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Limba romana
Russian
International Monetary Fund
Mission to Moldova
March 7, 2002
PRESS STATEMENT
Conclusion of IMF Mission to Moldova,
February 26 to March 7, 2002
The mission was lead by Richard Haas of the IMF's European II Department and
included economic and legal experts from several IMF departments. The purpose of
the mission was to review the economic and financial policies of Moldova and to
determine whether these policies are in accordance with the Memorandum on
Economic and Financial Policies (MEFP) signed by the Moldovan authorities in
December 2000. This would be a precondition for the resumption of the IMF's
financial support for Moldova.
The mission noted that monetary and budgetary policies continue to be prudent
and broadly in accordance with the MEFP. Progress was also made on the
inter-governmental agreement with Russia regarding the debt of Moldovagas to
Gazprom; the current draft no longer contains a state guarantee for the debt of
Moldovagas, which would be incompatible with the MEFP.
However, two issues remain outstanding:
(i) The MEFP required that a new market-oriented Civil Code be passed by
Parliament by December 31, 2001. While this deadline has been missed, rapid and
verifiable progress with the adoption of the Civil Code, leading to its full
entry into force by January 1, 2003, will be a precondition for future financial
support for Moldova from the IMF.
(ii) The resumption of financial support to Moldova by the IMF will also
depend on Moldova securing additional financing from the World Bank. The main
obstacle in this respect has recently been insufficient progress on key
structural policies such as agricultural reform and privatization. These
structural reforms are a necessary condition for macroeconomic stability and
sustainable economic growth in the medium run.
Furthermore, the mission was concerned that several measures implemented
earlier under the IMF program may be in danger of being reversed. In particular,
the mission emphasized to the authorities that Pre-Shipment Inspection (PSI)
will only be successful if it is fully supported by the government and by the
customs administration. A meaningful evaluation of Moldova's experience with PSI
can only be undertaken after the inevitable initial implementation problems have
been resolved. The mission therefore urged the authorities to continue to fully
implement PSI.
Similarly, the mission is very concerned that Parliament has recently
approved in first reading an amendment to the Law on Financial Institutions that
would allow the courts to over-rule decisions by the National Bank of Moldova
with respect to the licensing of commercial banks. If this amendment were
enacted, the independence of the National Bank of Moldova and its ability to
effectively supervise commercial banks would be undermined; this would be
incompatible with an IMF program. The mission was encouraged to learn that the
Government vigorously opposes the proposed amendment.
It is expected that an IMF mission will return to Moldova in the near future
with a view to evaluating progress in resolving the outstanding issues and
concluding the first review under the PRGF program. Once this review is approved
by the IMF's Executive Board, this will permit a resumption of the IMF's
financial support for Moldova.
Richard Haas, Mission Chief
Chisinau
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