ECO-BUS WEEKLY DIGEST July 27 July- 2 August. Most important Economy & Business news by IPN
● MONDAY, July 27
We are at final stage of negotiations with IMF, Ion Chicu
Prime Minister Ion Chicu said the Republic of Moldova is at the final stage of negotiations on a new three-year program with the International Monetary Fund. “We reached agreements on the largest part of aspects, including the fiscal one. We didn’t assume any commitment to introduce new taxes or to make fiscal administration and, in general, the fiscal burden on business entities and the people harsher,” stated the official. After the working meeting with President Igor Dodon and Parliament Speaker Zinaida Grechanyi, Premier Chicu said that the agreement on the provision of €100 million in financial assistance with the EU will be approved in the 29 July meeting of the Cabinet.
Farmers of Ștefan Vodă and Căușeni demand to declare state of agricultural emergency
The famers of Ștefan Vodă and Căușeni are protesting at the entrance to Căușeni town, dissatisfied that the Government proposed no solution to the disastrous situation faced in the agricultural sector. The protesters came with tractors that they parked by the roadside. The farmers demand to declare a state of agricultural emergency in the central and southeastern districts of the country and to issue force majeure certificates so as to enable the farmers to reschedule their debts to banks. Among other requirements are the exemption from paying salary income taxes and land taxes during 12 months, institution of a moratorium on the payment of delay penalties related to these taxes and covering of at least 50% of the losses sustained by agricultural enterprises due to hail.
● TUESDAY, July 28
IMF staff concludes consultations with Moldova on a new economic program
IMF staff and the Moldovan authorities have reached staff-level agreement on an economic reform program to be supported by three-year Extended Credit Facility and Extended Fund Facility (ECF/EFF) arrangements. It would allow Moldova to access about US$ 558 million of financial assistance. The new program will build on progress made under the previous program and strive to support Moldova’s post-pandemic recovery, and advance ambitious institutional reforms, IPN reports, quoting a press release of the IMF. An International Monetary Fund (IMF) mission, led by Ruben Atoyan, held discussions remotely from the IMF Headquarters in Washington, D.C. with the Moldovan authorities during July 7-24, 2020 on an IMF-supported economic program.
Ion Chicu: Up to 250m lei will be provided to farmers in assistance
The Government is ready to help the farmers and the executive during the next few days will have meetings and discussions with representatives of the agricultural sector. There was identified up to 250 million lei that will be provided to farmers in assistance in this difficult period for agriculture, Prime Minister Ion Chicu stated in a meeting with Democratic and Socialist MPs and the President. A number of farmers on July 27 mounted a protest to show their dissatisfaction with the Government’s inaction in helping them to deal with the consequences of the drought. They asked to declare a state of agricultural emergency.
New program of cooperation with IMF totals about US$ 558m
The value of the new economic reform program for 2020-2023 between the Republic of Moldova and the International Monetary Fund (IMF) is of about US$ 558 million. Prime Minister Ion Chicu had a discussion with the IMF mission led by Ruben Atoyan, during which there were agreed the last details concerning the new program. According to the Government’s press service, the financial assistance will be used to revitalize the Moldovan economy, to support Moldova’s post-pandemic recovery and to implement institutional reforms. The memorandum between the Republic of Moldova and the IMF will be discussed by IMF Management and the Executive Board expectedly in September.
