The Government will make the largest investments in Moldova next year. The internal private investment depends too much on the banking system and does not have growth sources, while the foreign investors need time to gain confidence as regards the safety of investment in Moldova, considers project manager at the German Economic Team Moldova Jorg Radeke.
The expert has told IPN that the situation regarding private investment in Moldova is not very good because there are sources only from the banking system, but this is not in the best state. Jorg Radeke reminded about the theft committed in the banking system and about the fact that two thirds of the banks are under special supervision. These banks do not expand lending activities. On the contrary, they reduce them. They choose to close the loans when these were repaid without offering the clients the possibility of extending them if they needed.
As regards foreign investment, the situation can improve next year, especially because Moldova has a new program with the IMF and this is a very good signal for potential investors. The condition is to ensure macro-economic stability and show wish to clean up the banking sector. The political situation in Moldova has improved and this will contribute to a higher level of foreign investment during the next few years.
Jorg Radeke noted that the Government already took a number of actions to bring things in the banking system in order and these actions were requested by the IMF. There were 16 preconditions that were to be met before signing of a new agreement with the IMF and most of these concerned the banking sector. One of the main requests of the IMF was to ensure bank shareholder transparency. The National Bank of Moldova must know who the owner of a bank is so that frauds are not committed in the system, as during the previous years. Earlier, the bank owners released loans to themselves without intending to pay these back. Now that the owners are known, such actions will no longer be possible.
Another important request, according to the German expert, was to increase the independence level of the regulatory body – the National Bank of Moldova. Jorg Radeke said that pressure was earlier exerted on the administration of the central bank, especially through the legal system, and in such conditions it wasn’t possible for the regulator to act correctly. Earlier, any decision of the National Bank of Moldova could be annulled by a court of regional level, for example, and this wasn’t good, according to the expert.
