ECO-BUS WEEKLY DIGEST December 23-29. Most important Economy & Business news by IPN
● MONDAY, December 23
Charter flights could be operated at Mărculești airport as of May 2020, PM Chicu
The Mărculești International Airport is functional and can anytime welcome different types of aircraft. Investments are needed in building a passengers terminal and developing airport infrastructure, the airport’s director Nicolae Clichici informed Prime Minister Ion Chicu, who inspected the airports in northern Moldova, in Bălți and Mărculești, last weekend. According to the Government’s press service, Nicolae Clichici showed to the Premier the 2,520 meters long runway of the Mărculești Airport, the airport equipment, storehouses, customs post and owned aircraft.
Another 150-200 Moldovan companies could export to Russia
The Russian Government this week is to approve a decision by which it would extend the export concessions for the Republic of Moldova. This refers to products classified into five tariff positions that could be exported duty-free, President Igor Dodon announced after the common meeting with the Parliament Speaker and the Premier held in the morning of December 23. President Dodon said he discussed the possibility of introducing five more tariff positions under a preferential regime with his Russian counterpart Vladimir Putin. “Also, another 150-200 companies operating in the Republic of Moldova will be allowed to export to the Russian market in the nearest future,” stated Igor Dodon.
Russian businessman takes over Avia-Invest
Russian businessman Andrei Goncharenko became the new beneficiary of Komaksavia Airport Invest Ltd that owns 95% of Avia-Invest after NR Investment Limited conceded control over the company. “During the last few years, the airport, being managed by Avia-Invest, developed dynamically. It’s clear that the further development of the airport as a regional transport center between Europe and Asia depends on the volume and stability of the attracted investments. Among my priorities is the building of a runway for large aircraft and of a new terminal that will be the most modern one in the region,” stated Andrei Goncharenko, being quoted in a press release of Avia-Invest, which manages the Chisinau International Airport.
Cases of African swine fever reported in “Pădurea Domnească” reserve
A hotbed of African swine fever was identified in the natural reserve “Pădurea Domnească” and in the adjoining wooded strips situated in Fălești district. Fifteen animals were found dead in the area since December 17 until December 23. Lab analyses confirmed the presence of the virus and the animals were burned. Vitalie Carauş, head of the Animal Health and Welfare Division of the National Food Safety Agency, said the area will be in quarantine for a year. The commission for emergencies is disinfecting the territories so as to prevent the spread of the virus to other wild boars in the forest.
● TUESDAY, December 24
Igor Dodon: Lending agreement with Russia is to be ratified in February
President Igor Dodon said the ministries of finance of the Republic of Moldova and the Russian Federation next January are to close the negotiations on the provision of the promised US$ 500 million loan. At one of the first sittings of Parliament next year, this agreement should be ratified. This way, the infrastructure projects that are planned to cover a large part of Moldova’s territory could be kicked off. “I discussed this matter with Vladimir Putin and with Dmitry Kozak and I think the negotiations between the Ministry of Finance of the Republic of Moldova and the Russian Ministry of Finance will end in January and this agreement should be ratified at one of the first sittings of Parliament in February. I think this is real and we could launch the infrastructure projects,” President Dodon stated in a program on NTV Moldova channel.
People prefer to borrow money from banks for two to five years
The new loans provided by banks last month came to 2.906,9 billion lei, an increase of 12.8% on last November. In terms of the repayment period, the loans repayable in two to five years were the most attractive ones, representing almost half of the released loans. The loans granted to legal entities constituted 35.5% of the released loans. According to the National Bank of Moldova, the loans in national currency represented 61.3%, in foreign currencies – 36.5%, while those linked to the exchange rate of the currency – 2.2%.
Largest passenger terminal in region to be erected at Chisinau airport
The company that manages the Chisinau International Airport presented the draft design of the new terminal that will be 55,000 square meters in area and will serve about 4.2 million passengers a year, but could be extended to 4.5 million passengers a year. In a press release, the company said the future terminal of the airport will have five telescopic passageways for passengers to get onto and off the plane. The Big Arrivals and Departures Hall was projected so as to enable extending the terminal without affecting the operational process. During the construction works and after the new terminal is put into operation, the functionality of the old terminal will not be affected.
