In 2006 was elborated and aproved the Momorandum with IMF regarding the economic and financial policies for 2006-2008 period. Thru this action was lunched the program of cooperation with IMF for a perioud of 3 years , on the basis of the Mechanism of Poverty Reduction and Economic Growth, in total amount of 80,08 millions of DST. Aproval of this Agrement alowed Republic of Moldova to benefit imiteatly from 11,44 mil DST. Aditionaly, was initiated the elaboration and aproval of thre Memorandum on economic and financial policies for 2007. on the basis of this document the Moldova beenfited from a financial suport fomr IMF of 46 mil USD, with the purpose to over the externel shocs on national eocnomy.
In 2006 wewre lunched a series of programes with World Bank, mainly „Competitivity Enhacement”, „Rural Invetsments an Services, RISP II”, „Qulity Rural Education”, „Management of the Public Finances”
In 2007 the following agreements were signed:
On May 3rd 2007 between Republic of Moldova and the International Association for Development, was signed the Financing Agreement on providing a credit addressed to the financing of the project for support of the programme on roads in total amount of 10.8 SDR (about 16 million USD);
On 4th of June 2007 an Agreement was signed between the Government of the Republic of Moldova and the government of Republic of Poland on providing a technical credit – realisation of certain investments projects that deal with the provision with drinking water and environment protection in the Republic of Moldova in total amount of 15.0 million dollar USD;
On 18th of June 2007 was signed the Framework Agreement to loan with Development Bank of the Council of Europe, addressed to partial financing of the Project for Building Social Spaces in Moldova in total amount of 4,9 million Euro.
On 28th of June 2007, an Agreement of Financing was signed between the Republic of Moldova and EBRD, on providing a credit for financing the road reconstruction project in a total amount of 30 million Euro;
On 28th of June 2007, an Agreement was signed between the Republic of Moldova and EIB on providing a credit to finance the project European roads in the Republic of Moldova in total amount of 30 million Euros.
MoFin
MET
NBM
3. Achieve a long-term solution to the external debt problem through a combination of a rigorous and credible fiscal policy and debt rescheduling /restructuring in agreement with creditors.
In may 2006 the negotiations regarding the restructuring of the external debts took place, as a result of this meeting, on 12th of May 2006 the minutes were signed – verbally with the bilateral creditors – the members of Paris Club on consolidation of the external debt of the Republic of Moldova. After this document was signed the IMF approved the new arrangements for the implementation of the EGPRS in Moldova starting 5th of May 2006. According to the minutes signed the amount of 150 million USD will be consolidated from the contractual debts of the Republic of Moldova until 31st of December 2000. By the end of the year 2006 the Government signed the bilateral agreements with all the members of the Paris Club in this way fulfilling all the obligations mentioned in the minutes signed in Paris.
MoFin
4. Adopt a comprehensive MTFF, covering the 2004-2006 periods, integrating the central government budget, the local government budgets, the public social insurance budget, extra-budgetary funds as well as external financial assistance.
The MTFF will be based on sound macro-economic projections, and will be
consistent with the EGPRSP and the programmes to be agreed with the IFIs. In addition contingent liabilities should be carefully monitored.
MTEF (2004-2006) was approved by the protocol Decision no.8 from 9th of July 2003. The MTEF (2004-2006) was strengthen by:
- including budget for the state social insurance, of projects finances from the exterior, funds and other extra budgetary resources;
- a more extended analysis of the functional expenditures and by economic category;
- a more detailed analysis of the expenditures programmes in three areas: education, health protection and social protection.
The objectives of the fiscal policy, that are directed towards continuity in insuring the stability and previsibility of the budget income, promotion of the fiscal qeuity, economic growth encouragement, were adopted by governamental decision nr 1079 from 19th of october 2005 as a component of the MTEF for the 2006 – 2008 period, thru GD nr. 813 from 11.07.2006 the objective of the fiscal policy and the fiscal administration policy for the year 2007 as a part of the MTEF for 2007 – 2009 years were elaborated and aproved.
