Publisher: EXPERT-GRUP Centrul Analitic Independent

Comments on the draft law regarding the amendment and completion of some legislative acts to be brought in line with the provisions of Law no. 181/2014

Comentarii la proiectul de lege cu privire la modificarea şi completarea unor acte legislative pentru a fi aduse în concordanță cu prevederile Legii nr.181/2014

Author(s): Dumitru Budianschi / Language(s): Romanian

Keywords: Comments; draft law; legislative acts; Law on Public Finances and Budgetary-Fiscal Responsibility;

Ministerul Finanțelor a elaborat și a publicat pe 25 august 2017 spre consultare „Proiectul de lege cu privire la modificarea și completarea unor acte legislative”, care are ca scop aducerea cadrului legal în conformitate cu prevederile Legii finanțelor publice și responsabilității bugetar-fiscale nr. 181 din 25 iulie 2014. Analiza modificărilor și completărilor propuse la cele 82 de acte legislative, după cum este menționat și în Nota informativă, relevă că, în linii mari, modificările propuse pot fi grupate în 4 categorii: 1. Unificarea normelor legale privind elaborarea, aprobarea și administrarea bugetelor autorităților bugetare independente și alinierea acestora la calendarul bugetar și la procedurile bugetare generale stipulate în legea nr. 181/2014…

The COVID-19 Crisis: how does the Republic of Moldova finance its budget deficit?

The COVID-19 Crisis: how does the Republic of Moldova finance its budget deficit?

Author(s): Dumitru Pîntea / Language(s): English

Keywords: COVID-19 Crisis; Republic of Moldova; budget deficit;

In addition to the threats related to the population’s health, the crisis generated by the Covid-19 pandemic presents the first economic challenges. Quarantine and social distancing measures have significantly reduced the activity of companies, with the global economic growth forecasts being significantly revised towards a global recession of about 3%. The economy of the Republic of Moldova is no exception as several sectors are already registering a drastic decrease in the sales and revenues because of the impossibility to carry out the usual activity. In addition, the public finances are being put to a severe test - on the one hand they are affected by the reduction in the tax revenues, on the other hand, there is an increase in spending to support the healthcare sector. Also, the Government cannot leave the real economy without support, the expenses for supporting the enterprises and the population will increase considerably.

Analysis of Constraints

Analiza Constrângerilor

Author(s): Alex Oprunenco,Ana Popa / Language(s): Romanian,Moldavian

Keywords: Economic Growth; Growth Diagnostics;

This report is an update of the "Analysis of Constraints to Economic Growth" study carried out for the Republic of Moldova in 2007 at the initiative of the Millennium Challenge Corporation. The purpose of the report is to identify the critical constraints for the economic growth of the Republic of Moldova, using the methodology developed by Hausmann, Rodrik and Velasco in their work "Growth Diagnostics" ("Growth Diagnostics") published in 2005. The methodology proposed by these researchers is based on the hypothesis that the rate of economic growth (equal to the rate of capital accumulation) is a function of the difference between the expected rate of capital accumulation and the effective cost of this capital. Starting from this premise, the economic constraints are grouped into three large groups that determine the low level of private investments and entrepreneurial activities: (1) those that determine low social profitability (natural and human capital, infrastructure, and innovations and competitiveness); (2) those that determine the low rate of profitability appropriation (investment climate and macroeconomic risks); (3) those that determine the high cost of capital (access to financial resources).

The Relevance of the Anticipatory Composite Index (ICA) developed by the Expert Group for defining the fluctuations of the Moldovan economy

Relevanța Indicelui Compozit Anticipator (ICA) elaborat de Expert-Grup pentru definirea fluctuaţiilor economiei moldoveneşti

Author(s): Adrian Lupuşor / Language(s): Romanian,Moldavian

Keywords: economic fluctuation; Moldowa GDP;

In April 2012, Expert-Group launched the Anticipatory Composite Index (ICA) of the Moldovan economy - a useful analytical tool for analyzing economic fluctuations, but also for anticipating possible negative shocks. This document comes to complete the initial analysis by extending the period initially included in the calculation of the ICA index, testing the anticipatory properties of the index in relation to the Gross Domestic Product, as well as applying the spectral analysis in order to establish the relevance of the ICA for defining the fluctuations of the Moldovan economy. At the same time, the analysis highlights the latest economic trends revealed by the index and presents the main risks to which the economy of the Republic of Moldova is currently exposed in the context of the economic difficulties in the Euro zone and not only. This document appears with the financial support granted by the Think-Tank Fund, Open Society Institute in Budapest, Hungary

