Moldova & IMF IMF Activities Publications Press Releases

Visit by Mr. John Odling-Smee, Director of the IMF’s European II Department  

Mr. John Odling-Smee, the Director of the European II Department of the International Monetary Fund, will visit Chisinau during May 7-9, 1998 to hold discussions with the Moldovan authorities.  Mr. Odling-Smee, a national of the United Kingdom, is a leading expert and international official on economies in transition and economic and financial developments in the Baltic states, Russia and the other countries of the former Soviet Union, having headed the European II Department from the time of its creation by the IMF in 1991, in order to direct relations with the new member countries of the former USSR.  The European II Department is one of six IMF “area departments,” which are responsible for on-going relations with IMF member countries, including negotiation and monitoring of IMF credit arrangements; other area departments are the Western Hemisphere, Asia and Pacific, European I, African and Middle Eastern Departments.  

         During his visit, Mr. Odling-Smee is expected to meet with President Petru Lucinschi, Parliament Speaker Dumitru Diacov and other parliamentary leaders, NBM Governor Leonid Talmaci, members of the former Moldovan government, prospective members of the future government and representatives of the business and diplomatic communities.     

Relations between the Republic of Moldova and the IMF continue to be guided by the three-year, SDR 135 million (approximately US$190 million) Extended Fund Facility arrangement approved by the IMF’s Executive Board in May 1996.  Three tranches worth SDR 37.5 million have been disbursed to the NBM under the EFF arrangement, the most recent in mid-July 1997.  The current level of IMF support to the Republic is approximately US$240 million. 


Mr. Odling-Smee’s visit comes shortly after an IMF Executive Board meeting on April 20, 1998, during which economic policies and developments in Moldova during 1997 and the first quarter of 1998 were discussed (Article IV Consultations).  IMF Executive Directors commended the Moldovan authorities for continued progress during 1997 in several areas, despite a difficult political background.  The directors welcomed, in particular, the further reduction in inflation, the first annual increase of GDP since independence, and progress in energy and agriculture sector reforms.  However, the Directors expressed concern regarding the weaker-than-programmed fiscal situation, which caused targets under the IMF program to be missed and which contributed to a deterioration of the external current account, continuing problems with arrears and rising external indebtedness.     

IMF Executive Directors stressed that high priority should be given to a tightening of the fiscal stance, including through a fundamental restructuring of public expenditures and stronger tax administration.  While welcoming progress made in some areas of structural reforms, the Directors urged the Moldovan authorities to implement reforms decisively and to work to improve the climate for foreign investment in the Republic.  IMF Executive Directors expressed hope that the new Moldovan government would adopt a strong reform program, which could attract an early resumption of IMF support under the Extended Fund Facility.


            Mark A. Horton
            IMF Resident Representative
            Chisinau, Moldova