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 Monitoring→Economy→The Socioeconomic Environment

Economic Policies on April 12–25, 2004

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Moldova in the world

Foreign economic relations

An official delegation of the Republic of Moldova headed by Minister of Economy Marian Lupu flew to London for the annual reunion of the ERBD Board of Governors on April 18–20. Marian Lupu made a presentation on the country’s economic success throughout 2003. Afterwards he met businessmen — potential investors for Moldova.

As part of the ERBD reunion, Moldovan delegation had a number of important meetings, among others with ERBD President, Jean Lemierre; Director General of the UK International Development Department, Nicola Brewer; representatives of European Commission; as well as official delegations of Romania, Russia, Ukraine, Armenia, Netherlands and Japan.

Republic of Moldova was short listed for larger financial aid from ERBD. The bank is set to increase its investments from 90 m to 150 m Euro per year for the seven most poor former soviet republics, namely Armenia, Azerbaijan, Georgia, Kyrgyzstan, Republic of Moldova, Tajikistan and Uzbekistan, declared ERBD’s President Jean Lemierre.

The initiative provides among others increasing investments in private sector, granting credit lines to local banks, easing trade, and investments into the public services. ERBD is ready to grant credits with no state guarantees. A recent ERBD report predict a 4.9% economic growth this year in Eastern Europe and former USSR. This would be the fifth year of economic growth in the region.

In the 11 since it granted the first loan project in the Republic of Moldova, ERBD’s projects reached a total of 170 m USD. It is the only foreign investor that invested both in governmental and private sector. Moldova accounts for only 0.9% out of the total 29 projects credited by ERBD in transition countries both in Central and Eastern Europe and Central Asia. In Moldova the greatest bulk of investments worth 50 m USD went to financial and banking sector and infrastructure.

ERBD provides project financing for banks, industries and businesses, both new ventures and investments in existing companies. It also works with publicly owned companies to support privatisation, restructuring state-owned firms and improvement of municipal services. It was established in 1991 by 40 European states. It invests only in Central and East European countries with 60% of the funds going to the private sector and 40% to public sector, especially for infrastructure.

Business environment

Privatization

Parliamentary Commission on economy, industry, budget and finances announced discussions on the draft law on modifying the Law on Privatization for this week. According to the draft “state shall not guarantee property rights over units located to the east of Dniester and Bender town that were privatised without a prior consent of Chisinau governmental authorities”.

Several opposition deputies, members of the Commission, stated the initiative is useless since Transdnistria is not subordinated to Chisinau. Nevertheless, Communist deputies endorsed the draft. According to the Commission Chair Nicolae Bondarciuc, the draft law was “a warning” to foreign investors willing to invest in Transdnistrian region. In response to Bondarciuc, another deputy Valeriu Cosarciuc rightly pointed that one of the functions of the Ministry of Foreign Affairs of Moldova was to inform foreign investors on the risk of loosing their properties in Transdnistria, unless it was agreed upon with Chisinau.

March 29 – April 11, 2004 April 26 – May 9, 2004