MARK HORTON: CIUBUC'S RESIGNATION WAS NOT ANYTHING SURPRISING

Interview with Mark Horton, Resident Representative of the
International Monetary Fund in Moldova

Chisinau-06.02.1999/(BASA-press)

Question: Was it or not surprising for you the dismissal of Ion
Ciubuc from his office of prime minister? Or, can we say his
resignation was a successful move?

Answer: It was not too much of surprise. I think this move had been
discussed in some political circles for weeks. Salary and pension
arrears, countryside decline - all these need to find someone who
would be guilty.

The government's work should be improved in a series of essential
moments. I am not quite sure that Ciubuc's resignation would lead
to the improvement that is necessary, and because of this reason I
may say it was not necessarily a good change.

If the future premier works more consistently and more aggressively
in a number of key sectors, this would be a good change. But I am
inclined to think that what shall happen in the next months will
differ from what I want.

Nor can I rule out a stronger accent on populism. It's even
possible that some important aspects of reforms in Moldova will be
reviewed. An this will worsen Moldova's relations with the
international donors and creditors.

Q.: Can you specify any problems the future premier would have to
face?

A.: Looking at all the symptoms, I see a lot of problems; among
them the low tax collection, low growth of exportation, enormous
deficit of the payment balance, the rising external debts.

All this takes our attention towards the basic drawback - the lack
of investments.

I believe if someone looked back three or four years, he would see
lots of lost possibilities, failed investment projects and
unimplemented tenders. I think you see the rising share of barter
transactions, less and less transparent commercial environment -
these are consequences of the above-mentioned causes.

Stressing these symptoms means bypassing the major problem: the
lack of a friendly investment environment. More investments would
have rescued most of the problems.

Unfortunately the Ciubuc cabinet was unable to resolve these
problems decisively. He failed to create a good investment
environment and made no progress about this in the last few years.

Q.: You mean there were enough motives to quit, don't you?

A.: I believe so, but - take care - it's a mistake to focus on
separate problems exclusively, such as pension arrears. Of course
this is a major problem, but it shows the symptoms of deeper
troubles.