● MONDAY, March 4
Fund for guaranteeing loans raised by farmers to be created in 2020
In order to facilitate access to financing for agricultural producers, the authorities intend to constitute a guarantee fund. In a response to an inquiry made IPN News Agency, the Ministry of Agriculture, Regional Development and Environment said a specialized agricultural fund will be created in a move to offer more opportunities for modernizing agriculture. They are currently working on the normative framework and will later identify the financial resources needed for the creation of this fund in concert with the Ministry of Finance. The fund is to become functional in 2020.
Results reported by banks show stable situation in sector, “Expert Grup”
The financial results reported by banks show a stable situation in the sector. The main financial and prudential indicators are within limits or even exceed the limits set by the central bank. Liquidity remains much over the regulated limits and in the medium term reach about 54%, which is over half of the bank assets continue to be represented by low risk liquid asserts (state securities, NBM certificates or mandatory reserves), shows the bank performance rankings for this January compiled by the Independent Think Tank “Expert-Grup”. According to “Expert Grup”, the quality indicators of assets continue to improve. The nonperforming loans represented about 12.15%, with oscillations on the 4.4-31% segment depending on the bank. At individual level, all the banks reported profit for January. Collectively, the profit came to 215.5 million lei.
● TUESDAY, March 5
Transport and Road Workers Union seeks higher fares, market liberalization
The Transport and Road Workers Union intends to formally ask the Government to amend the Transport Code so as to allow passenger transport operators the freedom to fix their own fares on suburban and interurban routes. Union president Vladimir Florea told IPN the request for higher fares formulated last year continues to be valid today amid rising costs and a tendency for passenger numbers to drop. The failure to adjust fares adequately and promptly results in losses for operators, making it impossible to invest in increased comfort and security. To improve the situation, Florea says the market needs to be liberalized. Last time tariffs on interurban routes were increased in 2012, by 0.1 leu/km to an average 0.48 leu/km.
Policy document in horticulture proposed for public debates
A strategic program in horticulture is essential for Moldova given that 2018 was a difficult year and revealed a number of challenges in the second. The draft program for the development of horticulture in Moldova for 2019-2025, which is the first policy document in the field worked out during the last few years, provides that the competiveness of horticultural products during the next seven years will be increased, investments and inventions in the sector will be accelerated, a competitive labor force typical of the sector will be formed and a competitive business environment will be created. Secretary of state at the Ministry of Agriculture, Regional Development and Environment Vasile Luca, in the first public debates on the draft program, said the horticultural production in 2018 was about 730,000 tonnes and this strategic program in horticulture will form the basis of the horticulture subsidization programs for the next few years. The horticultural sector is very important for Moldova’s economy. It yields food products for domestic consumption and for export. After the program is consulted with all the interested factors, it will be submitted to the Government for approval.
Electric vehicles can be charged at shopping center in Chisinau
An electric vehicle charging station installed in the parking space of Metro No. 1 store in Poșta Veche quarter of Chisinau enables the owners of plug-in hybrid or electric vehicles to freely charge their cars while they do the shopping. The station was set up under a partnership initiated by UNDP Moldova and the Chisinau City Hall and forms part of the Sustainable Green Cities Project. The charging station was made in France. A vehicle is 80% charged during at most an hour. The equipment is compatible with all types of electric vehicles and allows to simultaneously charge two vehicles. In Moldova, there are now 99 electric vehicles and 11 charging stations. In many countries, the electric vehicles represent over 1% of all the vehicles. For Moldova, 1% means 10,000 electric vehicles. The five-year Sustainable Green Cities Project, for 2018-2022, has a budget of US$ 2.72 million.
