Visit
by Mr. John Odling-Smee, Director of the IMF’s European II Department
Mr.
John Odling-Smee, the Director of the European II Department of the
International Monetary Fund, will visit Chisinau during May 7-9, 1998 to hold
discussions with the Moldovan authorities.
Mr. Odling-Smee, a national of the United Kingdom, is a leading expert
and international official on economies in transition and economic and
financial developments in the Baltic states, Russia and the other countries of
the former Soviet Union, having headed the European II Department from the
time of its creation by the IMF in 1991, in order to direct relations with the
new member countries of the former USSR.
The European II Department is one of six IMF “area departments,”
which are responsible for on-going relations with IMF member countries,
including negotiation and monitoring of IMF credit arrangements; other area
departments are the Western Hemisphere, Asia and Pacific, European I, African
and Middle Eastern Departments.
During his visit, Mr. Odling-Smee is expected to meet
with President Petru Lucinschi, Parliament Speaker Dumitru Diacov and other
parliamentary leaders, NBM Governor Leonid Talmaci, members of the former
Moldovan government, prospective members of the future government and
representatives of the business and diplomatic communities.
Relations
between the Republic of Moldova and the IMF continue to be guided by the
three-year, SDR 135 million (approximately US$190 million) Extended Fund
Facility arrangement approved by the IMF’s Executive Board in May 1996.
Three tranches worth SDR 37.5 million have been disbursed to the NBM
under the EFF arrangement, the most recent in mid-July 1997.
The current level of IMF support to the Republic is approximately
US$240 million.
Mr.
Odling-Smee’s visit comes shortly after an IMF Executive Board meeting on
April 20, 1998, during which economic policies and developments in Moldova
during 1997 and the first quarter of 1998 were discussed (Article IV
Consultations). IMF Executive
Directors commended the Moldovan authorities for continued progress during 1997
in several areas, despite a difficult political background.
The directors welcomed, in particular, the further reduction in
inflation, the first annual increase of GDP since independence, and progress in
energy and agriculture sector reforms. However,
the Directors expressed concern regarding the weaker-than-programmed fiscal
situation, which caused targets under the IMF program to be missed and which
contributed to a deterioration of the external current account, continuing
problems with arrears and rising external indebtedness.
IMF
Executive Directors stressed that high priority should be given to a tightening
of the fiscal stance, including through a fundamental restructuring of public
expenditures and stronger tax administration.
While welcoming progress made in some areas of structural reforms, the
Directors urged the Moldovan authorities to implement reforms decisively and to
work to improve the climate for foreign investment in the Republic. IMF Executive Directors expressed hope that the new Moldovan
government would adopt a strong reform program, which could attract an early
resumption of IMF support under the Extended Fund Facility.
Mark
A. Horton
IMF Resident Representative
Chisinau, Moldova
|
