PRACTICALLY NONE OF THE PRIOR ACTIONS AGREED WITH THE IMF
WERE MET IN FULL
The International Monetary Fund mission arrives Chisinau today with the scope
of negotiating with Moldovan authorities measures that need to be implemented
prior to resuming external financing of the Republic of Moldova. The mission
will end on June 18.
Practically none of the prior actions agreed with the Fund were met in full
by the Moldovan Government, this is the conclusion that we could see from the
statements made today at a press conference by Edgardo Ruggiero, the resident
representative of the IMF in Moldova. “One can not be sure that in the final
analysis there will not intervene other changes”, said IMF resident
According to Ruggiero, the current mission will review reduction of state and
social budgets deficit as well as their balancing. A satisfactory version of the
draft law on Pre-Shipment Inspection has been circulated to the Parliament but
it still needs to be approved. Restrictions concerning certain types of products
were so far eliminated on paper only.
Edgardo Ruggiero has mentioned that there appeared a number of new problems
in IMF’s relations with the Government that approved a series of decisions
implying additional expenditures. The most serious concerns are in connection
with decisions on increasing pensions and benefits to veterans. This comes in
contradiction to prior agreements made with the World Bank and IMF and
endangering medium term stability of the budget.
Yet another problem, which was metaphorically named by Ruggiero “calcatul
pe grebla” [stepping on rake] lies with changes and amendments suggested to
the Law of entrepreneur patent envisaging much austere conditions for the
activities displayed by the businesses. According to Ruggiero, this Law will
lead to further expansion of shadow economy. At the same time, the system of
identifying origin of goods is rather inefficient and favors illegal practice of
exporting to Western Europe products declared as being of Moldovan origin
although practically imported into Moldova from its neighboring countries.
Edgardo Ruggiero has stated that if IMF will not resume external financing to
the Republic of Moldova, the Government will loose important amounts agreed upon
with other donors and included into the Law of Budget. From the financial
standpoint, taking into account long lasting stagnation of such an important
source of budget revenue as privatization, the Republic of Moldova will not be
able to make it through the year, says IMF resident representative in Moldova.
Likewise, IMF mission will discuss with the Moldovan authorities the cost of
new administrative-territorial arrangement. Chisinau authorities believe that
new arrangement will help to make considerable savings, while IMF’s own
estimates show that territorial reform implies considerable extra costs. “All is
quite simple, it will be necessary to install new phone lines, to buy new cars
for a large number of new mayors, to make new seals, to repair and equip mayors’
offices, etc. Decentralization makes sense only if it really brings services
closer to population. Under Judets arrangement in a small country like Moldova
these were sufficiently close. Council of Europe has discussed at large the
issue of judets as compared to districts, so I will abstain from repeating it
once again”, concluded Edgardo Ruggiero, IMF’s resident representative in the
Republic of Moldova.