Series:MISCELLANEA - Expert Group, Chişinau

Interconnecting Moldova's gas market:the Iaşi-Ungheni case

Interconnecting Moldova's gas market:the Iaşi-Ungheni case

Author(s): Ana Otilia Nuțu,Denis Cenușă / Language(s): English

Keywords: Iasi-Ungheni pipeline; energy supply of Moldowa;

The extension of the Iasi-Ungheni pipeline is a major objective for the Moldovan energy sector. Interconnecting Moldova with the gas market in Romania and Europe is the first step to diversify energy sources and routes, which would reduce the monopoly of Moldovagaz and consolidate the country's energy security. Currently, the Iasi-Ungheni interconnector is still much underutilized and can be fully used only by extending the pipeline to Chisinau, where there is the gas demand, and by increasing the transport capacity on the Romanian side.

Inflation in the Republic of Moldova: causes, vulnerable groups and policy recommendations

Inflația în Republica Moldova: cauze, grupurile vulnerabile și recomandări de politici

Author(s): Alexandru Fală / Language(s): Romanian

Keywords: inflation in Moldowa; increasing prices; Covid19; Russian war against Ukraine;

After in 2015, against the background of the banking crisis and the economic decline, the annual inflation approached the level of 10%, the Republic of Moldova entered a phase of moderate price increases. However, the year 2021 marked the end of this period. The rapid global economic recovery in the context of the promotion of stimulatory economic policies and the relaxation of anti-Covid measures in several states, the emergence of problems related to the operation of logistics chains, as well as severe climatic conditions have generated an explosion in the prices of energy, food products and building materials. As a result, the global economy was hit by a strong inflationary wave. The start of the war by Russia against Ukraine led to an additional disruption of international logistics chains and jeopardized the distribution of agri-food goods globally, which further intensified the trend of global price increases started in 2021. Republic of Moldova , likewise, was affected by international economic developments and collided with a rapid rise in prices. In new:2021 annual inflation exceeded the level of 10%, and already in apr:2022 the increase in prices reached 27.1% f-o-p. Moreover, for the year 2022 the NBM forecasts a high level of average annual inflation that will constitute 27.3%. In this context, the present study aimed to analyze in more detail the inflationary developments of the last period, identify the impact of price increases on poverty and formulate some policy recommendations aimed at mitigating the impact of these shocks.

Five Myths about External Debt

5 mituri despre datoria externă

Author(s): Marina Soloviova / Language(s): Romanian

Keywords: Foreign Debt of Moldowa;

As part of the "Support Platform for the Republic of Moldova", at the first donors' conference held in April 2022 in Berlin, important financial support was announced in the form of loans and grants from various governments, European and international financial institutions, for mitigating the negative economic and social impact that Moldova suffered as a result of the regional security crisis. This July, the second edition of the conference took place in Bucharest, where the emphasis was placed on the consolidation of energy independence and assistance for reforms. In this context, messages of concern appeared in the public space, both sincere and manipulative, regarding the country's ability to assume new foreign debts. This article examines whether such fears are justified and disproves the main unfounded perceptions that exist on this subject. We also propose a series of recommendations for the Government and creditors aimed at ensuring judicious contracting and management of external loans.

Republic of Moldova needs substantial financial support to address rising poverty risks. Public appeal to the international community ahead of the donors’ conference in Bucharest

Republic of Moldova needs substantial financial support to address rising poverty risks. Public appeal to the international community ahead of the donors’ conference in Bucharest

Author(s): Adrian Lupuşor / Language(s): English

The Republic of Moldova is facing a perfect storm composed of rising energy and food prices, high inflationary expectations ahead of the winter season when gas prices reach maximum highs, war at the border that skyrocketed logistic costs, disrupted value-chains and induced huge uncertainty among firms, households and the government, along with draught and stagnation or even recession for this year. On the background of this difficult environment, the country received a clear European perspective in the form of EU candidate status as a sign of support and credit of trust from the European Union for a series of important reform commitments of the government that are yet to be delivered in such areas as justice, fight against corruption, public administration, state-owned enterprises, and macro-financial stability.Moldova also received important financial assistance from the IMF, EU, and other development partners and, as a result, the massive deficit of about 1 billion EUR planned for 2022 will be financed exclusively from external financial support.