Deciphering the mechanisms of the Moldovan Sconomy: Modeling the quantitative aspects

Descifrarea mecanismelor economiei Moldovenești: Modelarea aspectelor cantitative

Author(s): Alexandru Fală / Language(s): Romanian,Moldavian

Keywords: econometry; economic variables;

This document is dedicated to the description of the econometric model developed within the EXPERT-GRUP. The model reflects the causal relations characteristic of the economy of the Republic of Moldova. The document analyzes the connections between economic variables and reveals the quantitative aspects of these correlations. In order to highlight the effects of changing the economic variables, the results of the simulations based on the model are presented.

X-ray of the 2013 economic year and expectations for 2014

Radiografia anului economic 2013 și așteptări pentru anul 2014

Author(s): Author Not Specified / Language(s): Romanian,Moldavian

That document constitutes the sixth annual economic radiograph carried out by the Independent Analytical Center EXPERT-GRUP. So far, such x-rays have been made for the years 2008-2012, the purpose of which is to provide readers with an analytical overview of the major economic developments that marked the year and help them to better understand their implications. The current edition contains 3 charts: (i) top 5 economic successes; (ii) top 5 economic failures; and (iii) top 5 economic challenges for 2014.

The specifics of trade relations with the Russian Federation and what are the alternative markets for Moldova?

The specifics of trade relations with the Russian Federation and what are the alternative markets for Moldova?

Author(s): Iurie Morcotîlo,Adrian Lupușor / Language(s): English

Keywords: Kozak Plan; TransdnistriaM

The Russian Federation has traditionally been one of the main markets for Moldovan companies. Due to the geographic proximity, common history and the size of its internal market this destination has always held a crucial place in the exports from our country. However, with the Russian Federation external policy activation from the past decade and the change of external vector of Moldova, the political factor started to play the primary role in the bilateral trade relations. Thus, in 2006, as a reaction to the refusal of the Moldovan side to sign and implement the „Kozak Plan” for the resolution of the Transdniestrian conflict, Russia has imposed an embargo on wine exports.

Regional development and two parallel realities. Analysis of the geographic distribution of economic growth in the Republic of Moldova

Dezvoltarea regională și două realități paralele. Analiza distribuției geografice a creșterii economice în Republica Moldova

Author(s): Iurie Morcotîlo / Language(s): Romanian,Moldavian

The current study aims to analyze, based on the available statistical data, the latest trends and developments in the regional development of the Republic of Moldova and to identify the dynamics of regional development disparities. Since regional statistics are not sufficiently developed, the analysis of regional dynamics in the study focused on the identification of processes of convergence or divergence at the branch level - industry, agriculture and investments. In addition, the Gross Regional Product for each district is estimated, without calculating its evolution over time, for the same reasons of lack of statistical information. Thus, the result of the study is the primary analysis of the regional development of the last decade and the establishment of a basis for subsequent analyses, conditional on the improvement and expansion of the official statistical component.

Diagnosis of the depreciation of the Moldovan Leu

Diagnosticul deprecierii leului moldovenesc

Author(s): Alexandru Fală / Language(s): Romanian,Moldavian

The Republic of Moldova "started with the left" in 2015. The upheaval of the foreign exchange market represents only a sequence with a greater intensity within a systemic trend of depreciation of the Moldovan leu (MDL). In turn, the weakening of the national currency that began in the last quarter of 2014 and continues to date indicates that the national economy has entered a phase of compression. At the same time, the weakening of the banking sector, caused by the explosion of dubious transactions in recent years, as well as the deterioration of the regional economic situation, which together with other determinants affect the exchange rate of the national currency, will influence the degradation of the socio-economic indicators of the Republic of Moldova during 2015.

The minimum wage: between economic efficiency and social equity

Salariul minim: între eficientă economică și echitate socială

Author(s): Iurie Morcotîlo / Language(s): Romanian,Moldavian

Keywords: minimal wage;

The given study comes to cover an informational and analytical void, to bring back to society's attention the importance and effectiveness of the minimum wage as a mechanism for reducing social inequity. Thus, the main purpose of the study is to analyze the reaction of the labor market to the administrative incursion and whether the most needy blankets, indeed, benefit from the establishment of minimum wage ceilings. At the same time, due to the insufficiency of statistical data regarding the distribution of salaries among different categories of workers, the respective study has rather a descriptive aspect and presents only the first step in the much more complex research of the consequences of the use of the minimum wage for the national economy.