● WEDNESDAY, March 6
Future Government will have to cope with larger budget deficit, experts
In the post-electoral period, the future Government will have to cope with the rise in the budget deficit in parallel with the slowdown in economic growth, said experts of the Independent Think Tank “Expert-Grup”. The experts forecast a deceleration of the economic growth to 3.5% in 2019, amid the worsening of the economic situation in the region and a slowdown in investment activity. According to them, the budget deficit could reach 3% of the GDP and this would affect the volume of bank loans, further depriving the real sector of bank lending resources. In a new edition of “Economic Reality”, the experts said 2019 will be marked by two contradictory phenomena – the fever of electoral initiatives and policies that will most probably be followed by particular unpleasant adjustments in the post-electoral period. “The intensification of populist and electoral policies before the elections is not something new for the Republic of Moldova or other states. However, the élan of promises and policies with an evidently negative budgetary impact launched before the parliamentary elections by the government in Chisinau surely generate concerns, especially about the rise in the budget deficit and the loans raised by the Government from banks.”
● THURSDAY, March 7
Moldovans continue to prefer cash transactions even as card incomes rise
Even though Moldovans get 43% of their incomes on bank cards, they still overwhelmingly prefer cash transactions, which account for 94% of the total value of purchases, finds economist Veaceslav Ioniță of the think-tank IDIS Viitorul. Most incomes on cards (total 51.9 billion lei) are salaries, pensions and social benefit payments, meaning the authorities have done a good job shifting to non-cash payments. Most incomes in cash (68.1 billion lei) come from foreign currency conversions, sales of agricultural goods and other individual entrepreneur activities, and to a lesser extent from salaries. While incomes on bank cards have increased significantly compared with 10 or 15 years ago, Ioniță notes that cards haven’t become popular yet and ATMs rather replaced cashiers as points of dispensing money. In 2018, as much as 86,5% of the money received on cards was withdrawn from ATMs for subsequent cash transactions. Only 6.2%, or 7 billion lei worth of goods and services were paid for with cards.
1.9 million hectoliters of wine produced in 2018
In 2018 Moldova saw one of its best grape harvest in the past decade, making it the 19th world leading wine producer, with 1.9 million hectoliters of wine. The information was presented by the National Wine and Vine Office at the sector’s Second National Annual Conference. In 2018, 1.77 million liters of wine were sold on the domestic market for a total of 159 million lei. Wines from protected geographical indications accounted for 13% of volume and 26% of value on the domestic market. Wine has a share of 12% of all the alcoholic beverages consumed in Moldova.
New safety rules for extractive industry employers
Employers will be required to take additional organizational measures to prevent risks during both surface and underground mining activity, as the Government approved a set of health and safety requirements. According to the document, employers must design, equip and maintain the workplace in a manner that allows carrying out of daily activities without endangering their own health as well as that of their employees. Activities carrying major risks must only be entrusted to skilled and trained persons, who will carry them out strictly according to pre-established instructions. Another requirement is the mandatory maintenance by the employer of special means of evacuation and rescue in case of danger. Workplaces will be equipped with alarm systems that would allow the immediate launch of rescue operations.
Government negotiating economic cooperation with Iraq
The Government has approved the formal start of negotiations with the Government of the Republic of Iraq on an economic cooperation agreement. The agreement is proposed for a period of five years, with the possibility of extension for similar periods if the signatory parties do not express any intention of revoking it. The Ministry of Economy and Infrastructure has been appointed in charge of negotiations. The signing of the agreement is in line with the idea of expanding the country's foreign economic relations. For example, a Moldovan poultry factory currently exports eggs to Iraq. But the list of products can be extended.
Energy crisis guidelines adopted
The Government today adopted guidelines and an action plan to deal with potential energy crises. Moldova has been historically dependent on the electricity produced by the Cuciurgan Power Station located in the Transnistrian region, which is a vulnerability for the energy sector, says the Ministry of Economy and Infrastructure. However no major power supply disruptions occured in recent years. The guidelines and the action plan aim to create a legal framework so as to ensure energy security at all times. To this end, the Government will cooperate with the neighboring countries in order to coordinate supply in emergency situations and develop grid interconnections to improve capacities. In the last two years, Moldova received over 80% of total power supplies from Cuciurgan, 19% from facilities on the right side of the Nistru, and 0.4% or less from Ukraine.