Moldovan leu was unstable at start of pandemic, but then appreciated. Experts explain
The Moldovan leu oscillated between appreciation and depreciation for many times at the beginning of the COVID-19 pandemic, witnessing the widest oscillations in the past few years. It didn’t depreciate further because the National Bank of Moldova (NBM) intervened and the market was stabilized. Afterward, it even appreciated by 3.5% compared with the start of the year. Economic expert Veaceslav Ioniță has told IPN that the Moldovan leu is stronger than the currencies that are critical for Moldova, such as the Hryvnia of Ukraine and the Lira of Turkey. “Most of the consumer goods and agricultural products that we consume come from these two countries. The Moldovan leu is by 13% stronger than the Ukrainian Hryvnia and Turkish Lira. This means that the goods imported from Turkey and Ukraine at present, only because of the currency exchange rate, are by 13% cheaper than the Moldovan goods,” explained the economist. Economist Alexandru Fala, programs director at the Independent Think Tank “Expert Grup”, stated for IPN that the Moldovan leu has developed stably and even appreciated. Particular depreciation could be seen, but the market became stable in time and serious fluctuations are not expected. “We had a sudden decline in revenues during a very short period of time and, evidently, imports decreased owing to those actions that blocked the economic activities globally. The two phenomena occurred concomitantly,” stated Alexandru Fala.
Damage caused by drought to wheat exceeds 700m lei
The damage caused by the drought to wheat fields was estimated at over 700 million lei, while that done to barley and rape – at 100 million lei. In total, of the 415,000 hectares sowed in autumn, more than 180,000 hectares of wheat, barley and rape were over 60% affected. Within the total area, almost 43% of the fields were over 60% affected. Prime Minister Ion Chicu presented the data, saying the Government is to approve regulations concerning the distribution of funds for partially covering the losses sustained by farmers. In a press briefing, Premier Chicu said 322,000 hectares were sowed with wheat. Of these, 215,000 hectares were 25% affected in northern Moldova and 60% to 100% affected in the central and southern districts. “The productivity of the affected wheat fields is very low, of 0.3-1.2 tonnes per hectare in most of the regions. The global wheat production this year will be 600,000-650,000 tonnes, while internal consumption totals 350,000 tonnes. So, we could export about 300,000 tonnes of wheat,” stated the official.
● WEDNESDAY, July 29
Chamber of Commerce launches first platform for virtual exhibitions
The Chamber of Commerce and Industry launches the platform “Virtual Exhibitions” in a move to support the small and medium-sized enterprises. “This is a single platform in the Republic of Moldova, which will enable us to organize the activities we planned for this year, such as the exhibition “Moldova Presents” in Iasi, Braşov, Baia Mare or in Prague, Bucharest and Moscow,” said the Chamber’s head Sergiu Harea. The platform will have such divisions as: exhibition hall where there will be displayed the logos and brands of companies that are part of this exhibition; virtual stands where the company will present its products; conference hall. The companies that want to take part should present relevant information to the Chamber of Commerce and Industry of the Republic of Moldova so that it is digitized.
National Farmers Federation demands to declare force major situation in agriculture
The National Farmers Federation of the Republic of Moldova requests Parliament and the Government to declare a force majeure situation in agriculture for the agricultural producers that were affected by drought. They also ask that the agricultural produces affected by drought should be exempted from paying particular taxes, while the purchase of the necessary seeds and fertilizers should be 75% subsidized. In a statement, the Federation said that if efficient measures are not taken to overcome the crisis situation in agriculture, it will call on the professional organizations operating in the field to mount large-scale protests. The Administrative Board of the National Farmers Federation repeatedly expresses its concern about the situation created in agriculture due to the natural disasters, in particular the drought. The concern also refers to the lack of swift and efficient measures on the part of the state for alleviating the consequences. The farmers who were seriously affected by drought simply cannot cover the costs for continuing producing.
New conditions for providing compensations within “First House” program
The new conditions for offering compensations within the state program “First House’” took effect. They offer the possibility of befitting from state budget support when paying the home loan to all the program’s beneficiaries, IPN reports, quoting the Ministry of Finance. The value of compensations intended for families with children was doubled. The beneficiary parents and persons who have guardianship of a child will benefit from a compensation of 25% of the home loan. The families with two children will get a compensation of 50%, while the families with three and more children – of 100%. The value of the monthly compensation was raised from 10% to 15% of the salary calculated for beneficiaries working for private sector entities based in the municipality of Chisinau. The public or private sector employees whose dwellings are higher in value than 600,000 lei will also be entitled to state budget compensations. There was set the mechanism for providing compensations equal to 50% of the balance of the loan to persons who raised a home loan before the launch of the program and meet the eligibility criteria.