Ion Chicu: We aim to restore dialogue with all foreign partners
The Government pursues a balanced foreign policy and this means that the European integration course will be continued. There is wish to restore the dialogue with all the foreign partners, including the Russian Federation and other CIS states, Prime Minister Ion Chicu stated for IPN News Agency in a video interview. He noted the relations with the neighboring states are absolutely important for any country, especially for Moldova as it has only two neighbors. “We worked out the Government’s action plan that stipulates more than 1,000 measures and you will see that the main chapters refer to the European integration and the justice sector reform. Last Friday, I had a meeting with all the ambassadors working in Chisinau and presented this action plan to them. They convinced themselves that our actions on the European integration dimension are the main part of this program and we enjoy their support,” stated Premier Chicu, noting that he will go to have discussions where there are economic interests and such a position is welcomed by the Europeans and the Americans and these see no contradiction in this regard. Speculations on the issue are made primarily at internal level.
● THURSDAY, December 26
Moldovagaz president: Debt to Gazprom is commercial
The president of Moldovagaz Vadim Ceban said the accumulated debt to the Russian company Gazprom is a commercial debt of Moldovagaz. The debt for which the right side of the Nistru River is responsible is of US$ 715 million, US$ 265 million of which represent penalties. “The penalties could be annulled if the conflict is resolved, but a relevant agreement should be in place. Moldovagaz is currently unable to clear the Transnistrian region’s debts by its assets. We do not have such assets,” Vadim Ceban stated in the program “Important” on TVC21 channel.
Over 3,800 homes bought through “First House” program so far
More than 3,800 homes have been purchased through the governmental program “First House” since its launch. According to the Ministry of Finance, the banks lent a total of over 1.9 billion lei for the purpose, with the guarantees coming to almost 957 million lei. Most of the beneficiaries are families, while slightly over 1,000 are unmarried young people. The average age of the applicants is 31.3. The average area of the dwellings bought through the program is 60 square meters, while the average value of a home is 591,000 lei. Only 241 of all the bought homes are situated in rural areas, the rest being in towns.
Over 50% of transfers intended for Moldovans come from EU
A sum of US$ 101.4 million was transferred to Moldovans through licensed banks this November, a decrease of 2.1% compared with last November. Transfers from the EU represented 50.3%, from the CIS - 19.7%, while from the rest of the countries – 30%. Transfers from Russia constituted 18.6%, down 4.7 percentage points on November 2018, from Israel – 18.4%, from Italy – 11.6%, from Germany – 9%, from the UK – 8.3%, from the U.S. – 6.7%, from France – 6.3%. Transfers in euro represented 58.4%, a decrease of 6.7 percentage points compared with November 2018. These are followed by the transfers in dollars, with 37.9%, down 4.4 percentage points. The transfers in Russian rubles constituted 3.7%, down 2.3 percentage points.
Payment of salaries to Moldova’s Railways employees CFM in the focus
The employees of the state-owned company Moldova’s Railways, in a meeting with Prime Minister Ion Chicu at the Basarabeasca railway terminal, complained that they received the salaries for the last two months only now. The Premier noted the administration is fully responsible for the payment of salaries in time, noting the nonpayment of salaries is inadmissible. At the Basarabeasca railway terminal, Premier Chicu inquired about the salary payment situation and the administration’s plans for overcoming the economic and financial difficulties faced by the company. The administration of the Basarabeasca local office informed the Premier about the steps taken to remedy the situation and the plans to modernize the infrastructure so as to enhance competitiveness of railway transport in Moldova.
Gas tariff for industrial consumers in Transnistrian region raised
Starting with next January, the price of gas for industrial consumers based in the Transnistrian region will be by 10% higher. The Transnistrian administration estimates that the local budget will gain 30 million Transnistrian rubles as a result. The local press quoted the so-called minister of economic development Sergey Obololonik as saying that the rise will not affect household users, social facilities and budget-funded institutions.
