Press Release
on the organization of the debate “Crisis in Moldova as an indicator of missed opportunities and an occasion for changes”. Public debates series “Overcoming stereotypes of European integration by communication” held by the news agency IPN in its conference room with the support of the German Foundation “Hanns Seidel”

Held on June 10, 2020, Debate No.3 brought together: Mariana Rufa, executive director of the European Business Association in Moldova, Alexandru Muravski, ex-deputy prime minister, Ștefan Gligor, jurist, IPN project’s standing expert.

The consequences of the pandemic crisis for the economy will be felt for a long period in the future, while the economic crisis didn’t actually start and is yet to be witnessed, said participants.  Executive director of the European Business Association Mariana Rufa said Swiss and German experts forecast the economic crisis will start at the end of this year and will develop in the course of 2021.”The current developments are not a crisis, but a shock, a blow to the economy given by the pandemic. The crisis itself will yet come. An earthquake occurred and this will be followed by a tsunami,” stated Mariana Rufa.

”Currently, many aspects in the Republic of Moldova are politicized. The state institutions are at the beck and call of the ruling party and what is discussed at party meetings often becomes an axiom for ministries. Consequently, if the businesses come with a proposal to the Government without enjoying political support, this proposal will not have chances of being accepted,” said the economist.

She considers the consequences of the pandemic crisis revealed several opportunities for developing the economy that were missed. “It first of all goes to electronic trading and the government should maximally facilitate the development of this sector by promoting and protecting electronic signatures, liberalizing the market and digitizing state services. They are now more necessary than ever, but we don’t see political will to promote this process, especially at the local level. What they did there was to raise taxes. Nowhere in the world did they increase taxes during the pandemic, but in our country they did it,” she stated.

The fiscal and economic measures are the second unused possibility. “The Ministry of Finance only cancelled the audits and relaxed the report presentation process, but this is not enough as many of the enterprises remained without liquidity and lost the ability to fulfill their financial obligations. Borrowing money from a bank remained the only chance for them. But this way out is not always the best,” noted Mariana Rufa.

According to the expert, the crisis also revealed shortcomings in implementing provisions of the Association Agreement with the EU, in particular in the phytosanitary and veterinary sectors. The non-implementation of the plan in these spheres led to the blocking of crossborder exports.

Ex-deputy prime minister Alexandru Muravski also considers that improvements in the economy will not be seen after the pandemic crisis ends. “We, as the whole world, are in a state of uncertainty. The situation is new and unclear. Therefore, there are many and different forecasts. On the one hand, Europe started to return to recover and this gives hope that the borders will be opened and exports will be resumed. On the other hand, in some of the European countries, they ask to reintroduce quarantine. This turbulence generates difficulties in taking decisions, choosing models and making forecasts. When the pandemic wave only began, the world was preparing for a slight recession. Now the IMF forecasts the global GDP will decline by 5%,” stated Alexandru Muravski.

“The successful management of crises depends on the correct choice of priorities. Not everyone can be helped and a choice should be thus made,” he stated. “Whole sectors of the economy were blocked; a lot of people returned from abroad and the best solution in this situation is to remove all the bureaucratic obstacles and to maximally simplify the process of founding enterprises, up to the submission of the registration application through email, while the newly formed entities should be exempted from taxes. This way we will offer the population the chance of self-employment and self-financing. Surely, there is a risk, but this will not lead to the demolition of the country,” said Alexandru Muravski.

According to the ex-deputy prime minister, such an approach can work only if the state compensates for the fiscal risks at the expense of large companies and import businesses, if the real fight against smuggling starts, measures are taken to improve the quality of the national products and special programs are implemented to subsidize particular areas with prospects, such as organic farming.

The project’s standing expert Ștefan Gligor also anticipates a new escalation in the crisis, with more serious consequences for the Moldovan economy. “This is first of all due to the fact that the anti-pandemic measures in Moldova were late and insufficient. This led to a crisis in the healthcare system and made the stopping of the economy for two months ineffective. Secondly, Moldova didn’t find mechanisms to minimize the effects of the pandemic, like electronic governance, for example. We have to come into contact in business, in social matters and in the obtaining of state services,” he stated.

According to the expert, the healthcare system in Moldova is close to a collapse and, if it is not helped to cope with the demand, we should expect a new pandemic wave and the worsening of the economic crisis.

The Agency published 5 news stories on the debate (see the English version of www.ipn.md): on 10.06.20: Experts anticipate deepening of economic crisis in Moldova. IPN debate -
https://www.ipn.md/en/experts-anticipate-deepening-of-economic-crisis-in-moldova-ipn-debate-8004_1074090.html;  Mariana Rufa: Government is between two presses - https://www.ipn.md/en/mariana-rufa-guvernul-este-blocat-din-ambele-parti-8004_1074096.html; Аlexandru Muravski: Government’s faults diminished effect of correct measures - https://www.ipn.md/en/alexandru-muravski-governments-faults-diminished-effect-of-correct-measures-8004_1074098.html; on 11.06.2020: Stefan Gligor: Political instability will have serious consequences - https://www.ipn.md/en/stefan-gligor-political-instability-will-have-serious-consequences-8004_1074103.html;   Economists say what prevents Moldova from efficiently fighting pandemic - https://www.ipn.md/en/economists-say-what-prevents-moldova-from-efficiently-fighting-pandemic-8004_1074102.html

IPN promoted the debate before and after the event, in particular the ensuing news stories, using all the available channels, including social networks. Confirmatory materials of deliverables, as well as a media coverage dossier are attached.
 

Valeriu Vasilica, director of IPN