Moldova and Russia: Between Trade Relations and Economic Dependence

Moldova and Russia: Between Trade Relations and Economic Dependence

Author(s): Ana Popa / Language(s): Romanian,Moldavian

Signing of the Association Agreement (AA) with the European Union (EU) and establishment of the Deep and Comprehensive Free Trade Area (DCFTA) with EU in 2014 generated significant dissatisfactions from the Russian Federation’s part. Sanctions were applied almost immediately by setting import duties and banning the import of some products originating from Moldova. Thus, the trade relations between Moldova and Russia are still expected to be unclear, especially with regards to the Moldovan exports. The study analyses the exposure of Moldovan economy and economic sectors to the exports to Russian Federation and its evolution in the last decade, when the first important sanctions were imposed against Moldovan products.

Evaluation of the Moldovan banking sector for the year 2015

Evaluarea sectorului Bancar Moldovenesc pentru anul 2015

Author(s): Alexandru Fală / Language(s): Romanian,Moldavian

Keywords: Banks in Moldowa;

This paper represents a brief analysis of trends in the banking sector in the context of the decapitalization of 3 important banks and the crisis of credibility generated for the entire system. From the wide range of indicators that reflect the state of the banking sector, a narrower set of parameters were selected, the examination of which allows for a diagnosis with a high degree of accuracy. The analysis of the situation in the sector was carried out by researching the following components: the evolution of the exchange rate, the attraction of storage resources, the lending activity and the quality of the loan portfolio, aspects related to the liquidity of financial institutions and the level of capitalization of the banking sector. The analysis of these indicators allows a more accurate understanding of the magnitude of the crisis in the banking sector, as well as its resilience to other similar shocks. The conclusions of this short diagnosis must serve as an analytical basis for the extensive plan to rehabilitate the banking sector.

Rating of transparency and quality of bank shareholdings

Ratingul transparenței și calității acționariatelor bancare

Author(s): Adrian Lupușor,Dumitru Pîntea / Language(s): Romanian,Moldavian

Keywords: Moldawian Banks;

The rating does not reflect the level of solvency of the banking institutions, nor the profitability and profitability indicators. Thus, banks with a poor score do not necessarily present any risks for financial stability. At the same time, the rating does not aim to give any assessments regarding the level of transparency and quality of commercial bank shareholders, but only provides a comparative analysis in this regard.

The evolution of trade in goods between the Republic of Moldova and the European Union in the first years of operation of the Deep and Comprehensive Free Trade Area

Evoluția comerțului cu bunuri dintre Republica Moldova și Uniunea Europeană în primii ani de funcționare a Zonei de Liber Schimb Aprofundat și Cuprinzător

Author(s): Alexandru Fală / Language(s): Romanian,Moldavian

Keywords: Comprehensive Free Trade Agreement;

On September 1, 2014, the Deep and Comprehensive Free Trade Agreement between the Republic of Moldova and the European Union (ALSAC) entered into force. The agreement represented a natural step in the evolution of economic relations between the Republic of Moldova and the EU. Thus, after several successive expansions of the trade regimes that Moldova had with the EU (the general system of trade preferences - "GSP", which in 2006 was extended to "GSP+", followed by the autonomous trade preferences - "ATP" starting with 2008) moved to a new level of economic cooperation: the creation of the Deep and Comprehensive Free Trade Area (DCFTA). The Free Trade Area involves the mutual elimination of barriers to bilateral trade. However, the liberalization of trade with the EU will occur gradually, to allow Moldovan companies to adjust to the new economic realities.

Electoral Promises between Populism and Constitutional Compliance. Analysis of the socio-economic components of the candidates’ programmes in the 2020 presidential elections.

Electoral Promises between Populism and Constitutional Compliance. Analysis of the socio-economic components of the candidates’ programmes in the 2020 presidential elections.

Author(s): Adrian Lupușor,Stas Madan / Language(s): English

The electoral promises should be in compliance with the constitutional mandate (constitutional compliance), provide realistic instruments that would ensure their feasibility (e.g. funding sources, implementation tools, concrete targets) and be judicious for the balanced and sustainable socio-economic development of the country. At the same time, we condemn the irresponsibility of those electoral contestants who compete in promises, without taking into account the financial possibilities and the fiscal space of the country, as well as the mandate assigned by the Constitution to the president of the Republic of Moldova. We call on civil society and media to critically and thoroughly analyse, monitor and inform the general public about the essence of electoral promises and, subsequently, about their implementation. This would make the politicians more accountable and, in the long term, would increase the quality of the political class, which is one of the main preconditions for reforming and modernizing the country.