Thruought the GD nr. 756 from 2nd of July 2007,the MTEF for the years 2008-2010, including the Objecioves of the fiscal policy and fiscal administration policy was aproved. MTEF is in full concordance with EGPRSP. After the development of the NDP the MTEF will be in full concordance with this document.
MoFin
5. Make progress in reducing the burden of excessive public debt, in particular foreign debt.
Regarding the debt to the National Bank of Moldova, it was reimbursed according to the provisions of the law on state budget for 2005, 2006 and 2007:
Completed – 2005– reimbursed a total of 127 million lei
Completed – 2006 – reimbursed a total of 118.8 million lei
Completed – 2007 – reimbursed a total of 118,8 million lei
Hereby, the Government debt to the NBM, on 30th of June 2007 constituted 1 973, 4 million lei.
MoFin
6. Take concrete steps to improve public expenditure effectiveness, transparency and accountability in consultation with IFIs/EU experts. In particular, enhance the incidence on poverty of social spending. Take steps to improve revenue collection and broaden the tax base, particularly by gradually eliminating tax exemptions.
Permanent
In the Public National Budget for the 2007 year, the amount of spendings in GDP for the social chapter increased by 1.95 precentage points. In comparios with 2006, the spendings in this sector obtained near 60% from aditional finances. Comparing to 2006, the spendings increased in the health sector with 23%, education 16.1%. Spending directed for to social sector increased with 15.1%. A priority in funds alocation in 2007 was the economic sector, who’s contribution to GDP increased with 0.33 precentage points. Comparing to 2006, the spendings in the econiomic sector are estimated to increase to 15,7%, mainly from the sources envisaged for transport and road management - 62.8% and argrar sector – 23.2%.
In the field of improving the transparency of the public spendings, are taking measures in monitoring and publishing the results of the performance of the public sprndings. Monthly these data are published on the site of the Governement of Republic of Moldova, and starting with 2006, the mentioned data is published also on the web site of the Ministry of Finances.
Completed 2006
During the year 2006 a Study was performed on the possibility of reforming the fiscal system and extending the taxation base, especially by gradual elimination of the fiscal facilitations. The summary of the study in form of technical note is annexed to the MTEF (2007-2009) that was published by the GD no.813 of 11.07.2006.
(suspected) fraud and other irregularities affecting national and international funds
CCECC
MoI
8. Ensure full compatibility of EG PRSP with Medium Term Fiscal Framework which guarantee fiscal sustainability
Completed 2006
With the objective to increase the correlations of the policies with the resource allocations from the MTEF, in the process of development of the MTEF for 2007- 2009, a dialog with the public authorities was initiated. In this context, the respective amendments were made to the action plan for elaboration of the MTEF, and the process it self was more oriented to the establishment of priorities and the maximum expenditures thresholds.
Another main objective in the process of resource allocation in MTEF for the years 2007-2009 is the support of the EGPRS policies with major impact on the economic growth and poverty reduction that was the base of sectorial division of resources.
For medium term (2007 – 2009), from the side of the budget types, the budget for state social insurance and the funds for mandatory medical assistance are increasing in comparison with the rhythms of the state budget and the budget of Gagauzia, fact that is explained by high priority due to the social character of these.
MoFin
Functioning Market Economy
(20)
Improve functioning market economy and business climate through appropriate structural reforms aimed also at achieving transparency and predictability of business conditions Further advance implementation of legislative and regulatory framework as envisaged in Art.50 of the PCA.
Take measures to improve convergence in key areas of Moldovan legislation to
EU legislation, notably in the areas identified in this Action Plan. Draw up a work programme for regulatory reform, based on (1) a list of actions to be taken and legislation to be targeted by order of priority, and (2) definition of responsible bodies with realistic dead-lines for implementation of such actions, backed up by
appropriate financial and human resources and training as well as structures to ensure co-ordination between various administrative bodies.
