The permanent representative of the International Monetary Fund (IMF) to
Moldova Edgardo Ruggiero expressed Wednesday at the press conference his
optimistic opinion that the visit of the IMF evaluating mission that will be
in Chisinau on June 5-18 will successfully be completed. That will mean that
the government and the IMF will come to a common opinion in the negotiations
on every issue, on which the agreement was not reached yet. The IMF
recommendations for Moldova were the same: to adopt the law on the
pre-shipment inspection in the version proposed by the IMF; to withdraw
restrictions on some categories of commodities and to alter the Law on the
Should the mission give a positive estimation of the latest successes of
the republic, Moldova will receive its next tranch within the framework of
the Economic Development and Poverty Reduction Strategy. (The overall budget
of the strategy is estimated at $142 million, divided into 12 tranches,
about $12.3 million – each. Moldova has already obtained three tranches from
the IMF). It is still unclear how realizable it is. The only thing is clear
till now (since October of the previous year) no well-defined agreements
were registered between the parties.
The working-out of the new draft law on the pre-shipment inspection by
the government, that according to Edgardo Ruggiero is in line with both
interests of the government and the IMF can be considered the only success.
Edgardo Ruggiero maintained that he already saw the new version of the law –
"initial requirements by the IMF and clauses that worried the government are
considered in it". Despite the fact that, according to the IMF
representative, the issue on inspection was exaggerated, still the decision
on financing cannot be made without it.
The pre-shipment inspection is the only IMF recommendation met by
Moldova, if not taking into account the statements by Edgardo Ruggiero on
the fact that "budget receipts have increased, what means that everything is
in order whether on the customs, or at the tax inspectorate" or "the
National Bank of Moldova led by Talmaci is the good example of the country's
national bank, while the Moldovan Ministry of Finance is a good example of
the control over expenditures". However, as we know "good guy is not
profession, while such abstract conclusions cannot be filed to the case".
The authorities fulfilled some concrete recommendations quite on the
The government was suggested to alter the Law on the 2003 budget to put
it in line with variables agreed with the IMF. The Cabinet promised to the
previous mission (March 2003) to perform the alterations. However, in fact,
it worked out the Law on veterans that, by the way, is not financially
grounded. The Cabinet also took the decision to reduce the tariffs on the
telephone installation and rental fee for some categories of the socially
vulnerable layers of society, without having agreed with the National
Telecommunication and Informantics Regulation Agency and contrary to the
Tariff Rebalancing Plan.The pension amount was increased, what goes in the
conrary to the agreement with the WB and IMF on the establishment of the
stable pension fund, the scale of the pension depending on the individual
deduction of each pensioner and pension indication.
In the current situation, Edgardo Ruggiero beleives, it will be expedient
"to recalculate the budget of the state social insurance for some years in
advance, as the decisions taken today may have their impact for some other
years in future".
The government was suggested to withdraw exporting restrictions. It was
made pro forma, however Edgardo Ruggiero does not rule out that restrictions
withdrawn on paper still exist in fact.
The government "was advised" to follow the policy of stimulating foreign
and national investments. However, the case with the group of Union Fenosa
in Moldova shows us the contrary things. According to the IMF
representative, the second example that goes in the contrary to the
liability is the project of amendments to the Law on the entrepreneur's
patent, that envisaged the prohibition of the retailed trade in the street
on the basis of the entrepreneur's patent and new reporting rules. "It won't
solve the problems, however it will aggravate the situation of the
representatives of the small business", thus Edgardo Ruggiero commented on
the project. In this context, he also touched upon the issue on the
certification of origin, in particular, the problem when the certificates
are issued on the production exported to Europe that was supposedly produced
in Moldova, while in fact it was imported to our country from other
countries. He referred sugar and unprocessed leather to such categories.
The government was advised last year not to hurry to introduce the
Compulsory Medical Insurance (CMI), but it ambitiously insisted on the
concrete dates of its introduction, and has already delayed them twice.
First, it occurred on the president's initiative (the CMI introduction was
postponed from January 1, 2003 till July 1, 2003). Commenting on the current
decision of the government concerning the postponement of the CMI
introduction till January 1, 2004, Edgardo Ruggiero noted that first the
government should have approved a concrete budget of expenditures, required
for introduction of the CMI.
On the whole, since the end of April till the middle of May, the
government took a number of decisions that led to an increase in the budget
expenditures, Edgardo Ruggiero believes. He maintains that for example
return to the territorial-administrative division into regions will cause
large expenditures: "the new region will at least require telephone, the
repair of the building, new seals and a car for the Mayor". In fact, these
are real expenditures. In the IMF opinion, the expenditures will be rather
high, while the preliminary budget of expenditures presented by the
government is ungrounded.
It does not envisage a fixed number of state units in the new local
administration. If the government was calculating till now the saved funds
due to elimination of judets, now it will have to seriously calculate
expenditures on maintaining and support of new regions.
Edgardo Ruggiero unambiguously said this, and, in his words, "the IMF
already carries out interesting debates on the issue with the government".
In fact, Marta Castello-Branco once commented on the reform: "Is the reform
a priority for Moldova in its process of the poverty reduction?". Edgardo
Ruggiero had a more concrete opinion on the issue: "Decentralization on
places means when services become closer to the population, however, I
think, ten judets are rather enough for such a small country as Moldova.
Still, it is the government's responsibility to decide, not ours".
Edgardo Ruggiero expressed his delight by the fact that the government so
easily takes the decision that can negatively affect the budget in the
medium-term period. In that case, in his opinion, Moldova will demand
foreign financing. While the relevant decision depends on the conclusions
made by IMF mission, on what, in its turn, depend financing decisions to be
made by other international financial organizations.
In other words, according to the pessimistic prognosis, the government
will fail to reach an agreement with the mission, and Moldova will have no
money this year. According to optimistic prognosis, money will be received
by the republic, but not earlier than in July of the current year. In any
case – Edgardo Ruggiero believes – the visit of the mission is a chance of
success, but it does not guarantee the success, though the fact of the
arrival of the mission in Chisinau is "an optimistic signal".