Post-COVID-19 Crisis: what will the Moldovan Economy look like?

Post-COVID-19 Crisis: what will the Moldovan Economy look like?

Author(s): Valeriu Prohniţchi / Language(s): English

Keywords: Covid-19;

COVID-19 left a rather deep footprint on the Moldovan economy, although the 7% GDP reduction suffered in 2020 was partly due to the impact of the drought. The vulnerability of the Moldovan economy to such complex and intertwined crises is one of the most important lessons to be drawn from the economic year 2020. To some extent, this double source of fiscal vulnerability may explain the modest response from the part of government to COVID-19. However, the lack of vision of the Moldovan policymakers left the society and economy bearing the full brunt of the crisis, with potentially damaging political consequences for the future. The crisis revealed how timely the purge of the banking sector has been and how important it is to consolidate its progress. In the short-term, Moldovan companies will continue responding to the crisis by adopting new technologies and new modes of using labor, whereas consumers are likely to become a bit more frugal, at least for some time. In the longer-run, structural responses are necessary to enhance the resilience of the economy, including a policy for rebuilding domestic industrial capabilities, the creation of more solid budgetary reserves and development of capacities for evidence-based policy, from design to impact evaluation.

The "European European Village" program, ed. in the North of the country: successes and gaps in the way the program is carried out, the budget distribution process and the quality of the implemented projects

Programul „Satul European European”, ed. în Nordul țării: succese și lacune în modul de desfășurare a programului, procesul de distribuție a bugetului și calitatea proiectelor implementate

Author(s): Author Not Specified / Language(s): Romanian,Moldavian

Keywords: European Village;

We have selected the "European Village" program for monitoring because it appears to have several deficiencies in transparency and implementation. We found, preliminarily, that some municipalities that applied for funding were not selected, contrary to official statements, and that the distribution of projects seems to have been influenced by the political affiliation of the mayors. Thus, this report will evaluate the allocation of the budget and resources within the targeted program, verifying whether they have been distributed fairly and efficiently to support the real development of rural communities in the Republic of Moldova. We will also review the quality of implemented projects to ensure that public funds have been used in a way that brings tangible benefits to citizens.

What interventions (don't) work to reduce peak-hour energy consumption

Ce intervenții (nu) funcționează pentru reducerea consumului de energie în orele de vârf

Author(s): Rustam Romaniuc / Language(s): Romanian,Moldavian

As the Republic of Moldova faces rising energy costs, especially during peak hours, the Government has launched communication campaigns aimed at reducing consumption. Recent reports show that imported electricity during peak hours can cost two or three times more than locally produced power. This article presents an analysis of interventions tested in different countries with the object of managing energy demand during peak hours using behavioral economics. Field studies carried out worldwide offer valuable lessons for the Republic of Moldova.

The resilience of economic relations between the Republic of Moldova and the European Union in the face of shocks

Reziliența relațiilor economice între Republica Moldova și Uniunea Europeană în fața șocurilor

Author(s): Marina Soloviova / Language(s): Romanian,Moldavian

In this text, we report on the importance of the European vector for the sustainable economic development of the Republic of Moldova, as well as on the remarkable resistance shown by our economic relations with the European Union, despite the persistence of the regional security crisis. Currently, the European Union is not only the main commercial partner of the Republic of Moldova, but also the primary source of direct investments in the Moldovan economy. Moreover, both Moldova's export to the EU, as well as investments and remittances received from the EU in 2023, have increased, even if economic flows with other countries have decreased. Also, during 2023, the European Union continued to offer the Republic of Moldova financial support in the form of loans and grants for modernization and reform projects, but also in support of the vulnerable population.

Analysis of the consumer protection framework. Diagnostic Report, Gap Analysis and Roadmap for Advancing Reform

Analiza cadrului de protecție a consumatorului. Raport de diagnostic, analiza decalajelor și foaia de parcurs pentru promovarea reformei

Author(s): Adrian Ermurachi,Stanislav Ghilețchi / Language(s): Romanian,Moldavian

Keywords: consumer protection;

The report highlights a number of normative and institutional challenges, including the lack of full correlation and synergy of the normative framework, the role of the Ministry of Economic Development and Digitalization in the coordination of consumer protection, the lack of continuous training programs for officials responsible for protection consumers and the absence of a practice of planning adequate budgetary resources for consumer protection activities.