THURSDAY, FEBRUARY 28, 2002
Moldova's Uphill Financial Balancing Act
week, the Head of the IMF Permanent Mission in Moldova, Mr Hassan Al-Atrash's
3-year tenure has expired The Moldovan leadership's official stance has been
always mixed with respect, indignation and sometimes enmity towards the IMF.
Some of the country's dignitaries would call this financial structure and the
role of the IMF’s representatives in Moldova "imperative evil". Since
October 1999, the financial assistance to the republic was primarily determined
by Hassan Al-Atrash.
never influenced the country's politics directly, although it seems that his
observations about Moldova's political and economic events were that of
regretful incredulity. The following interview with Mr Al-Atrash was conducted
at his office on the ground floor of the House of Parliament while crowds of
people were running riot in the central square. He diplomatically stated that
the latest events in Chisinau will not negatively affect the decision making of
the IMF Mission in Moldova, and affirmed us that the Fund is interested "in
economic issues only."
Mr Al-Atrash, during your mission in Chisinau, the IMF was quite reluctant to
unblock financing to Moldova.
have been working here since October 1999. Over this period of time, Moldova has
received two credits of $15 million in December 2000 and $15 million in February
2001. One of the main reasons to why this happened rarely was the country's
political instability. I came to Moldova in October 1999. Almost immediately,
the IMF went on a visit to Chisinau and worked out an agreement with the
government of Moldova headed by Mr Ion Sturza.
in November, Sturza's government was impeached and in December, the new
government led by Dumitru Braghis was formed. In February 2000, we reached an
agreement with that government, In April, the government voted down the law on
privatization. In the second half of 2000, we commenced negotiations about the
new mechanism of financial policy for this country. In October 2000, the
privatization law was finally ratified and in December, the Fund, as well as the
World Bank, apportioned money. In February 2001, we also allocated finances and
in April, a new government came to power.
we had doubts as to the viability of the government's economic programme.
However, problems were efficiently resolved and by November 2001. It seemed
have jarred into a stable progress. Before we sent documents to our Board of
Directors for approval, the Moldovan leadership signed the bilateral agreement
with Russia on gas supply that stipulated state guarantees. Consequently, the
procedure was halted for an indefinite a period of time.
How would you characterize the relationship between Moldova's leadership and
HA: By and large, we have reached compromises with the
three governments of the country. Because of the government's removal and the
1999 and 2000 delay in the law on privatization, we were unable to call the
Board. However, we could speak of the constructive dialogue with all .three
governments. I am almost sure that the current government will get credits; the
only problem to settle is when. Primarily, the gas supply question is to be
What will be the most optimistic scenario for the Moldovan leadership with the
IMF be in the near future?
In March-April, the Board is meeting after which the decision of money transfer
will be determined I cannot specify now the amount of money to be allotted. We do
not know terms of agreement in advance. Almost immediately, the WB will launch
financing as well. In April, the country will be able to get money.
Simultaneously, the Paris dub is to agree on the debt-restructuring plan
Are you leaving Moldova less optimistic
than when you arrived in 1999?
is only predictable that IMF's representatives leaving the country are less
optimistic than when they first come to the republic. I think the impression is
basically influenced by the results we had attained Moldova is currently in the
process of acquiring the characteristics of the market economy. The
representative who is appointed to head the mission in this country for the
first time is not familiar with every detail. He is also to face resistance on
the part of local bureaucrats, and understand that the power supply sector of
economy is quite an acute problem to address. Later, the country's political and
economic crisis becomes comprehensible; therefore, I am less optimistic. I know
that when leaving Moldova in 1999, my predecessor had same impressions. He came
to the republic in 1996 being quite idealistic. However, by the end of his term
in 3 years, he understood that everything here was much more complicated...
Do you think that Moldova may suffer the Argentinean crisis?
HA I do not think so. At least not in the near
future. Moldova and Argentina are too different to be compared.
The possible postponement of the Annual Meeting of the International Monetary
Fund and the World Bank should in no way impact the resumption of IMF lending to
Moldova. IMF Resident Representative in Chisinau, Hassan Al-Atrash, told to the
He said that the Supplement to the Memorandum, discussed by the recent IMF
mission with the government and the National Bank of Moldova, stipulates for
certain measures, which the Cabinet of Ministers of the republic is to take
prior to the Executive Board meeting. As soon as these are fulfilled, the IMF
will be able to fix the Board date to discuss the resumption of IMF lending.
Hassan Al-Atrash emphasized that the date of the IMF Board meeting to discuss
Moldova was in no way connected with the Annual Meetings which may be postponed
due to events in the USA. It totally depends on how fast Moldova would fulfill
the prior actions stipulated in the Supplement to the Memorandum.
According to the IMF Resident Representative, events in the USA, which took
place on September 11, would not impact IMF financial aid to Moldova and the
timing of the Board meeting on Moldova. As "InfoMarket" has earlier informed,
the Annual Meetings of heads of Ministries of Finance and Central Banks of 183
IMF member states, scheduled for September 29-30 in Washington may be postponed
to a later date owing to terrorist attacks in the USA.
By Anastassya OKUNEVA