ECO-BUS WEEKLY DIGEST–December 9-15. Most important Economy & Business news by IPN

● MONDAY, December 9

Termoelectrica and Moldovagaz to develop cooperation relations

The ensuring of Moldova’s energy security through consistent high-quality service will be a strategic priority for Termoelectrica and Moldovagaz. The announcement was made in a working meeting of the managers of the two companies, Veaceslav Eni and Vadim Ceban. According to the public utility Termoelectrica, the discussions centered on the development of cooperation relations in such areas as the consumption of natural gas and the provision of reliable heat supply services for the population. Termoelectrica director general Veaceslav Eni said that Moldovagaz is a key partner of the company he manages. “The cooperation partnership between Termoelectrica and Moldovagaz is very important for us and guarantees the development of the thermoelectric sector and achievement of higher performance indicators,” he stated.

About 44,000 budget sector employees to get higher salaries in 2020

Approximately 44,000 budget sector employees in 2020 will benefit from pay raises ranging from 8% to 63%. The bill to amend the law on the common salary system in the budget sector was given a first reading by Parliament. “The bill implies costs estimated at 372 million lei a year and the given expenses were planned in the 2020 state budget and in the medium term for 2021-2022,” stated Minister of Finance Sergey Pușcuța. The about 17,500 teachers and educators will get pay raises of 750 to 980 lei, while the approximately 4,000 directors and vice directors of early education and preschool, secondary, lyceum and vocational education institutions of 820 to 2,660 lei.

● TUESDAY, December 10

Over 3,700 dwellings bought through “First House” program so far

More than 3,700 homes have been purchased as part of the governmental program “First House” since its launch so far. According to the Ministry of Finance, the banks released loans totaling 1.8 billion lei and the guarantees came to 936.6 million lei. Most of the beneficiaries are families and slightly over 1,000 are unmarried young people. The average age of the applicants is 31.3. The average area of the homes bought by means of the program is 60 square meters, while the average value of these is 590,000 lei. Only 240 dwellings of those purchased are situated in rural areas. The rest are located in towns. Only 300 are private houses and the rest are apartments.

Private detective denounces real estate scams

Private investigator Anatolie Postică, ex-head of the Internal Protection and Anticorruption Division of the Ministry of the Interior, said he possesses information that the former administrator of a real estate company based in Chisinau designed real estate scams. According to Anatolie Postică, who is an anticorruption expert, the illegalities include the hiding of transactions and non-declaring of incomes, which is tax evasion. In a news conference at IPN, the detective presented an investigation about real estate fraud published in Romania. “If we probe and more thoroughly study the criminal activity of Mister Musteață, we see that this is actually a pyramid that involves private individuals and legal entities. By this scam, based on his arguments, such real estate as apartments and houses is registered in the name of these persons.

Prosecutor general to be informed about hushing up of dangerous real estate scams

Private investigator Anatolie Postică, ex-chief of the Internal Protection and Anticorruption Division of the Ministry of the Interior, will inform the prosecutor general about the hushing up of dangerous real estate scams thought up by the former administrator of a Chisinau real estate firm. In his complaint, Anatolie Postică says there are unfinished cases featuring the former administrator as an organizer or an accomplice and a series of petitions filed to specialized prosecutor’s offices that got only formal answers. The private detective told a news conference held at IPN that the illegalities consist of the hiding of transactions and non-declaring of incomes, which is tax evasion. Anatolie Postică, who is an anticorruption expert, said he gathered new information that shows the former administrator of the real estate company resorted to new scams. Some of the company’s employees furnished him with materials such as copies of sales and purchase agreements and advance payment contracts that weren’t included in the accounting records of the firm.

Reduced dispute examination time and lower costs among advantages of arbitration

The examination of a dispute in common courts of law can last for several years, while in arbitration courts the procedure does not exceed several months. This and other advantages of arbitration were presented in a news conference at IPN in connection with the founding of the Arbitration Court of the municipality of Chisinau. The Arbitration Court’s president Alexandru Tselihov said arbitration also implies lower costs. The charged taxes are lower than in state courts. As the ruling made by the Arbitration Court is definitive, no time and money are spent on appealing. At the Arbitration Court, the conflicting parties decide by themselves the number of arbitrators who will examine the case, the procedures, the mechanism for appointing arbitrators. Any private individual who agree to settle a disagreement and who, according to a party, can resolve a dispute can become an arbitrator. Specialists in law or other competent reliable persons can also be chosen as arbitrators.

