Activity of the Government on April 29 – May 15, 2006

Reshuffles

The Government has proposed Iacob Timciuc to the post of Moldovan ambassador to China. Timciuc was minister of energy until March 2005, but he was not reinvested from undeclared reasons.

The executive has decided to recall certain ambassadors of Moldova without making public the reasons:

Alexei Tulbure is recalled from the post of Resident Representative to the Council of Europe;
Mihail Manole is recalled from the post of Ambassador to the U.S., Resident Representative of Moldova to the World Bank and IMF;
Vsevolod Grigore is recalled from the post of Ambassador and Resident Representative of Moldova to the United Nations;
Andrei Neguta is recalled from the post of Ambassador to France.

Valentin Dragan was relieved from the post of deputy minister of transportation and road management, with the official motivation “at demand”, at the May 3 cabinet sitting.

Decisions

Decision for the approval of draft law on state enterprises. The document proposes to establish a new mechanism of administration of economic agents founded and owned by state.
Decision approving the draft law on withdrawal of some fields of the limited society Mold Intera Energy from agricultural circuit. The Government proposes to allow the withdrawal from agricultural circuit of higher quality fields covering 41 hectares owned by the foreign capital Mold Itera Energy for construction of a 450-MW power station near the village of Burlaceni (the district of Cahul). We note that the right to buy agricultural fields is awarded to Moldovan individuals and legal entities, in line with recent provisions to the law. The fact that a foreign company was allowed to acquire agricultural fields and the Government’s proposal to attract fields from agricultural circuit without establishing express the compensations required by law in this regard may raise the objections of lawmakers, especially because the change of destination of the agricultural field is expensive enough (about 600,000 lei a hectare).
Decision on measures needed to create the Ministry of Local Public Administration. The new ministry will take over a part of functions from the agency for regional development, the latter turning into agency for construction and territorial development. The structure and the regulation of the new ministry were elaborated within one month. The Government did not establish if the persons in charge with elaboration of documents on the new ministry will be part of its competence and did not present a candidacy for the post of minister of local public administration.
Decision on rise of salaries of public functionaries who ensure the technical service of public authorities. The document is aimed to enforce the law on salary in budgetary sector; it stipulates a rise of basic salaries by about 30 percent and will be take effect on December 1, 2005 with retroactive effect.
Decision on rise of number of personnel of the Customs Service. The Government has decided to increase the number of customs officers by 58 persons, as a new subdivision was created to issue origin certificates for exported goods. The Chamber of Commerce and Industry (CCI) of Moldova was in charge with this activity until now, but the document stipulated by executive does not say if the experienced CCI employees will work in he new customs subdivision.

Sittings. Decisions. Declarations

Resumption of relations with IMF and restructuring of debts within Paris Club

A new cooperation agreement with the International Monetary Fund was approved on May 5, after almost four years, and it stipulates the release of 118 million dollars for a 3-year term. The agreement calls among others for finalisation of the central public administration reform; better public finance management; reduction of inflation rate down to 10 percent; maintenance of macroeconomic stability; closure of the board of state creditors by the end of 2008.

The Paris Club creditors accepted a restructuring of Moldova’s external debt on May 12. Moldova will have to repay only 60 million dollars out of 149 million dollars the next three years due to the agreement during the implementation of the cooperation agreement with IMF, and the debts were restructured for a longer period.

New tackling in privatisation sector

According to the Government, the state needs a new conceptual tackling of privatisation and administration of public patrimony. The methods of privatisation have been reviewed for this desideratum, with the Government approving amendments and completions to some normative acts regulating the field. The Government will approve in early autumn a draft law on privatisation and administration of public property based on two principles: through a contest and through the Stock Exchange of Moldova. Public share packages in 32 joint stock societies will be exposed at the Stock Exchange of Moldova between May 22 and June 9, 2006 and the executive hopes to raise at least 100 million lei from them. According to data of the Privatisation Agency, the public patrimony of Moldova was worth 43.6 billion lei on July 1.

Stance of Government over higher prices of fuels

All filling stations increased the gasoline price (by 6.5%) and the Diesel oil price (by 5%) on May 3 due to higher prices of fuels on world oil market. It should be noted that the prime minister told the General Assembly of the republican union of associations of agricultural producers Uniagroprotect on March 14, 2006, that the price of Diesel oil acquired by agricultural producers will not grow until July 2006, as a moratorium was agreed at a sitting with biggest importers of oil products on market. The executive said that fuels will be imported for lower prices after the Giurgiulesti oil terminal will open (in April-May).

Farmers will fail to work all fields because of bad climatic conditions, lack of circulating means and recent rise of prices of fuels (more than 25 percent of fields are not seeded). Farmers see the solution in subsidising by Government of works requiring many fuels and granting of subsidies for sale of agricultural production. “An example would be that the state pay one leu for every kilogram of grapes supplied to wine plants,” federation chairman Vasile Mirzenco said. The Government recommends farmers to acquire Diesel oil from the state-owned enterprise Moldresurse, which sell it for lower prices but has a limited stock.

First estimates of new social performance mechanism

The pilot project implemented on basis of a new concept on optimisation of the social assistance system aims to choose the best method of granting of social aid to people in need. Some methods for selection of beneficiaries of normative compensations are being tested, based on evaluation of the overall revenue of family, and about 32,000 persons benefit of the pilot project. The prime minister wants that the system of nominative compensations covers all socially vulnerable people and a greater attention will be paid to a right calculation of real earnings of the family who seek more social assistance from state, in order to prevent the payment of compensations to people who are not needy.

Dissatisfaction with state of roads

Vasile Tarlev has raised dissatisfaction with the state of roads in Moldova, ordering competent bodies to speed up their renovation by respecting the quality norms. The Ministry of Transportation and Road Management was told to table action plans on implementation of priority projects: reconstruction of the Chisinau-Leuseni route for which the Government has already allocated 50 million lei; renovation of some national roads. According to information unveiled by minister of transportation and road management, about 40 million lei or some 21 percent of the annual volume was already spent for renovation and construction of roads in the first four months of this year.

New dissatisfaction with state of internal trade

A sitting convoked by prime minister has studied the situation of trade, necessary measures for development of this sector. After the president has earlier convoked a similar sitting, Prime Minister Vasile Tarlev raised dissatisfaction with situation on internal market, with the fact that the value of imported goods is often lowered at customs stations, damaging the state budget this way (the annual volume of internal trade exceeds 30 billion lei). A working group created by Government will elaborate an action plan on trade development within two weeks and a concept on trade development in perspective by July 1. The Customs Service will elaborate and implement an electronic system to control external deals in order to establish the right value of imported goods.

The Moldovan prime minister has discussed problems related to development of internal trade network with a representative of the German company Plus Discount (part of the international group Tengelmann), which intends to open a network of 30 markets in Moldova.

SEECP summit

Vasile Tarlev has attended the summit of heads of state and government of the South East European Cooperation Process (SEECP) in Thessalonika, Greece, which focussed on regional cooperation as way to European integration, cooperation to develop regional infrastructure, etc. The prime minister of Moldova has delivered a speech on Moldova’s activities in SEECP.

The minister of foreign affairs and European integration has released a declaration saying that the celebration of the Day of Europe coincides with Moldova’s entry in the South East European Cooperation Process (SEECP), reaffirming on this occasion the commitment to comply with all requirements needed to join the united Europe. The minister noted that a contest will take place soon to select civil society representatives for participation in creation and functioning of Centres of European Information in Moldova.

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