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Activity of the Government on December 15, 2003 – January 11, 2004

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Decisions

On December 15, 2003 Government approved the budget of the National Company for Obligatory Medical Insurance for year 2004 worth 1 billion 70 million Lei, amount to be spent for the enforcement of obligatory medical insurance commencing January 1, 2004. 651 million shall be allotted from the state budget, money enough to cover for the medical insurance of 1 million 476 thousand people in need (pensioners, disabled unemployed, children and students), whereas the rest shall be covered by employers and employees, who are due to pay 2% of wage each.

Given the enforcement of a new medical insurance system, Government decided to freeze the debts of the medical institutions for a two-year period, until January 1, 2006. The debts estimated at 36,3 million Lei will be restructured for a five-year period.

On December 24, Government established two commissions entrusted to oversee the liquidation of the State “Teleradio-Moldova” Company. One would inventory and evaluate the Company’s assets within 15 days, the other would devise within 10 days a mechanism of repaying the debts.

At the initiative of Migration Department, Government approved on December 24 a Regulation on the financial assistance to be provided to refugees stationed in the Republic of Moldova. Commencing 2004 refugees would benefit of monthly payments worth 135 Lei for a six-month period at most. To qualify for the payment, refugees have to fill in an application and pledge to reimburse the money received.

Government came up with a proposition to introduce taxes on the import of canned sugar and sugar beat, namely: a 55% tax to be applied between February 16 — December 31, 2004, but no less than 115 Euro per tone; 50% tax in 2005, but no less than 110 per tone; 45% in 2006, but no less than 105 Euro per tone; and 40% in 2007–2008, but no less than 100 Euro per tone.

Moreover, Government approved the Conception of the penal reform and an Action plan for 2004–2013. It also extended by one year the right of Transdnistrian companies to register with the State Registry of enterprises and organisations.

Overview

At the closing session of the autumn-winter session of the Parliament, Prime-Minister reported on the results of the Government activity throughout 2003. Thus, Mr. Tarlev indicated that “in January — September (2003) the GDP rose by 6.2% as compared to last year and its nominal value reached 19.5 billion Lei”, inflation rate reached 14% in the first 11 months of 2003; domestic currency appreciated by 3.8% in nominal terms; whereas industrial output rose by 17% as compared to 2002.

Also the following trends have been registered: a 23% increase in the investment in fixed assets; a 29.1% boost in foreign trade as compared to 2002, namely exports to CIS region raised by 21%, whereas to EU and CEE by 27.8% and 47.7% respectively. Another tendency registered in 2003 were soaring imports, which raised in the first 10 months of the year by 31.5% as compared to the previous year, thereby imports from CIS rose by 46%, whereas from EU (which account for 27.6% of the total imports to Moldova) and CEE by 39.9% and 20.9% respectively.

Other successes scored by the Government include, according to the Prime-Minister, revenues to the state budget worth 5 billion 817.9 million Lei in January — November, i.e. a 31% increase as compared to a similar period last year, which exceeds by 6.3% the figures originally planed. Vasile Tarlev also indicated that 46 million USD were spent for servicing the foreign debt and 287.8 million Lei for the internal debt.

In conclusion, Mr. Tarlev pointed that “despite all the difficulties” the year 2003 “would enter in history as the year of new achievements in the socio-economic development of the Republic of Moldova”. The President reached the very same conclusion in his address to the Parliament at its closing session. The only difference resides in the time of reference as the President indicated that in the last three years it was possible to stop the economic slowdown, to boost an economic growth, and accelerate European integration efforts. Apparently, Parliament of the European Union is of another opinion. Its resolution on the Republic of Moldova adopted on 18 December 2003, reads that “due to weak administration and a lack of effective democratic control over the administration, the economy of Moldova suffers from a high degree of corruption, nearly 80% of the market is informal, so that there is no tax revenue, there are no border controls on the eastern border and the social system is inefficient, making the country one of the poorest in Europe”. It also reads that “Moldovan Government has not been able to stabilise the economy and establish greater democracy” and called it to “intensify the process of economic and social reform, including the further development and implementation of anti-corruption measures”.

December 1–14, 2003 January 12–25, 2004