Issue No. 28 (623) - Saturday, March 27, 2004
IMF continues not to give money to
Resumption of IMF financing to Moldova is
conditioned by the Moldova’s government economic policy. This view was presented
by Marta Castello Branco, chief of the IMF staff mission which was in Chisinau
for one week.
At the concluding press
conference, Marta Castello Branco has made a few unpalatable conclusions for
Moldovan government. According to her, in spite of the growth that started in
2000, the reforms slowed down in Moldova and even reversed in some sectors. IMF
believes that, first of all, this had a negative impact on the level of foreign
direct investments into Moldovan economy, which as it is, is the lowest in
On the other hand, as
underlined by Castello Branco, this has been partly offset by the remittances of
Moldovan workers from abroad. The IMF adheres to the opinion that the economic
growth in Moldova is fueled mainly by these remittances. “These money have
encouraged growth but our main concern is whether this growth is sustainable,”
said Castello Branco.
The IMF experts spoke
positively about the draft Economic Growth and Poverty Reduction Strategy Paper
(EGPRSP) worked on by the Ministry of Economy. One of the main goals of the IMF
staff mission was to review this document. “We have the feeling that we and the
government are converging regarding diagnostics but we still have differences
regarding implementation of the strategy,” said Marta Castello Branco.
IMF believes that Moldovan
government actions are not consistent with the substance of the strategy paper.
This applies to restrictions on exports of goods, primarily grain crops, as well
as government attempts to monopolize some sectors of Moldovan economy. “This is
not good as we want to see more competition in Moldova,” underlined Castello
The International Monetary Fund
is discontented with other actions of Moldovan government as well. This applies
to the intentions to regulate prices on fuel and bread, as well as the
forthcoming introduction of off-shore tax. IMF believes that Moldova needs to
improve its business environment and reduce the government’s involvement in
business activity. “As the level of investments will start to go up, we will be
able to say that the business environment improved. It all depends on the
perception of investors,” said Marta Castello Branco.
The chief of the IMF staff
mission has also indicated that the Fund will continue the dialogue with
Moldova. However, IMF and government representatives still did not agree on what
are the best measures to solve Moldova’s economic problems. “We need to see
implementation not just declaration of intentions. Once we see a change in
direction in government policies, we can quickly resume a dialogue related to
the program of financing support to Moldova,” said Castello Branco.