particular changes. The reason for the initiatives and statements concerning the annulment of this program in the Republic of Moldova is purely political in character and the advantages of this program for the country are not examined.
● THURSDAY, February 13
Government against moratorium on state inspections at SMEs
The Cabinet didn’t approve of the legislative proposal to institute a moratorium on state inspections at micro, small and medium-sized enterprises formulated by a group of MPs, invoking the irrelevance of the provided arguments. Minister of Economy and Infrastructure Anatol Usatyi said that by adopting the law on state inspections at SMEs in 2012, the consolidation of the legal and institutional framework concerning state inspections at enterprises was ensured and the principles and procedures for performing inspections were set down.
Provision of loans by nonbank lending organizations to be modified
The Government approved changes to a number of legal acts that regulate the activity of nonbank lending organizations. The costs related to consumer loans repayable in up to two years will be limited and could not exceed the initial value of the loan. In the case of loans of at most 50,000 lei, the contract clauses could not be modified to increase the payment obligations of consumers. It will also be banned signing loan refinancing contracts with the same debtor in case of overdue payments of over 30 days. The nonbank lending organizations will be banned from attracting reimbursable funds from the public, but will be allowed to take out subordinated loans, similar to the practice used in the banking sector. Also, the capital requirements for these organizations will be raised from 300,000 to 1 million lei. The nonbank lending organizations will be obliged to present reports at least to one credit bureau.
Penalties for selling plastic bags adopted in final reading
The use and sale of plastic bags and tableware will be penalized. After over half a year of the vote in the first reading, the MPs adopted relevant amendments and supplements to the Contravention Code in the second reading. Under the bill, the fine for private individuals will be of at most 4,500 lei, while for legal entities of at most 12,000 lei. The provisions refer to the use and sale of bags with or without handle, with a thickness equal to or greater than 50 microns supplied to consumers at retail outlets, thin plastic bags with a thickness under 50 microns, except for those used as packing, and to very thin plastic bags with a thickness under 15 microns, except for those used as packing.
Waste should be sorted and a part of it can be recycled, statement
The waste generated by the population should be maximally transformed into secondary raw material so as to create other products given that the natural resources on the planet are being used up. To increase the quantity of recycled waste, the local public authorities should take measures, including by establishing public-private partnerships, suggested Iuliana Cantaragiu, expert of the National Environmental Center. In a news conference at IPN, Iuliana Cantaragiu said the legislation entrusts the local public administration with the task of creating an efficient waste collection system and of ensuring conditions for the separate collection of waste in stages, including by providing lots for the purpose.
Public-private partnership on “Motor Terminals and Stations” was detrimental to public interest, report
The Government managed to adopt an absolutely hasty, unjustified and in parts absurd decision to establish a public-private partnership for the state-owned enterprise “Motor Terminals and Stations”. The authorities held a vitiated contest, with multiple violations of the legislation, and signed a public-private partnership contract detrimental to the public interest. Any monitoring of the fulfillment of the obligations by the private partner was neglected, says a report by the commission of inquiry into the privatization and concession of public property starting with 2013 that was presented in Parliament on February 13. “The state-owned enterprise “Motor Terminals and Stations” was put on the list of works and services of public interest proposed for public–private partnerships by Government decision No. 419 of 2012. However, from 2012 until 2018, there was no public-private partnership conception or a bill to promote such a project. The presence on the list does not mean by far that the state intended to fully transfer management to private hands. This presence could refer to projects to renovate buildings or to cooperate in digitizing commercial operations, such as electronic tickets, for example. We should not forget that an annual flow of over 500 million lei is registered in the public transport. The enterprise is an essential element of the passenger road transport system. It serves over 80% of all the bus passengers,” stated the commission’s chairman Igor Munteanu.
Commission of inquiry suggests notifying law enforcement agencies over Tutun-CTC
The parliamentary commission of inquiry determined that the termination of the contract for the sale and purchase of state-owned shares in the tobacco company SA “Tutun – CTC” at the commercial contest of January 11, 2019, on the initiative of the state, is not necessary, but suggested that the law enforcement agencies should be informed about the public servants who represented the state in the administration of SA “Tutun – CTC and by their actions or inaction allowed poor results that led to the depreciation of the company’s value. The interaction with distributors that obtained evident advantages from the company should be assessed, the commission’s chairman Igor Munteanu said in Parliament when presenting a report. The report says the privatization decision was an optimal solution for the Government of Moldova. Keeping the state-owned shareholding in SA “Tutun-CTC” SA would have led to a halt in production and later to insolvency. A series of companies (distributors) were involved in the manipulative scheme and the sale took place only documentarily, while the financial results for 2017-2018 were distorted before the contest.
● FRIDAY, February 14
Igor Munteanu: Whole national system of public transport was transferred to private individuals
The whole national system of public transport was transmitted to private individuals and something like this is dangerous for the life and health of travellers in Moldova, stated MP of the Party “Dignity and Truth Platform” Igor Munteanu. He noted that the enterprise that obtained use of the state-owned enterprise “Motor Terminals and Stations” under franchise passed on the concession rights to a firm that sells clothes and footwear and to private individuals. “They transmitted the concession rights to private individuals. The managers are now persons who represent an obscure clothing and footwear firm and private individuals. It is absurd to pass on the whole national public transport system to private individuals. No state that respects itself should do such things as this is dangerous for the life, not only for the comfort and safety of passengers,” Igor Munteanu stated in the program “In Depth” on ProTV Chisinau channel.