Arbitration Court founded in Chisinau municipality

The public association “Arbitration Association of the Republic of Moldova” has announced the founding of the Arbitration Court of the municipality of Chisinau whose task is to resolve national and international disputes by amicable ways, avoiding the courts of law. In a news conference at IPN, Valentin Vizant, president of the Arbitration Association of the Republic of Moldova, said the business entities’ confidence in arbitration has increased. More legal entities, companies that understood the advantages of arbitration, introduce the arbitration clause in the contracts signed with their clients. The Arbitration Association’s president said a draft strategy for developing arbitration in Moldova and a set of amendments to the normative documents aimed at increasing confidence in arbitration institutions will be soon proposed.

Arbitration is a safe method of resolving disputes, opinions

Arbitration is a safe method of resolving disputes and the development of arbitration institutions in Moldova is only to the benefit of the state and the citizens. The founding of the Chisinau City Arbitration Court was announced in a news conference at IPN. According to the president of the Chisinau City Arbitration Court Alexandr Tselihov, arbitration offers the parties the possibility of choosing by themselves the arbitrators and the method of examining disputes. If the parties do not come to terms, the arbitration institution’s president passes a judgment and designates instead of the parties an arbitrator who would handle the case. An automated random arbitrator selection program will be developed at the Chisinau City Arbitration Court.

Belarus ready to provide preferential plans for building roads to Moldova

The Republic of Belarus is ready to offer Moldova preferential loans for building roads and for other mutually advantageous projects, Ambassador of Belarus Serghei Ciciuc announced in a meeting with Deputy Prime Minister Sergey Pușcuța, Minister of Finance, IPN reports. In this connection, Serghei Ciciuc spoke about the rehabilitation of the road that bypasses Vulcănești town and a part of the belt road of Chisinau and of the section of the M1 road from Chisinau to Leușeni, up to the border with Romania. The program will be financed with a loan of the Development Bank of Belarus. “We would like these projects to be initiated as soon as possible,” stated the Ambassador.

Over 1,000 routes to be suspended because of carriers’ strike

More than 1,000 routes will be suspended and the units of transport will be parked in localities on December 11 in protest at the Ministry of Economy and Infrastructure’s refusal to increase passenger transportation fares, IPN reports. According to an announcement by the president of the Board of the Employers Association of Road Transport Operators Oleg Alexa, 400 units of transport will be parked in the Great National Assembly Square starting at 10am. Two months ago, the carriers suspended 600 routes following the Ministry’s refusal to raise fares. The executive said then the passengers should be provided with civilized travel conditions and the minibuses and buses should be intended exclusively for passenger transportation. The rise in fares will be discussed only afterward.

● WEDNESDAY, December 11

Austria’s G&G plans to expand its business in Moldova

The Austrian company Gebauer&Griller (G&G), which works in the Balti Free Economic Zone, plans to extend its operations into Moldova in 2020. Prime Minister Ion Chicu discussed the expansion plans with representatives of the company’s management in a working meeting. According to the Government’s press service, G&G invested over €40 million in its two factories in Moldova starting with 2012. The Austrian investor created over 700 new jobs in Moldova, with an average monthly salary of 10,000 lei. G&G intends to expand production on another 8,000 square meters in northern Moldova and in 2020 plans to invest €8.5 million.

Central bank cuts base rate by two percentage points

The base rate on the main short-term monetary policy operations was reduced by two percentage points to 5.5%. The decision taken by the National Bank of Moldova’s Executive Board is aimed at maintaining inflation in the variation interval of the inflation target of 5%, which is the optimal level for developing the national economy. National Bank governor Octavian Armașu told a news conference that this monetary policy decision was reached following the publication of the inflation report at the end of October. The report said the inflation rate in 2020 is expected to be lower than in 2019, when food prices rose owing to the seasonal factor, the weather and the developments on the international market. The inflation rate was rather high, reaching 7.1% at end-November. This is expected to further rise slightly in December.

Groups of agricultural producers to get financial support during five years

The Cabinet made changes to the law on groups of agricultural producers and associations of agricultural producers and excluded the notarial authentication and other conditions that, according to farmers, bureaucratized the procedure for obtaining financial support. This will be provided during the first five years of activity of the group of producers. The bill specifies the Agency for Intervention and Payments in Agriculture’s powers to regulate the conditions for setting up groups of producers and for recognizing these. It also defines the responsibilities of producers as members of the working group.