Using behavioral science to encourage people to take the vaccine against Covid-19

Using behavioral science to encourage people to take the vaccine against Covid-19

Author(s): Rustam Romaniuc / Language(s): English

Keywords: Covid 19; vaccination;

As effective vaccines may soon be approved by the US and European Union’s health authorities, it is important to stress that these can be a powerful weapon against Covid-19 only if people take them. There has always been reluctance around vaccine uptake. However, recent surveys show that the skepticism has been on the rise in the last few months and is sufficiently high to render community immunity a challenging goal. Differences in acceptance rates range from almost 90% (China) to less than 55% (Russia, France). With missing data from Moldova, one can only speculate about the acceptance rates. However, it is reasonable to expect that the acceptance rates would not differ much compared to Russia, which is one of the countries with the most pronounced skepticism toward vaccination.

Energy Poverty in Moldova: Social Assistance versus Technical Capacitation

Energy Poverty in Moldova: Social Assistance versus Technical Capacitation

Author(s): Denis Cenușă / Language(s): English

Keywords: Energy supply of Moldowa;

The starting point in examining the energy poverty represents the incursion into the national legal framework that governs energy sector. Next, a set of indirect statistics features the manifestation of the energy poverty. Subsequently, the particularities of the tariff policy are brought attention. The description of the existing policies targeting socially related deficiencies to cope with energy prices follows. In conclusion, the paper tailors specific policy recommendation to address the issue in a comprehensive, systemic and sustainable manner.

Visit of the President of the Republic of Moldova Igor Dodon to Brussels: reflecting on economic suicide

Визит Президента Республики Молдова Игоря Додона в Брюссель: размышляя об экономическом самоубийстве

Author(s): Michael Emerson,Denis Cenusa / Language(s): Russian

Keywords: Moldowa and EU; Moldowa and Russia; Igor Dodon;

Next Tuesday, February 7 2017, the President of the Republic of Moldova, Igor Dodon, is expected in Brussels on his first visit to the European Union since his election in November 2016. Dodon pursues an openly “pro-Russian” policy directed against the Association Agreement with the EU, which has been in force since July 2016. The agreement contains the Agreement on the Deep and Comprehensive Free Trade Area, which opens full access to the EU market for almost all Moldovan goods, and at the same time time, Moldova is given 10 years to abolish tariffs on imports from the EU.

Adaptation of the 2030 Sustainable Development Agenda to the Context of the Republic of Moldova

Adaptarea Agendei 2030 de Dezvoltarea durabilă la Contextul Republicii Moldova

Author(s): Author Not Specified / Language(s): Romanian

Keywords: development of Republic of Moldowa;

In general, the national policy agenda is only partially aligned with the Sustainable Development Goals (SDGs), and one third of the SDG targets are not reflected in any way in national policy documents. In total, 169 targets were analyzed, but special emphasis was placed on 126 numerical targets of the Sustainable Development Goals1. Thus, as a result of mapping the national policy agenda and comparing it with the SDGs, we find that only 11% of the SDG targets are aligned with the national policy documents and therefore do not require adjustments to be taken up. At the same time, most of the SDG targets (57%) are only partially aligned with the policy documents of the Republic of Moldova – only some components of these targets are found and therefore the relevant national strategies need to be adjusted to better reflect the spirit and details of the SDG targets. About a third of the SDG targets are not reflected in any way in national policy documents.

COVID-19 in Moldova: What was the effect of the 2020 lockdown and what effect would a similar lockdown have in 2021?

COVID-19 in Moldova: What was the effect of the 2020 lockdown and what effect would a similar lockdown have in 2021?