Post of director general at Metalferos filled
The joint stock company Metalferos has a new director general. This is Igor Cujba, who was presented to the staff by the director general of the Public Services Agency (PSA) Mihail Rusu on December 26. According to the PSA, Igor Cujba was chosen at a contest. During the past three years, he worked in Bucharest and managed a number of private companies. Earlier, he served with Mechel Service Global in Romania and Poland. Before leaving the country, he worked in the police force for 15 years, holding also executive posts, such as that of head of the Ungheni and Nisporeni Police Inspectorates.
Pays of most of ICT sector employees exceed 10,000 lei
Some 54% of the persons working in the information and communications sector in September received a salary of over 10,000 lei and only 6% got a salary of 2,000 to 4,000 lei. The public food and accommodation sector is at the other pole as only 5% of the employees there got a monthly pay of over 10,000 lei, while 50% were paid 2,000 to 4,000 lei. According to the National Bureau of Statistics, salaries higher than 10,000 lei are paid to 40% of the employees working in the financial and insurance sectors and to 24% of those working in the public administration and defense sector.
● FRIDAY, December 27
Municipal budget for 2020 approved in two readings
The revenues of the 2020 municipal budget of Chisinau will exceed 4.3 billion lei, an increase of 11% on 2019. The expenditure was planned at 4.6 billion lei and is by 9.4% higher than his year. The draft budget adopted by the municipal councilors after giving it two readings on December 26 provides for a deficit of almost 300 million lei. Acting head of the General Finance Division Olesea Pshenitski said the rise in local taxes will bring revenues of 32 million lei into the municipal budget. Of all the revenues, 57% will be transfers, 29% – deductions, 11% – own revenues and 3% - collected revenues.
A series of local taxes in Chisinau to be higher next year
A number of taxes applied in the municipality of Chisinau will be higher in 2020. The decision approved by the Chisinau Municipal Council in the December 26 meeting provides that the trading units that are up to 20 square meters in area and will sell cigarettes next year will pay a tax of 10,000 lei for each cash register, while those that are more than 20 square meters in area – 20,000 lei. This year they paid a tax of 5,000 lei. According to the draft decision presented by the acting head of the General Finance Division Olesea Pshenitski, the public food units with more than 50 places will pay a tax of 10,000 lei, as opposed to taxes of 5,000 and 7,000 lei paid in 2019, depending on the particularities of their activity. The tax for a car wash was raised by 1,000 lei, from 2,000 lei to 3,000 lei.
Adjustment of fares is contingent upon comfort enhancement, statement
The authorities accepted a differentiated rise, of 0.12 and 0.22 bani per km, in the case of interurban routes, but put forward a number of conditions, including to implement a classification according for comfort categories. On the other hand, the carriers said the rise is only a first step that is not sufficient for them to be able to renew the buses or minibuses. In a news conference after the talks with carriers, Minister of Economy and Road Infrastructure Anatolie Usatyi said an instruction concerning the classification of buses and minibuses according to comfort categories will be approved. The units of transport that will not meet the mandatory criteria will not be allowed to run on routes. “There is one more very important question concerning the payment of taxes, the underground economy, the illegal transportation of passengers,” stated the minister.
Ceiling for untaxed postal parcels lowered
The postal parcels whose value exceeds €200 will be taxed as of January 1, 2020. “Currently, the ceiling is €430 if the parcels come by air or sea and €300 if these come by land. As from January 1, 2020, these ceilings of €430 and €300 will be diminished to €200. This means that the parcels worth more than €200 will be stopped at the Customs Service and the persons who ordered them will have to pay import taxes, VAT and customs duties,” Dorel Noroc, secretary of state at the Ministry of Economy and Infrastructure, explained. According to the official, this refers to postal parcels used for personal purposes. When the persons order something online and then sell these products at the market, this is an illegality.
Payment of VAT by Google, Facebook and other nonresidents put off until April
The payment of VAT by international companies that provide electronic services for private individuals, such as Facebook, Google and other nonresidents that use different applications on Moldova’s territory, was postponed until next April. Initially, the 2020 draft budgetary-fiscal policy provided that this VAT will be applied as of January 1 next year. It was also envisioned that these companies will be obliged to register with the State Tax Service. Dorel Noroc, secretary of state at the Ministry of Finance, said the decision to put off the application of VAT was taken by the Government at the Parliament’s suggestion.
