Science Academy sets alarm bells ringing

The Moldovan Science Academy sets the alarm bells ringing as to the consequences of the economic-financial crisis over Moldova's economy and society. Unemployment, the depreciation of the national currency, lower incomes to the budget, lower purchasing power of the population are but some of the aftereffects the crisis will have on the country, reads a press release by the Science Academy, quoted by Info-Prim Neo. According to its experts, the first sign of the crisis is the slump in remittances. The next sector to be hit is the real sector of the economy. The vulnerability of small producers and farmers will drop. Unemployment is set to grow as a result, followed by lower incomes to the budget and lower purchasing power of the population. The Moldovan leu may also depreciate. The drop in foreign payments and the devaluation of the leu will also have a positive side, since the imports will drop, the Academy finds. “Fewer remittances could step up the domestic production to make up for the imported goods. A weaker leu will make the Moldovan exports more competitive,” the communique reads. The Academy's experts do not think a massive inflow of the Moldovans working abroad could jeopardize the jobs of the Moldovan employees, since the migrants work in other areas than the ones employed in Moldova's economy. In order to jump over the crisis, the academicians recommend to urgently set up a National Anti-Crisis Council, to develop intensive science and the sectors using manual labor. “Reforms are needed to enhance the trust in the banking system, to increase the attractiveness of the investment environment and to remove different institutional barriers,” reads the communique. In the opinion of the analysts from the Viitorul think tank, Veaceslav Ionita and Sergiu Gaibu, the Academy's report is of insignificant value. “There is enormous pressure over the Academy of Science, which should come up with solutions on a background when solutions are proposed by a number of centers, but the report has serious concept-related problems,” Veaceslav Ionita stated. According to the IDIS institute experts, the drop in remittances cannot stimulate the local output simply because the people will not buy the goods they cannot afford. On the other hand, the Academy's report should recommend the devaluation of the leu, since the currencies of the neighboring countries dropped spectacularly. Keeping a strong leu now means suffocating the Moldovan economy and stimulating smuggling cheap products from the neighboring countries, maintain the IDIS experts. They call the anti-crisis measures proposed by the Academy as commonplace, which, as a rule, are applied in the situation of normal economic life. In crisis circumstances however, firmer steps are demanded. “For example returning the VAT when buying a new dwelling to keep the constructions sector working. Offering social insurance come-ons in the case of employing people below 27. Direct anti-crisis measures, which our government has not heard of yet,” Ionita specified.