In order to improve business climate through adequate structural reforms, there was launched state regulatory reform on entrepreneurial activity (http://www.mec.md/rr.aspx).
The major scope of this reform consisted in substantial reducing of enterpreneurs’ dependency on administrative regulation of entrepreneurial activity, as well as decreased the consts and time for obtaining licences, authorizations. Today, one who wishes to start a business, after presenting its identity card and provisory bank account, obtain registration documents issued by the State Chamber of Registration (without being registered at other public authorities). An enterprise can be registered in 10 days, if necessary 1-3 days.
The second stage of regulatory reform started in 2006, by adopting and entering into force of a Law regarding basic principles of entrepreneurial activity (nr 235 of 20.06.2006 – Guillotine II).
In 2007, by the Government Decison no.104 of 01.02.2007 the Strategy for reforming the Regulatory Framework of the State on Entrepreneurial Activity of the Republic of Moldova was developed, that foresees an action plan with specific measures for further simplification of administrative procedures regarding the registration, administration and liquidation of the company, consolidation of the public administration capacities to run the reform and other, and the implementation of which will have a positive impact on businesses in the Republic of Moldova.
For the realisation of the point 2 of the implementation plan of the Strategy, was developed and approved by the Parliament the draft law regarding the Limited Liability Companies.
The monitoring process of the Public Authorities, on the fulfilment of the Implementation plan of the Strategy for reforming the Regulatory framework started. Based on the information provided by the public authorities was developed and presented to the Government on 07.06.2007 the Report on the Implementation of the Strategy to reform de state regulatory framework of entrepreneurial activity during the first quarter since entry into force of the Government Decison no.104 of 01.02.2007.
With the objective to optimise the activities of the Secretariat by the Working Group of the State Commission for regulation of the Entrepreneurial Activity, a guide was developed under the name “The process of review of legislative and normative acts according to the law no.235”, that was used by the consultants in the second phase of implementation “Guillotine 2” to evaluate the proposals of the line ministries and public authorities.
Through the Working Group, a direct implication of the representatives of the public and private sectors in the process of adopting the recommendation for amending the laws and existing institutional framework was ensured.
Also, it is to be mentioned that the draft law on approving de amendments to the existing legal and institutional framework of the regulation of the entrepreneurial activity was approved by the State Commission for regulating the Entrepreneurial Activity and was presented to the Ministers Cabinet for examination. The important fact is that by adopting this draft law the process of Guillotine II in the Central Public Administration will be finalised.
Adjusting the currency legislation to the EU standards In the context of adjusting the currency legislation to the EU standards, the NBM developed the draft law on currency regulation. At the development of the draft the EU legislation was taken into account, specially the Chapter 4 “Capital and payments”, title III “free movement of persons, services and capital”, part three “Community policies” from the EC Treaty (consolidate version, published in the OJ C 321 E of 29 of October 2006), as well as the provisions of the annex I to the Directive of Council of 24 of June 1988 for the application of the art.67 from the Treaty (88/361/EEC)m published in the OJ L 178, 08.07.1988, p.5-18. At the same during the process of elaboration of the draft law the legislation of other member states on currency regulation was consulted (e.g. Slovenia, Czech Republic, Slovakia, Romania, Bulgaria, Croatia, Macedonia, Serbia and Kazakhstan), as well as with other states ex. Croatia, Macedonia, Serbia, and Kazahstan.
MoET
Min Fin
2. Ensure that basic regulatory bodies are fully operational. Draw up a programme for ‘flanking’ measures, including improved standards of drafting of legal norms and regulations, ensuring appropriately functioning of regulatory bodies and accompanying implementation measures.
As mentioned above the law on „Guillotine II” establishes the quality standards for development of new draft legislation such as: a) predictability of regulation and expenditures; b) transparency when regulating by providing free access to the public to draft legislation, publication of the adopted acts in the Monitorul Oficial and including these into the single Registry; c) impact assessment of the regulations, that becomes and mandatory phase in the process of elaboration of normative acts.
