The government's focus on social projects, recently announced by President Igor Dodon, could have a long-term negative impact. While increases in salaries, pensions and allowances will increase government spending, no investments in the economy that would boost revenues were announced. This opinion was expressed by economists Viorel Gârbu and Sergiu Gaibu. According to them, ignoring the investment sector could have a negative impact over the years.
Economist Viorel Gârbu said that the budget has the necessary funds in order to cover these social initiatives because the announced increases by the government are not extraordinary. According to him, the question is what are Moldova's priorities and whether the decisions to spend financial resources made by political elites will sacrifice the future of the country? "We have to find a certain balance between social expenses and revenues. All political parties that governed the country always exploited the social message, whether they were right or left wing. The social initiatives have always been the main motive of electoral programs", said Viorel Gârbu.
According to him, the long-term impact could be more negative than positive, if the only focus is the social dimension. "We must never forget about the economic side, namely about the massive investments that have to be done in the economy, which require billions of lei", said the expert. According to him, Moldova is very close to the situation of stagnation and inflation, because conventional wisdom considers that rising prices stimulate production and the economy, however, Moldova produces almost nothing.
Economic expert Sergiu Gaibu is of the opinion that these initiatives appeared in the context of expectations that, most likely, the volume of funds coming from the West will shrink. “The bad part about these social promises is that they create an expectation that will have to be consistently fulfilled year by year. We are now enjoying these few hundred lei, while not making the critically needed investments, namely in areas such as infrastructure and environment", said Sergiu Gaibu.
In his opinion, Moldova needs a whole series of investments, which would also target the social sector. According to Gaibu, people put their pocket's interest first, while politicians, in particular, those on the left on the political spectrum, exploit this interest.
On Monday, November 18, President Igor Dodon, in a press conference held with the Speaker of Parliament, Zinaida Greceanîi, and Prime Minister Ion Chicu, announced that over 625 thousand pensioners will receive 700 lei aid on the eve of winter holidays. Moreover, the aid for the cold period of the year is expected to increase from 350 to 500 lei, while the indexation of pensions, starting with 2020, will be carried out twice per year.
