The announcement made by the administration of the Transnistrian region, about the halt in inspections and particular tax concessions, will represent a positive step, but the region’s economy necessitates more radical steps aimed at changing its structure, considers Iurie Morcotylo, expert of the independent think tank “Expert-Grup,”. In an interview for Radio Free Europe, this said that the Transnistrian region during the next few years should be restructured at economic level, IPN reports.
The expert noted that the first challenge resides in the fact that 45-48% of the region’s active population works in the public sphere. On the right bank of the Nistru, this figure stands at 20-25%. Secondly, the region and its budget depend a lot on the collected taxes, in particular from several local giants. The small and medium-sized sector of the economy is very restricted.
The third risky aspect is the fact that the capital and companies are excessively concentrated in one hand. The conglomerate Sheriff controls the region’s most profitable areas and does not allow competition in these areas. If the telecommunications sector, trade in fuel and other sectors are not opened, it will be very hard to stimulate economic competition and to improve the entrepreneurial environment in the region.
Iurie Morcotyrlo also said that in January Tiraspol decided to make public the process by which money from natural gas consumption is accumulated in the relevant fund. “By our estimates, this fund annually collects about US$400-450 million,” he stated. According to him, there are reports showing that the so-called ministry of finance takes out loans at interest rates ranging from 0% and 1% a year at a time when any bank in the region can release loans at an interest rate of at least 7-8%. “The so-called ministry of finance takes out a loan of 1-2 billion Transnistrian rubles a year, which is about US$150-170 million, at an interest rate of 0%, while the source in the given reports is not indicated. So, we can draw the conclusion that this money is from the so-called reserve fund.”
The expert noted that the region’s budget deficit during the last three-four years has been covered with such loans. There is only one possible source of funding – the indirect budget support provided by Russia. All the money for financing social and budget projects comes from gas consumption. Without such a source, the region wouldn’t have been sustainable from financial viewpoint and would have gone bankrupt as the level of consumption and incomes in the region does not correspond to the costs.