Monthly average salary in 2020 will be higher
The official monthly average salary in 2020 will be 7,953 lei, as opposed to 6,975 lei in 2019. This was calculated based on the macroeconomic indicators for 2020-2022 forecast by the Ministry of Economy and Infrastructure.
Interest on bank deposits will be exempted from income tax for one more year
The interest on bank deposits collected by private individuals will be exempted from income tax for one more year. The measure is aimed at ensuring the stability of the lending-banking market and at more thoroughly analyzing the possible implications of such a norm. Dorel Noroc, secretary of state at the Ministry of Finance, said that when the budgetary-fiscal policy started to be discussed, it was the second half of November and not much time remained for carrying out a detailed analysis on this segment. “It was hard for the banking system to adjust its software or to create mechanisms for paying this tax on each depositor in such a short period of time. It was thus decided to put off the measure for a year,” stated the official.
Solutions are being looked for to unify taxes in agriculture
The Ministry of Finance aims to identify a solution for applying a common tax in agriculture within a working group that will includes farmers. Dorel Noroc, secretary of state at the Ministry of Finance, said VAT rates of 8% to 20% are applied at present. The tax rate of 8% causes the biggest problems. As this tax rate is applied to a wide range of products, the budget losses are big. Dorel Noroc said letters will be sent to farmers association, asking these to delegate representatives to work on the group that will analyze aspects of VAT in agriculture. This remains a priority for the first half of next year, when particular proposals will be formulated.
● SATURDAY, December 28
Official reserve assets meet all sufficiency criteria, NBM
The official reserve assets are almost US$3.053 billion. They meet all the sufficiency criteria and ensure about 4.7 months of forecast imports of goods and services, the minimum recommended level being of three months. According to the governor of the National Bank of Moldova Octavian Armașu, this fully covers the foreign public debt in the short term and this way supports Moldova’s credibly at international level. In a common interview for the press, the governor said these are the assets that the National Bank can use and control at any moment to support the balance of payments, to manage the exchange rate by intervening in the market and to keep confidence in the national currency and the national economy in general.
Octavian Armașu: A reduction in inflation is expected in 2020
National Bank governor Octavian Armașu said that for 2020 they will be considering the opportunity to further diminish the value of monetary policy instruments. “This opportunity refers to the creation of monetary conditions that can maintain inflation in the variation interval of ± 1.5 percentage points from the inflation target of 5% in the medium term. This way, by targeting the inflation, the National Bank aims to ensure the stability of prices,” the governor stated in a common interview for the press. Octavian Armașu said the last monetary policy decision of the National Bank fully reflects the previous inflation forecast.
Central Securities Depository will establish ties with similar foreign institutions
The Central Securities Depository (CSD) will establish relations with similar foreign institutions. This will significantly facilitate feign investment in securities issued in Moldova. It is also planned to create a platform for private investors, which will enable, for example, any citizen of the country to purchase state securities. In a common interview for the press, National Bank governor Octavian Armașu said the results achieved by the CSD speak for themselves. The CSD was created last April. In only four months of the founding, in July 2018, it managed to initiate operations with state securities and instruments of the National Bank of Moldova. In May 2019, the Depository launched operations with securities issued by joint stock companies. Connection was ensured with nonbank investment firms and the stock exchange so that all the operations on the stock exchange are settled through the CSD.
Automated payment of compensations for power disconnections put off
The implementation of the automated mechanism for paying compensations to end users that the electric power distribution system operators must use if they exceed the number and length of allowed disconnections was put off for a year. The National Agency for Energy Regulation (NAER) approved relevant changes to the regulations concerning the quality of electric power transportation and distribution services. The adopted amendments provide that the implementation of the automated payments system implies the development of data collection and invoicing software. Therefore, the automated payment mechanism will start to be applied on January 1, 2021, not on January 1, 2020, as planned initially.
Agreement on supply and transit of natural gas after January 1, 2020 signed
The Gas Transmission System Operator of Ukraine, Moldovatransgaz and Moldovagaz signed a tripartite cooperation agreement concerning all the interconnection points of the transportation systems of Moldova and Ukraine (Alexeevka, Grebeniky, Căuşeni, Ananyiv, Limanskoe). The agreement will ensure the supply and transit of natural gas as of January 1, 2020.
