It’s good that the authorities suggest a lockdown with compensatory measures in a definite amount, but this is not enough. The Republic of Moldova should follow the example of other states where two priority measures are taken: supporting of the entrepreneurs with state guarantees for emergency loans so as to facilitate access to liquidity and 70-80% compensation for the reduced working hours for employees, Adrian Lupușor, executive director of the Independent Think Tank “Expert-Grup”, stated in IPN’s public debate “State of emergency: for and against, sanitary, economic and political aspects”.
“I think resources can be mobilized for implementing such a program that would not imply costs. The budget of the Republic of Moldova can cover such a program. Evidently, we will have to optimize spending from other sources. Analyzing the public finances for last year, we see that the State Tax Service and the Customs did their job rather well amid the crisis. The public finances system was maintained more or less stable,” said the expert. According to him, last year the Government didn’t have a clear political view to support the population and the firms during the pandemic. Instead, investments were made in infrastructure and this measure showed the Government aimed to modernize the infrastructure rather than to support the business entities in times of a pandemic.
“Given the pandemic and the crisis, the targeted support for those who were affected by the pandemic was very weak. The state didn’t take drastic lockdown measures and forced the firms to cope by themselves. Instead, there were built roads and other infrastructure elements as 2020 was an electoral year and the politicians preferred to spend money so as to widen their pools of voters. This is a case when a particular dose of populism and the politicians’ attitude based on electoral interests affected Moldova’s capacity to manage the most serious economic crisis during the past 20 years and the worse health crisis in the country’s history,” stated Adrian Lupușor.
Asked where the state can take additional financial resources from to cope with the crisis and to offer support to business entities, the expert said there are four sources. “The first source is the optimization of non-priority costs, like investments in infrastructure. All the resources should be directed to the health system and to support the lockdown. (2) The state budget law for this year should be amended so as to extend the domestic lending plans. The state should issue bonds, state securities so as to borrow money domestically. (3) The development partners are another source. (4) Also, there could be issued euro-bonds, as other states did,” said Adrian Lupușor.
He believes that most of the politicians are against the state of emergency because this is an unpopular measure. This is a test failed by the political elites as they didn’t manage to combine forces. “Now the Republic of Moldova needs two essential elements: the union of all the political forces in the fight against COVID-19 - we must realize the gravity of this problem as the people die and will die in a larger number yet – and the stopping of the spread of the pandemic. This issue does not have a political color. Human lives must be saved. I think all the politicians in Parliament should sit at the negotiating table and consider how to save the population from the dramatic effects of this virus. The rest can be discussed later,” urged the expert.
The public debate titled “State of emergency: for and against, sanitary, economic and political aspects” is the 178th installment of the project “Developing Political Culture through Public Debates” that is implemented by IPN with the assistance of the Hanns Seidel Foundation.
