Activity of the Government on September 27 – October 10, 2005

Appointments

The cabinet of ministers appointed former defence minister Boris Gamurari as Moldovan ambassador to Poland on October 4. Now Gamurari holds the office of deputy manager-general of Lukoil-Moldova company.

Also, the executive named Moldovan Ambassador to Belgium Victor Gaiciuc as Brussels-based Moldovan ambassador to Luxembourg.

The cabinet reconfirmed Ion Moraru as deputy director-general of the National Bureau for Migration.

Sittings. Decisions

Public administration reform — with international support alone

Premier Vasile Tarlev has met with a group of international experts who will assist the executive to make a functional analysis of central public administration authorities and to draft a reform strategy of the central public administration. These measures are part of the action plan on functional analysis, elaboration and implementation of the strategy concerned on basis of the July 15, 2005 governmental decision. The executive is to approve the strategy by late 2005 after competent national and international structures including the World Bank examine it. The Swedish International Development Agency (SIDA) and UNDP/Moldova have coopted the international advisers.

To mention that the Moldovan president said last spring, when the current executive was created, that the new governmental team is reformed on basis of modern public management principles. However, the reform was limited at modification of name of central authorities, merger of several independent departments in ministries, and massive reduction of the number of employees, measures which were not preceded by economic-institutional expertise, nor they had an adequate transparent nature.

Implementation of EGPRSP

The prime minister chaired a working sitting on implementation of the Economic Growth and Poverty Reduction Strategy Paper (EGPRSP), with the Economics and Trade Ministry saying that it starts implementing the objectives and tasks stipulated by EGPRSP, especially the 2005–09 Activity Porgramme of the government and sectoral action plans. It was noted that most of macroeconomic indicators register positive trends, and some forecasts included in EGPRSP “have even been exceeded.”

According to the prime minister, the success of EGPRSP depends on efforts of entire society and the organisation of some regional forums was solicited for this purpose, in order to evaluate the impact of implementation of EGPRSP on every settlement. Also, the premier solicited a more active participation of civil society and local public administration in implementation of EGPRSP.

State budget over-executed

The Finance Ministry told the October 4 cabinet sitting that the state budget was executed 107.4 percent regarding revenues in January-September 2005. Incomes in the amount of 5.606 million lei (about 445.2 million dollars) were raised to the state budget in nine months, or by 1.830 million lei or 48.5 percent more than in the similar period of 2004. As much as 38.6 million dollars was transferred from the budget for the state foreign debt service.

According to data for January-August, customs revenues accounted for 3,456 million lei (274.4 million dollars). About 200 million lei (15.9 million dollars) was raised in net income of the National Bank of Moldova, while the revenue from a grant offered by the European Commission within the Food Security Programme for Moldova amounted to over 140 million lei (some 11.2 million dollars). Also, incomes from activity of real economy (production, direct taxes and non-customs fees) count for only ¼ of the total of budgetary revenues.

Decisions

The number of documents needed for entrepreneurial activity is still high enough in spite of a considerable reduction

The executive has approved the list of authorisations and certificates issued by administrative bodies for start of business activity in Moldova. According to the list, 125 documents for confirmation will be in effect, and more than 70 of them will be issued for free. The document establishes that a tax for permits and certificates will be in effect only if the legislation stipulates it, while the general term for issuing of documents must be maximum ten working days.

Also, the cabinet of ministers approved the register of official documents regulating the entrepreneurial activity, documents issued by executive, central specialised bodies of public administration, and other central administrative authorities. According to the register, the 27 administrative authorities will work in compliance with more than 420 normative documents, while another about 100 normative documents were abrogated because they are abusive or unfit the market economy principles.

The executive passed these decisions for implementation of the December 16, 2004 law # 424-XV on revision and optimisation of normative documents regulating the entrepreneurial activity (the so-called “guillotine law”), a law aimed at reform of state regulation of entrepreneurial activity. Most of businessmen participating in the recent investment forum in Chisinau described the guillotine law as an efficient measure for reduction of bureaucratic barriers on way of business, but warned that its implementation is delayed.

Financing of parties from state budget

The executive approved a draft law on financing of political parties and electoral campaigns, which will regulate the modalities of financing of parties and other social-political organisations (including during electoral campaigns), control of financing, restrictions and sanctions for violation of necessary legal orders.

The draft says that the state will subsidize the activity of parties every year with a total amount of maximum 0.02 percent of state budget incomes for the reference year (as for example, this amount would be maximum 1,936,000 lei for 2006)

Three budgetary subsidies will be in effect:

Basic — worth 1/3 of the total state subsidy, a subsidy which will be equally distributed to political parties with representatives in parliamentary factions;

Proportional — worth 1/3 of the state subsidy, a subsidy proportional with the number of mandates of every political party in legislature;

Arrear — worth 1/3 of the total state subsidy, a subsidy for all political parties which participated in electoral campaign but did not win mandates proportionally with the number of gathered votes.

The draft also comprises provisions on granting of interest-free credits for electoral campaigns; conditions and mode of reception of donations during electoral campaigns; limit of donations which can be received in a fiscal year; interdictions for foreign financing of electoral competitors; transparency and control of funds, etc.

This draft law was worked out at the recommendation of the Council of Europe, being mainly inspired from a similar law of Romania adopted in 2003, and more than half of its provisions are part of the draft that the Chisinau executive has approved. To mention that the executive delivered a new draft law to the parliament in 2000 regarding parties and social-political organisations, a draft adopted in the first reading that calls for financing of parties from the state budget. The reasons why this draft was not adopted remain unknown so far, and its examination should be normally resumed in a package with the recent initiative of the executive.

Free social apartments

Under a governmental decision, socially vulnerable categories of population will have the possibility to obtain housing for free, while construction of residences will be financed from state and local budgets, bank and mortgage credits, as well as foreign grants.

Although an exact term for finalisation of constructions is announced — 2011, no potential cost and volume of residences were established so far. However, the Chisinau Municipal Council will distribute the residences. Mass media has recently mirrored the scandal related to distribution of social apartments in a block built by municipal authorities, with the list of beneficiaries including functionaries of the Chisinau City Hall and local council, prosecutors, law enforcement agents, and other persons who are not part of very needy categories. The minimum construction cost of a block with 50–60 apartments is about 1.5 million dollars.

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