Working group to examine proposals formulated by carriers affected by pandemic
A working group will be set up to consider the issues proposed by managers of transport associations who had an online meeting with Prime Minister Ion Chicu on July 29. The group will consist of representatives of carriers and of competent institutions. The first meeting will be held on August 18. According to the Government’s press service, the representatives of the freight, passenger and taxi transport sectors invoked the disloyal competition and abuses committed by inspection bodies. They also referred to the cost of authorizations, refunding of excise duties, payment of taxes in advance and liberalization of the insurance market. Furthermore, the carriers asked to modify provisions of the normative and legislative documents so as to exclude the barriers that endanger and hamper their activity. Given that the pandemic crisis led to a decline of almost 50% in the activity of carriers during the past five months, they ask for financial support.
● THURSDAY, July 30
National Incoming Tourism Association launches new types of tourism routes
The National Incoming Tourism Association of Moldova has launched three new types of tourist routes: hikes, kayaking and cycling. These were developed by tourism operators with support from the development partners - USAID, Sweden and UK Aid, through the Moldovan Competitiveness Project (MCP). The tourists could go on hikes in Codrilor region, near Sadova village, at Crama Tudor, which is a small winemaker, could go kayaking or boating on the Răut, in the cultural-natural reserve Orheiul Vechi or on the Nistru, developed by Kayaking Tours, or could ride along a new cycling itinerary on the Chisinau–Palanca road, developed by Velo Point. The three tourism service providers (Crama Tudor, Kayaking Tours, Velo Point) benefitted from grants and assistance from the Moldovan Competitiveness Project in purchasing bicycles, kayaks, equipment that increased the quality of the provided tourism services.
● FRIDAY, July 31
A new attack with gases, Op-Ed
“The mentioned examples emphasize how important was the Constitutional Court’s decision to declare unconstitutional the agreement to borrow €200 million from Russia, which contained references to debts of business entities.”
Waiting for Ungheni-Chisinau gas pipeline
Minister of Economy and Infrastructure Sergiu Railean informed us that: “Until August 1, 2020 we will be ready to put the Ungheni-Chisinau gas pipeline into operation. At this stage, 1.5 million m3 of gas a day could be supplied through the gas pipeline, while by December 1, we could ensure the transportation of 2-3 million m3 of gas a day. After the compressor and gas pressure regulation station is built in Gherăești, by January 1, 2021 we could transport 4 million m3 of gas a day to the Republic of Moldova”. This is a reason for joy for the citizens after we have waited for the diversification of the imported energy agents for so many years, especially of natural gases. We know, for example, that the works to build the aforementioned gas pipeline were to start in 2016, but started only in 2019. Elementary calculations show that during the five months that remained till this yearend, we could import over 200 million m3 of gas through the Ungheni-Chisinau gas pipeline, while from January 1, 2021, we could important over 1.4 billion m3 annually. Given that the Republic of Moldova during the past few years consumed approximately 1 billion m3 of gas a year, through the Ungheni-Chisinau gas pipeline alone we could import by 40% more gas than the country’s economy and the citizens consume. We will yet see how the regulations work and how the competition between the gas suppliers of Romania and Russia’s Gazprom develops. One thing is for sure - things go in the right direction.
WB offers financing package of$15 million to Moldova to help modernize food safety system
The World Bank’s Board of Executive Directors approved a financing package of$15 million to the Republic of Moldova for the Third Additional Financing for the Moldova Agriculture Competitiveness Project (MACP), which will support the modernization of the country’s food safety system. A press release issued by the World Bank Office in Moldova says Moldova’s predominantly agriculture-based economy relies heavily on agricultural production and agri-processing in Europe and Central Asia region. Given the prominence of the sector, EU standards compliant food safety and quality control systems are essential for the continuous growth of the sector, exports, public health considerations and environmental protection.