Financial arrangement for purchasing natural gas reserves signed

A financial arrangement to the value of US$50 million that will enable to purchase natural gas for supplying Moldova with natural gas if need be was signed by Prime Minister Ion Chicu and the EBRD Managing Director for Eastern Europe and Caucasus Matteo Patrone on December 11. Premier Chicu told a news conference that the commitment was signed in the eventuality that the supply of natural gas to Moldova on the traditional route, via Ukraine, will not be possible as of January 1, 2020 if the third parties do not reach an agreement. “The Government of the Republic of Moldova hopes the given operators will come to terms and we will receive natural gas by the traditional route after January 1, as until now,” he stated.

● THURSDAY, December 12

Premier Chicu about risks faced in relations with IMF

Prime Minister Ion Chicu said there are at least two risks in Moldova’s relationship with the International Monetary Fund. These refer to particular conditions that the financial institution imposes on Moldova, related to the rise in domestic gas tariffs and the IMF’s rigidness in relation to the Government’s intentions to make massive investments in infrastructure. “Our Government will continue to cooperate with everyone, but exclusively based on Moldova’s interests. We will continue to discuss when the discussions will go against the country’s interests, but will not accept conditions that undermine or annihilate our economic chances and that place an additional burden on the social sector, which means higher tariffs, taxes, etc. These are two issues we are discussing, but they are taboos,” Premier Chicu stated in the talk show “Moldova live” on the public TV channel Moldova 1.

Sergiu Pușcuța: Investments in road infrastructure in 2020 will be by 50% higher

The investments made in road infrastructure in 2019 came to over 4 billion lei, but next year the Chicu Government plans to spend more than 6 billion lei on road building and reconstruction. According to Minister of Finance Sergiu Pușcuța, the rise is of about 50%. “In general, the investment component of the budget constitutes 9.1 billion lei and 6 billion lei of this sum was planned for the restoration, development and reconstruction of road infrastructure at district and local levels,” the minister was quoted by IPN as saying in the talk show “Key Issue” produced by NTV Moldova channel. Some 2.7bn lei of the 6bn lei earmarked for road infrastructure will come from the road fund. “There are projects that will be financed with state budget funds (1.7bn lei) and with local budget funds (about 1bn lei),” explained Sergiu Pușcuța.

Moldova could receive gas through Trans-Balkan corridor as of January 1, 2020

Moldova as from January 1, 2020 will be ready to receive natural gas in a reverse flow regime through the Trans-Balkan corridor. The ȘDKRI (Shebelinka-Dnepropetrovsk-Krivoi Rog-Ismail) pipeline was reconstructed so as to allow receiving gas in reverse flow regime through the gas measuring station SMG Căușeni. According to SA “Moldovagaz”, this is the first alternative for supplying natural gas to consumers in Moldova given the uncertainty about the delivery of natural gas through the gas transportation networks of Ukraine. Through this corridor, about 700,000 consumers in the country will receive natural gas. The reverse flow will be ensured by Turkey, Bulgaria, Romania, Ukraine and Moldova. The reconstruction works will end on December 20. These cost about 10 million lei.

Centralized heating system is more advantageous in terms of costs, opinions

The centralized autonomous heating promoted by the public utility Termoelectrica SA has all the benefits of individual heating, but is more efficient from economic viewpoint. The horizontal distribution of heat can generate a cost reduction of 30%, said participants in a two-day international conference entitled “Importance of thermoelectric plants for energy security and efficiency of centralized heating. Challenges and solutions” that is held in Chisinau. According to Termoelectrica director general Veaceslav Eni, within centralized autonomous heating, each dweller of an apartment building is connected directly to the company’s networks through a thermal point in the block and can consume as much as they want. A meter measures consumption and a cost reduction of at least 30% is obtained. “We managed to reanimate the centralized heating system in the municipality of Chisinau, but this will be passive without the continuous generation of this service in cogeneration regime,” he stated.