Author(s): Adrian Lupuşor / Language(s): English

Keywords: Covid 19;

The recent rise in the number of COVID-19 infections, which was most likely caused by new virus strains, stirred heated public debates about the need to enforce tougher restrictions in order to prevent the virus from spreading. In this context, as a result of the recent meeting of the Supreme Security Council, President Sandu suggested to impose a 2-week state of emergency and for the Government to develop the list of restrictions regarding social and economic activities, which would be then submitted to the Parliament for consideration and approval. The idea of establishing these restrictions (or a lockdown) is controversial per se, as its impact will be felt by everyone, implying costs for some and benefits for others. On the one hand it could lead to economic and social costs, with particular damage to small enterprises and employees with lower salaries, especially if we take into account the population’s low income and the economy that is barely recovering from the most severe recession in the last 20 years, while on the other hand a lockdown could relieve some of the pressure on the health system, prevent infection spreading and allow saving people’s lives. Nevertheless, the heated arguments about this issue miss a cold review of the effects caused by the lockdown of 17 March - 16 May 2020, which could be used as a yardstick for understanding the effects of a potential lockdown in 2021. This analysis estimates those effects on the level of infection cases and deaths caused by COVID-19, as well as on the major economic indicators, by means of precise econometrics and statistical techniques.

The COVID-19 crisis: state-owned companies between uncertainty and opportunities

Criza COVID-19: companiile de stat între incertitudine și oportunități

Author(s): Dumitru Pintea,Vadim Gumene / Language(s): Romanian

Keywords: Covid 19;

The study "The COVID-19 crisis: state companies between uncertainty and opportunities" was carried out in the context of unexpected developments in economic activity following the spread of the SARS-CoV-2 virus, known worldwide as the COVID-19 pandemic. To limit the spread of the virus, the vast majority of states have resorted to unprecedented quarantine and social distancing measures, unimaginable until a few months ago, which are affecting the conduct of several types of economic activities. As time passes and there is still no medical solution to the virus, all the conditions for a major economic crisis appear to be present – sharp decline in GDP, bankruptcies and rising unemployment. In response, broad state intervention is seen as the key to economic recovery, even by those who in the past viewed the state as a threat to the free market. The general acceptance is that "ordinary tools are not enough to deal with these extraordinary times" and "state companies are part of the governments' effort to recover the situation both medically and economically".

Supporting small and medium-sized enterprises in the implementation of cashless payments

Sprijinirea întreprinderilor mici și mijlocii în implementarea plăților fără numerar

Author(s): Marina Soloviova / Language(s): Romanian

Keywords: cashless payment; cashless economy;

In the present study, we evaluated, based on statistical data and interviews with representatives of commercial banks and payment systems, the current situation and the development potential of cashless payments in the Republic of Moldova. A desk research was also carried out of the practices of other countries aimed at stimulating cashless payments, especially among small traders. Economic policy proposals were submitted to support small and medium enterprises in the Republic of Moldova in the implementation of cashless payments.

Four paths to Transparency in Eastern Europe and Central Asia

Four paths to Transparency in Eastern Europe and Central Asia

Author(s): Author Not Specified / Language(s): English

Much of the discussion on the region is rightly focused on the ongoing Russian invasion of Ukraine. The outcome of the conflict will hold weighty consequences for the state of democracy not only in the region, but on the global stage. In these uncertain times, it remains more essential than ever for the region’s leaders to commit to building strong and inclusive democracies that welcome the participation of civil society and the public in budget processes. The international community should also continue to support reformers in the region, and citizens that have demonstrated a strong commitment to advance transparency and accountability. Ensuring full and comprehensive budget transparency—and pursuing avenues to engage the public more meaningfully in public spending decisions— will remain a key pillar of strengthening democracy and open government in this region.

The importance of the European vector for the sustainable development of the Republic of Moldova: Report in Figures

Importanța vectorului european pentru dezvoltarea durabilă a Republicii Moldova: relatare în cifre

Author(s): Marina Soloviova / Language(s): English

Keywords: Moldowa's democratic development; Moldowa and EU;

In this article, we report on the importance of the European vector for the sustainable development of the Republic of Moldova through the lens of data on foreign trade, investments and foreign assistance. Currently, the European Union is not only the main commercial partner of the Republic of Moldova, but also the primary source of direct investments in the Moldovan economy. Also, during the year, the European Union offered the Republic of Moldova substantial financial support in the form of preferential loans and grants for the construction or renovation of social objects and infrastructure in the villages and cities of Moldova, but also for mitigating the negative economic and social impact that Moldova suffered as a result of the regional security crisis.