NAER decides to lower electricity tariffs
The domestic users served by “Premier Energy” SRL, who are connected to low voltage power lines, of 0,4 kV, will pay an electricity tariff of 1.68 lei/kWh, by 0.21 lei less than until now. The decision was taken by the Administration Board of the National Agency for Energy Regulation (NAER) on July 31. The household users served by “Furnizarea Energiei Electrice Nord” will pay 2.14 lei/kWh, by 0,085 lei/less. The lowering of tariffs was possible owing to the reduction in the average purchase price of power, from 1.63 lei/kWh to 1.46 lei/kWh or 10%. The decision was also influenced by the 7% decrease in the purchase price of power and the positive tariff deviations accumulated until July 1, 2020. The evolution of the average annual exchange rate of the national currency against the U.S. dollar was another factor.
Over 61,000 tickets sold during past five months for flights that were cancelled
More than 61,000 tickets for flights that were canceled because of the restrictions imposed in connection with the COVID-19 pandemic had been sold since March until July 10. The buyers of over 17,500 tickets accepted other options than the refund of the ticket price, while about 3,000 buyers got a refund, director of the Civil Aviation Authority Eugen Coștei told Minister of Economy and Infrastructure Sergiu Railean in a meeting. According to the Ministry’s press service, during the first six months of this year, there were carried over 506,000 passengers, a 63% decline compared with the corresponding period last year, when 1.343 million passengers were transported.
Regulations on packing and packing waste approved
The Government approved the regulations concerning packing and packing waste. Minister of Agriculture, Regional Development and Environment Ion Perju said the working out of this document is stipulated in the national action plan for implementing the Association Agreement signed with the EU. The regulations stipulate a series of norms regarding the management of packing waste aimed at preventing and reducing the impact on the environment and human health. The minister said waste management implies rather large costs for achieving the relevant objectives. In the EU member states, in accordance with the guidebook on the Extended Producer Responsibility, the costs paid by producers per tonne of packing material placed on the market vary between 14 euros/tonne (UK) to 200 euros/tonne (Austria), with an average of 92 euros/tonne.
● SATURDAY, August 1
Cămara Fest welcomes visitors in Square of Metropolitan Cathedral
The Cămara Fest fair held on August 1 starting at 10am brings together national producers, primarily of berries, that exhibit their products in the Square of the Metropolitan Cathedral in central Chisinau. The event’s organizer Diana Crudu said that about 45 national producers from all over the country confirmed their participation. Emphasis is placed on berries as they are transported in special conditions and their export is difficult. “We want to lend a hand so that these people during the pandemic that is a difficult period for everyone sell all their products,” stated Diana Crudu. Given the restrictions determined by the epidemiological situation, social distancing between producers and buyers will be maintained and each participant will have masks, gloves and disinfectant on the table. There will be volunteers who will make sure that the rules are obeyed.
Ungheni-Chisinau gas pipeline was to be completed by August 1
The implementers of the Ungheni-Chisinau gas pipeline project initiated the procedures for the receipt of the works on the Ungheni-Chisinau gas main. Together with specialists of the Technical Surveillance Agency, a series of technical checks are being performed, the Ministry of Economy and Infrastructure stated for IPN after SRL “Eurotransgaz” at end-May announced that the gas pipeline will be ready by August 1 this year. The Ministry noted that the official launch of the Ungheni-Chisinau gas pipeline will take place immediately after the epidemiological situation in the country permits. Information about the place and date of the launch will be provided later. As representatives of the investors assured, 1.5 million m3 of gas a day could be supplied through the gas pipeline at the current stage. After the compressor and gas pressure regulation station is built in Gherăești, as of January 1, 2021 there could be transported 4 million m3 of gas a day to the Republic of Moldova”, while as from October 1, 2021 – up to 6 million m3 of gas a day.