● FRIDAY, December 13

Moldova is only country that is absent from talks on supply of Russian gas via Ukraine, expert

The contract for the supply of gas between the Russian Federation and Ukraine, which has been heatedly debated in the recent past, will be extended. This agreement cannot be stopped given that both of the states realize that they cannot halt the supply of gas to the whole Europe, said energy expert Victor Parlicov, former director of the National Agency for Energy Regulation. According to him, Moldova is the only country that is absent from the negotiations on the issue even if it is directly involved. Victor Parlicov is convinced that the contract for the supply of gas between the Russian Federation and Ukraine will be renewed. According to him, such situations when the two sides haven’t had an agreement on the matter for such a long period of time weren’t witnessed earlier. Economic expert Veaceslav Ioniță stated that Moldova hasn’t solved the energy problem yet and the market hasn’t been liberalized. Moldova does not have a clear perspective as regards the energy sector.

Aspects of supply of gas to Moldova agreed in Kiev

Prime Minister Ion Chicu said all the aspects of the supply of natural gas to Moldova through alternative routes were agreed in Kiev. “The Ukrainian side assured us that it is ready to provide natural gas and electric power to us after January 1, if any of the supply schemes does not work,” the Premier stated in a meeting in the Government Building on December 13. “I note that after yesterday’s discussion, we remain optimistic that Russia and Ukraine will reach an agreement about the transportation of gas and we will receive natural gas through the common route. What we discussed in Kiev yesterday are reserve scenarios, including the supply of gas in reverse flow regime. A number of contracts need to be signed. We are fully supported by Ukraine so that we could finish this process as soon as possible,” stated Premier Chicu

GUAM decides to develop common transport corridor

The plenary meeting of the GUAM Heads of Government held in Kiev decided to develop a common transport corridor that would connect the four countries to the main Asian markets and considered the possibility of creating a free trade zone between the four GUAM member states – Georgia, Ukraine, Azerbaijan and Moldova, Prime Minister Ion Chicu announced on his return from the neighboring state. The official said that at the economic forum held in Kiev, business entities from the four states requested the government authorities to intensify the economic and commercial relations and to finalize and implement the Free Trade Agreement.

“Air Moldova” was privatized with deviations, Court of Auditors

The privatization of “Air Moldova” airline at some of the stages was performed with deviations from the regulations. The shortcomings influenced the method of assessing the facility whose price was lower than the real market price. This is one of the conclusions of the audit report on the privatization of “AirMoldova” that was presented by the Court of Auditors. According to Viorica Verdeș, division head at the Court of Auditors, the ambiguity and flaws of the regulations allowed decision makers involved in the denationalization process to conclude the transaction with the only business entity that took part in the commercial contest and offered 50 million lei for the airline. The contract was signed on October 2, 2018.

Moldova has lowest unemployment rate on European continent, economist

The economic growth, migration and structure of the population that is dominated by the rural one make the Republic of Moldova have the lowest unemployment rate on the European continent. Economist Iurie Morcotylo, of the Think Tank Expert-Grup, has told IPN that even if the number of jobless people rose by 8,000 in the third quarter of this year compared with the corresponding period last year, from 30,000 to 38,000, the figure is not at all high when the unemployment rate is of 4%. The economist explained that the unemployment rate is low because Moldova during the last four years had economic growth. New businesses could be started and, consequently, the demand for labor force increased. The emigration of labor force also contributes to a low unemployment rate.

● SATURDAY, December 14

Russia ready to extend list of exporters of Moldovan horticultural products

The authorities of the Russian Federation assure that the Moldovan vegetables, fruit, cans and wines will have duty-free access to the Russian market in 2020 as well. This will enable the Moldovan producers to save over 300 million lei, stated Minister of Agriculture, Regional Development and Environment Ion Perju, who is paying a working visit to Moscow. In Moscow, the minister met with his Russian counterpart Dmitry Patrusev. “The good news is that the Russian side expressed its readiness to extend the list of exporters of Moldovan horticultural products and of canned and wine products,” Ion Perju posted on Facebook. The restoration of relations and efficient communication between the food safety watchdogs of the two countries was a separate subject for discussions.

NBM governor: Stability and modernization of banking sector are our priorities

The National Bank of Moldova (NBM) will continue to be the benchmark institution of the country in terms of professionalism and to develop the financial-banking sector so as to make it more stable and reliable, the central bank’s team stated in a meeting with President Igor Dodon at the Bank. According to the NBM’s press service, President Dodon assured the team that the Bank will remain independent, which is a guarantee of the stability of the financial-banking sector and an indispensable factor for sustainable economic development. For his part, NBM governor Octavian Armașu said the Bank’s priorities include the stability, credibility and modernization of the banking sector and the creation of a macroeconomic climate suitable for the development of the economy.