The rising energy and raw material prices will inevitably lead to higher consumer prices, say representatives of the Light Industry Employers’ Association, who say that the sector could use some governmental subsidies in this situation.
During a debate titled “The situation of SMEs after two years of coronavirus pandemic and in the context of the Ukraine war”, organized by the National Business Agenda, the Association’s president Silvia Lazu said:
“The biggest problem of our industry is that we are not subsidized in any way, we are not supported by the Government at all. The energy crisis turned the whole process upside down. With the surge in gas and electricity prices, the prices of our products will increase as well, which will affect our domestic and foreign consumers, too. We will not be able to deliver on orders on time (…) Currently, 80% of the producers in our sector are looking for alternative energy resources to replace natural gas”.
Businesses believe that the state should get more involved in promoting domestic production both for domestic consumption and for export. “We don’t have to ban imports, but we have to promote our growth and bring our local products to the local consumer: clothes, footwear, food products”, said Alexandra Can, CEO of the leather goods manufacturer Artima.
“Moldova is going through three unpleasant phenomena, which are unprecedented in our country’s history. We are in the third year of a continuous crisis combining the pandemic, the energy crisis and the Ukraine war. There is no other country in the region that depends as much on Ukraine as the Republic of Moldova. We are dependent on imports from Ukraine, food in particular. There is no other country that relies on Ukraine for as much as 35% of its imports. And we used to export to Ukraine as well. Obviously, all these aspects affect business. In addition, the National Bank tightened the monetary policy a lot, causing issues that nobody wanted. Individuals and small businesses are affected. Small businesses are forced to migrate from cheaper money offered by banks to more expensive money offered by the non-banking sector”, said economist Veaceslav Ioniță, of the IDIS Viitorul.
Yet, state representatives say the Government offers support through several programs where the state contributes 50% or more. “The range of programs (with governmental participation) has increased. We now have 7 active programs in addition to business guidance support. Until now the problem with the old Organization for SME Support was that if you weren’t a woman, a migrant or a young person you didn’t have access to funding. Now, if the idea is good, we help to implement it”, said the deputy director of the Organization for Entrepreneurial Development, Marin Gherciu.
