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Reflections: investments vs. justice
Iurie Gotisan, July 31, 2009
The specialised media and others have often debated in the latest period the topic of potential credits expected from the Russian Federation and China. However, little was said and published about conditions to be respected for these credits and about the fact if the granting formalities will be strictly applied and adjusted to international financial standards. Authorities assured that the funds will be spent to repair some roads, renovate water supply systems etc.
It is well-known that lots of strategies and programmes have been worked out in the last years. Pilot projects have been implemented in various areas, inclusively related to infrastructure. As regards roads, there is a strategy on infrastructure of ground transport, which indicates the roads requiring renovation or modernisation, or calculates estimated costs of these works, and feasibility researches have been carried out for certain routes. The same was done in the area of water supply and sewerage systems, particularly in rural areas. Certainly, investments in infrastructure are a key task of authorities to improve living standards of people and adjust them to European standards. Cooperation strategies of international organisations (IMF, WB etc.) with our country focus on this purpose. This necessity has always existed, but authorities lacked willingness and funds. It seems simple at a first glance – funds are provided, the problem is known, but the reality is different.
Anyway, let’s say that the money will be finally released. What should a responsible government do to direct this money to destination? Firstly, they should want to do so. There is a much or less sufficient legal framework (concepts, strategies, programmes, projects). We are also experienced in implementing them. People know concrete examples including positive and less positive. Infrastructure and social investment projects would be probably spread the most. As for citizens, they support these processes and often contribute with funds to their development. But on the other hand, they chronically deplore the lack of transparency of implementation procedures.
As already said, the legal framework of these projects is generally appropriate, but public procurements are the "hampering stone" so far. Experts say that though the international partners of Moldova insisted more than once on improvement and enforcement of the law on public procurements, this sector lacks or is short of transparency the most. Most of problems have origins here. When a project is launched, the entrepreneur may fuel prices, use bad or insufficient materials, and violate standards and technologies and therefore, both people and state suffer. A well-known example would be the one related to the Orhei-Balti route. Like in this case, entrepreneurs presenting very advantageous offers in terms of finances but impossible from the very beginning are advantaged as a rule. This way, the funds are wasted while facilities put into operation do not meet the necessary quality standards or are not finished in general.
Apparently, authorities would try to settle this situation but as a quote says "the stick has two ends." If the rule of awarding victory to most financially advantageous offers did not exist, entrepreneurs protected by high-ranking state dignitaries would offer exaggerated prices but would win the contests under the pretext of a high quality. This would even exclude the competition and would obstruct many projects because of high costs. Perhaps, the best solution would be to punish entrepreneurs, inclusively by sanctioning them or even filing criminal charges against them. But doing so is likely impossible in the current conditions.
An obstacle would be the ambiguous formulation of legal regulations on conflict of interests or the local media revealed many cases when certain dignitaries were interested directly or indirectly to advantage certain companies in public acquisitions. Therefore, the low functionality of the judicial system which is incapable to punish high-ranking functionaries is also a problem, or in a European state the dignitaries concerned would be dismissed and investigated under criminal charges. They could be promoted or even awarded a higher ranking in our country.
In fact, Moldova does not experience a deficit of laws or a legislative inflation, but a deficit of right interpretation of these laws in the judicial system, which is often introduced as corrupt or bureaucratic, as well as a chronic deficit of execution of judicial decisions. For example, reports by the World Bank reveal that nearly 70 percent of interviewed Moldovan enterprises describe the judicial system as "unjust, expensive, corrupt and incapable to impose the rule of law." Elsewhere, many investors fear that the justice in Moldova is unsafe for them, as law courts protect just state institutions and the state.
One may work out many laws, but the country would have less investment than the economic system is capable to absorb, should domestic and foreign businesspersons fear that Moldovan judges do not make justice and sell it to those who pay the most.