Impact of the global financial crisis on local communities in Moldova

Impact of the global financial crisis on local communities in Moldova

Author(s): Author Not Specified / Language(s): English

Keywords: Global financial Crisis;

This study was commissioned to the Expert-Grup think-tank by the UNDP office in Moldova with the purpose to assess qualitatively, and to the extent possible, quantitatively, the impact of the global financial crisis and associated economic downturn on Moldovan local communities and identify possible responses that local communities can adopt to cope with the crisis. Expert-Grup has used a wide range of tools and techniques to conduct the research. Available statistical data have been analyzed quantitatively but qualitative research was important to get the quantitative analysis more “human development”-orientated.

Poverty of the children of the Moldovan migrants

Poverty of the children of the Moldovan migrants

Author(s): Valeriu Prohniţchi / Language(s): English

Keywords: migration; children of migrants;

This report focuses on the impact of migration on the situation of the Moldovan children left behind by migrating parents. It finds that the total number of these children is large and the official figures underestimate the extent of this phenomenon. According to official information around 28000 children in the academic year 2004/2005 were left by both parents and more than 68000 thousand were left by one parent. These numbers do not correlate with the large annual outflows and large total stock of the Moldovan migrants. The report makes the hypothesis that remittances which alleviate poverty of most of the children are likely to generate more income inequality among the children. While there are indirect and mostly qualitative confirmations of the hypothesis, the issue deserves further research. The education and health outcomes of the children left by migrating parents are not addressed properly in existing literature. Some of the qualitative report asserts that in most of the cases educational outcomes worsen after parents leave. Also, it is not clear if these children are more likely than others to get accustomed with unhealthy patterns of live: smocking, drinking alcohol or taking drugs. Several reports made by school directors and tutors affirm that there is such a trend, but existing statistical data and researches do not confirm nor infirm this affirmation. Also, a report finds that children living without parents are more inclined to commit crimes, but the quality of this report is not clear.

INFORMAL EMPLOYMENT IN REPUBLIC OF MOLDOVA: CAUSES, CONSEQUENCES AND METHODS OF COMBAT

OCUPAREA INFORMALĂ ÎN REPUBLICA MOLDOVA: CAUZE, CONSECINȚE ȘI MODALITĂȚI DE COMBATERE

Author(s): Ana Popa / Language(s): Romanian

Keywords: labour market i Moldowa;

The given study aimed to examine the real causes of informal employment and the impact of informal employment on the state, but also on the people who work in this segment. In this context, special attention has been paid to "undeclared work" and "envelope wages", which are achieved through tax evasion, while other more widespread forms of informal employment (e.g. self-employment or work in own households) are a response to the existing economic structure and legal framework and do not have the primary purpose of tax evasion. However, the imperfect legal framework allows the evasion of paying taxes specifically by practicing some activities as a self-employed person. However, the purpose of this report is to analyze specifically that part of informal employment that involves tax evasion.

The major dysfunctionalities of the Public Policy Promotion Process described on the example of the draft Law for the Modification of the "mode of Road Administration"

Disfuncționalitățile majore ale procesului de promovare a politicilor publice descrise pe exemplul proiectului de lege pentru modificarea „modului de administrare a drumurilor”

Author(s): Vitalie Rapcea / Language(s): Romanian

Keywords: road administration; public patrimony;

On 25.05.2023, the Parliament approved, in the final reading, the project to amend the way of public road administration, and now it is waiting its turn to be promulgated by the presidential institution. The project is in contradiction with the state's vision in the field of road administration, in the field of administration and denationalization of public property and may jeopardize the achievement of the European Moldova 2030 objective. This analysis comes to use the case of legislative project no. 85 of 30.03.2022 to describe the major dysfunctions in the process of promoting public policies, both at Government and Parliament level. The case illustrates how a fundamental policy decision can be promoted in the absence of sufficient argumentation, in the absence of a sectoral vision, in contradiction with other strategic planning documents, in the context of a negative anti-corruption opinion, and despite the numerous risks: image, financial alienation of public patrimony, distortion of the market, etc.

