PROFIT (BANKS & FINANCE)
Issue No. 11,
IMF has inspected Moldova
How they see us,
It seems that since Moldova won its
independence, only the Government “Tarlev – 2” was praised by the International
Monetary Fond (IMF) experts so sincerely. They inspected the way executive power
implemented its program and drew positive conclusions.
It’s well known that in the previous
years, when Moldova had Memorandums with the Fund, IMF missions gave good
appreciations to the monetary policy run by the National Bank and it’s
unchanging Governor, Leonid Talmaci. As for Governments’ activity, which has
the task to promote structural and market reforms, nobody succeeded to deserve
such compliments until now.
The IMF mission led
the first review under the Poverty Reduction and Growth Facility (РRGF). The
mission was headed by Thomas Richardson, Deputy Division Chief, Northeastern
Division (Belarus, Moldova, Norway and Russia) in the IMF’s European Department.
At the Press
Conference hold at the end of the mission’s visit, Prime Minister Vasile Tarlev
couldn’t master his feelings.
He said he was “very
pleased about the cooperation with IMF”. The Head of the Government didn’t hide
his satisfaction on the atmosphere of confidence present during the negotiations
held with the IMF experts.
It deserves to be
noted, that Government’s successes can be judged by the participants at the
Press Conference. Besides the Prime Minister Tarlev, at the conference
participated Mr. Leonid Talmaci, Governor of the NBM and Mr. Mihail Pop,
Minister of Finance.
admitted that mission’s experts together with First Deputy Prime Minister
Zinaida Greceanii, responsible for the macroeconomic problems within the
Government, Governor Talmaci, Finance Minister Pop and Economy and Trade
Minister Dodon, all worked in non-stop regime.
Most of all, the
Prime Minister was pleased about the fact that the IMF experts have the same
views as the Government on the current problems and on the methods to solve
The head of the
mission, Thomas Richardson, confirmed the productivity of the joint work done.
He reminded that according to the three–year program, signed by the IMF and the
Government in May 2006, the Fund will take stock of the performance in
implementation of the program in the Program (РRGF) framework every 6 months.
Referring to the
assessment outcomes, Richardson said that the mission “registered very good
results”. The macroeconomic situation in the country developed with a minor
deviation from the Memorandum signed with the Government in May 2006. The
mission is content with the fact that in spite of the external shocks Moldovan
economy faced, the financial situation in the republic is stable and there are
no premises for it to get worse.
The mission also
expressed it’s satisfaction regarding the main parameters of the budget for
2007, which has already been approved by the Parliament in two readings.
The head of the
mission assumed that till the end of this year, Moldova will receive a
disbursement of $ 47 million instead of $ 17 million as early envisaged.
At the same time, the
mission expressed to the Government its proposals regarding tighter promoting of
structural reforms. Richardson said that Moldova must expect tough periods
ahead, that’s why he recommended “to tighten the belt and to decrease the
The mission believed
that a double increase in gas tariffs will have adverse effects during the
winter months, when the gas consumption reaches its pick. IMF experts consider
that the economy of the republic hasn’t passed through all the negative
consequences of the wine ban yet.
exclude the fact that as per European countries’ experience, where there is a
high competition on the market, the market share of one wine supplier will be
taken by another one. In this case, comeback of the Moldovan wine to the Russian
market may not be as successful and impressive as desired.
Asked whether this
sum of $ 45 million from the IMF lending for Moldova is maximum or minimum
possible, Vasile Tarlev answered that “there is never enough money, because it’s
never too much of it”. I think the decision of increasing the loan by $45
million is very balanced and well-thought.
The mission expressed
it’s satisfaction regarding the amendments to the Law on BNM. . The experts
assumed that at the moment the Bank has a various possibilities of stopping the
increase of the consumption prices, in other words to target and control
The head of the
mission stated that in fact the core inflation in Moldova in 2006 was lower than
the level for nine months of the current year. The experts refer to the
inflation that is imported from abroad due to the increase in prices for energy
resources and natural gas, the price of which went up from $80 tо $160 for one
thousand cubic meters.
that the IMF experts hoped the amount of currency reserves in the NBM at the end
of 2006 would have been bigger.
the money received from IMF, the NBM currency reserves will reach $1 billion.
The optimists are pleased with a such development of the relations Moldova has
with IMF, which encouraged foreign investments in Moldovan economy, granted our
country the second chance. The pessimists, though wonder why the IMF is
“pumping” so many currency reserves in NBM. Because they can only be used “calm
down” the market outbreaks and ensure the necessary level of imports in the
country. These are not investments money, that when properly invested in the
economy could be used for spurring production and expanding the exports, which
are dropping dramatically compared with imports.