Anatol Usatyi: In current state, Moldova’s Railways should not be privatized
Minister of Economy and Infrastructure Anatol Usatyi said the privatization of Moldova’s Railways should not be discussed at present, given the situation in which the company is now. According to him, if this is done, Moldova’s Railways will be sold at the price of scrap metal. The minister noted that in the current situation, it is opportune to liberalize the services provided by the company. “Given the current state of Moldova’s Railways, I don’t think we should follow this path now. The privatization is not yet discussed. The liberalization of the market can be discussed now,” Anatol Usatîi stated in the talk show “Black Box” on TV8 channel.
Igor Dodon believes lots situated near Chisinau Arena should be sold
The loan of over €30 million provided to Moldova by a private partner for erecting the Chisinau Arena can be repaid if the lots contiguous to the construction are sold at a public contest, considers President Igor Dodon. In a new episode of the program “Resident Responds”, Igor Dodon said the construction works cost about €40 million. The state provided €10 million and the rest of the sum was borrowed. “The loan can be repaired if we sell those lots to investors so that we do not spend state budget funds,” he stated noting that the Arena occupies only 10 ha of the total area of about 60 ha.
About 540 km of roads are under rehabilitation
Approximately 540 km of roads are being rehabilitated or built. The total length of roads for which tender contests to choose contractors were launched or will be yet launched this year is of 460 km and the cost of the works was estimated at over 6.6 billion lei, Minister of Economy and Infrastructure Anatol Usatyi stated in a meeting with representatives of building companies. According to the minister, tender contests for the rehabilitation of the R13 Bălți-Florești, G50 Florești-Nicolaevca-Sângerei, R26 Mihailovca-Cimișlia, R30 Căușeni-Ștefan Vodă, R31 Tudora-Palanca and other roads were held so far this year. There will be announced tender contests to renovate the Bălți-Criva and Florești-Nicolaevca-Sângerei roads and bypassing roads in Cimișlia and Vulcănești.
United Arab Emirates impose restrictions on Moldovan airlines
The United Arab Emirates suspended the work of four Moldovan airlines for a period of six months as of February 1, 2020, imposing a ban on freight transportation. The Civil Aviation Authority of Moldova said it received notifications on January 19 and is firmly committed to remedy the situation and eliminate the imposed ban. “During the audit, it was determined that the suspension of the companies was the result of a negligent attitude to work and the inaction of the previous administration, in 2018-2019. Following the nonfulfillment of the functional obligations, the Civil Aviation Authority of the Republic of Moldova will present all the available materials and information to the competent bodies so that they conduct an investigation and determine the guilt of officials of the CAA,” the institution says in a press release.
Violina Șpac suggested for NAER director
The Parliament’s commission on economy, budget and finance Violina Șpac was chosen as a candidate for the post of director of the Administration Board of the National Agency for Energy Regulation (NAER) and will be proposed to Parliament for confirmation. On February 12, the commission rerun the interview stage that involved candidates Violina Șpac and Lilian Barcaru, both employees of the NAER. On December 11, 2019, the two were admitted to the public contest to fill the post of director, while the third candidate withdrew from the competition invoking personal reasons.
Second largest cell phone carrier to be sold
The second largest cell phone carrier in Moldova is being sold. Fintur Holdings B.V., which is fully owned by Telia Company, reached an agreement on the sale of its 100% holding in Moldcell to CG Cell Technologies DAC at the transactional price of US$ 31.5 million, IPN reports, quoting a press release of Telia Company. “I’m glad to announce the completion of the process of leaving the Eurasia region, which will enable us to fully focus on the markets in Northern Europe and the Baltic States. Moldcell is well managed by dedicated and talented employees whom I want to thank for their contribution during all these years. We wish them success in the next company development stage,” stated Christian Luiga, acting president and CEO of Telia Company.
● SATURDAY, February 15
Central bank opens doors to future specialists
Over 100 students and master’s degree aspirants of higher education establishments of Moldova are expected to visit the National Bank of Moldova on February 18 to familiarize themselves with the bank’s activity within the Career Day at the NBM that is staged for the first time by the institution. According to the bank, the event forms part of a series of measures designed to ensure more intense communication with studying young people and to offer a career start for the most courageous ones. During several hours, the invitees will be able to take part in specialty workshops and to find out interesting first-hand information. The goal of the activities is to develop a constructive dialogue between students and the employer.
Moldova’s exports in 2019 were slightly higher than in 2018
Exports of goods in 2019 came to US$ 2.8 billion, up 2.7% on 2018. According to the National Bureau of Statistics, exports of national goods that represented 71.9% of the total exports were US$ 2 billion, an increase of 7.9% on 2018. The exports of goods intended for EU member states last year totaled US$1.8 billion, 1.7% down on 2018. These represented 65.9% of the total exports, as opposed to 68.8% in 2018. The CIS countries accounted for 15.6% of Moldova’s exports, as against 15.4% in 2018, adding up to US$435 million. The re-exports of foreign goods came to US$ 781.5 million, which is about 28.1% of the total exports or by 8.5% less than in 2018.
MP wonders how secured lots situated near Chisinau Arena can be sold
MP of the Party “Dignity and Truth Platform” Alexandru Slusari reacted to President Igor Dodon’s assertion that the state can put up for sale the 59 hectares of land located around the Chisinau Arena complex and can use the proceeds to repay the loan of €30 million raised for erecting the arena. The MP wonders how the land secured to a firm that is affiliated to the company that built the arena can be sold. “He said the best solution is to sell the 59 hectares of land contiguous to the arena and to settle the debt with the proceeds. I will this time omit the issue as to how and to whom these lots that were withdrawn from agricultural circuit in Stăuceni commune, whose residents didn’t benefit from the farmland of the former collective farmstead as a result of the agrarian reform, are to be sold,” Alexandru Slusari posted on Facebook.