Partnerships with quarrel: Analysis of the Draft Amendment to the PPP Law

Parteneriate cu bucluc: analiza proiectului de modificare a legii PPP

Author(s): Vitalie Rapcea / Language(s): Romanian

Keywords: public-private partnership;

On 27.04.2023, the Parliament of the Republic of Moldova approved, in the first reading, draft law no. 102 of 13.04.2023 for the amendment of some normative acts (the draft law "on public-private partnership and the administration of public property"). The draft law developed by the Government does not eliminate the main problems associated with public private partnerships (PPP), it does not represent an integrative vision of this formidable investment instrument, and some provisions of the legislative initiative are in contradiction with the stated objectives, with the state's ownership strategy, they unbalance the balance of forces in a PPP contract and generate risks of embezzlement of public assets. This analytical note reviews the main problematic provisions with a view to addressing them until the final approval of the draft law by Parliament.

Ways to improve fiscal Fairness and the Resilience of Natural Persons: Proposals formulated by the Expert Group in the context of the approval of the draft law to amend the fiscal and customs policy

Modalități de îmbunătățire a echității fiscale și a rezilienței persoanelor fizice: propuneri formulate de Expert-Grup în contextul avizării proiectului de lege pentru modificarea politicii fiscale și vamale

Author(s): Vitalie Rapcea / Language(s): Romanian

This article examines the draft law for the amendment of some normative acts concerning fiscal and customs policy submitted for public consultation on 22.05.2023. The Expert-Group welcomes the intention of the authors to support "increasing the resilience of natural persons through fiscal instruments" and that of creating a harmonized and fair tax and customs system", one that would allow, among other things, to "combat the phenomenon of the salary in the envelope". In order to more fully achieve the objectives set by the Ministry of Finance through fiscal and customs policy, the Expert-Group came up with the proposals for: unification of quotas on income from investment activities, including the income obtained from securities issued by cities or other forms of administrative- territorial; the establishment of fiscal equity when establishing the road use tax; the establishment of the mechanism to facilitate wage increases and "passing on the white" by establishing a temporary mechanism for reimbursement of the tax costs of the wage increase borne by employers (MASCS), etc. Additionally, the Expert-Group proposed the revision of several Government Decisions for: the annual indexing of the ceiling for the deduction of expenses regarding the organized transport of employees/day workers; expanding the deductibility also on the expenses associated with the adaptation of means of transport/spaces to the needs of employees with reduced mobility; as well as the establishment of differentiated compensations for the transport of people with disabilities; granting for all economic agents that employ people with disabilities the same subsidies related to the expenses related to the payment of the salary as in the case of specialized enterprises (for the deaf, blind, etc.).

Public Alert: Stop the Attacks against Civil Society in the Republic of Moldova

Alertă Publică: Opriți atacurile împotriva Societății Civile din Republica Moldova

Author(s): Author Not Specified / Language(s): Romanian

Civil society, represented by the National Platform of Civil Society from the Eastern Partnership, as well as other organizations, expresses its concern about the unprecedented attacks on non-governmental organizations, development partners and democracy, launched by the deputy Bogdan Șîrdea. On October 21, 2020, the socialist deputy Bogdan Șîrdea launched the toughest, most complex and assumed frontal attack launched by a Moldovan politician against the Constitution of the Republic of Moldova, against the fundamental rights and freedoms of the country's citizens and against the modernization of our state according to the European model. This attack consists in discrediting, on the basis of falsehoods and defamatory accusations, the civil society as a whole, of which the preferred target were the organizations that work mainly in the field of human rights protection, justice reform, the fight against corruption, freedom of the press, of pro-European reforms, of reforms in the social and medical fields.