The methodology for performing the Regulatory Impact Assessment and monitoring the efficiency of the adopted act was developed. It has the objective to set up the RIA process in all the public administration authorities, of central or local level.
The same law provides new provisions on the relations of the public authorities and the entrepreneurs regarding the issue of different authorisations, controls and activity suspensions etc.
MoET
3.Streamline administrative requirements for companies (approval of relevant legislation; implementation; simplification of reporting schemes and administrative obligations, limit to essentials licensing and issuing of permits necessary to conduct economic activity)
For the diminution of the costs in the entrepreneurial activity, especially in investments activity, amendments, to the law on licensing of certain types of activities, were adopted, that set the maximum prices for the renovation or copy of the licenses, and to the Government Decison no.360 of 18.04.1997, that limits the amount of the prices for urban certificates and authorisation or demolition of constructions or establishments.
With the objective to improve and to complete the regulatory framework of foundation, functioning and liquidation of the limited liability companies there was elaborated and approved by the Parliament the law on limited liability companies (nr 135 of 14.06.2007/Official Journal 127-130/548 of 17.08.2007).
As a result of the implementation of the proposals made by the Government on optimisation of the number and structure of the control and supervisory bodies in the Republic of Moldova as well as the increase of the efficiency of their activities, significantly decreased the costs for obtaining authorisations for different fields of economic activity (inclusively constructions).
Activities for reducing the number of necessary documents for receiving a license continued, as well as the increase of the efficiency of examination of the applications for license issue (8-10 days), excluding the additional payments for obtaining a license, using the principle „one stop shop office”.
MoET
MoID (Chamber os State Register)
MoET
MoFin
(CNAS)
4. Examine and implement best practice on consultation and notification of economic operators on new regulatory measures (transparency) and ensure
sufficient time for adaptation to these new regulations (predictability) of business. Develop dialogue with investors and entrepreneurs on how to improve business
climate.
The transparency and predictability of the normative acts were introduced, as basic principles in the process of regulation of the entrepreneurial activity, by the law „guillotine 2” and became mandatory since august 2007.
According to this law, the State Commission for regulation of the entrepreneurial activity is assisted in its activities by the working group, that obligatory examines all the draft laws and acts that might have an impact on the entrepreneurial activity. The working group is consisted of representatives of the businesses community, which have the possibility to express their opinion regarding the new regulations proposed by voting positively or negatively. The drafts developed by the Ministry of Economy and Trade (draft laws, strategies, government decisions) are placed on the web site of the Ministry and presented to the public for debates and suggestions.
As far as concerns the measures from the Plan proposed by the investors in order to overcome the existent problems in the investment environment, that are elucidated in the “FIA White Book”, it is to be mentioned that the working group of the State Commission for regulating the entrepreneurial activity, trough its members, especially the Foreign Investors Association, has ensured the implementation of an equal treatment of foreign investors, by this contributing to the increase of competitiveness. In this regard were taken into account the recommendations foreseen by the White book of 2006, issued by the Foreign investors Association. Here is to be mentioned that at the development of the Strategy for Regulatory Reform, approved by the Government Decison no.104 pf 01.02.2007, were taken into account recommendations stated in the FIA’s White book.
On 14th of June 2007, there was organised by MET the first session of the Working group, where the examination of the recommendations elucidated in the FIA White Book has been performed. The participants to this meeting have analysed all the compartments of the White book – 44 in total, such as the fiscal policy, employers and employees relations, fiscal facilities for investments and other.
A durable dialog is established with the representatives of the investors’ community, in particular with FIA Foreign Investors Association as well as with the business community for the purpose of improving the investments climate (successful areas of collaboration: regulatory reform, Corporate governance, EGPRS monitoring, elaboration of draft laws for Holding Companies and Credit History Bureaus).
The organisation of the annual Forum for business and investments, in Chisinau, offers an appropriate environment for a constructive consultation between the representatives of the business circles and the official authorities, with the objective of preparing the package of proposals for settin up an appropriate and attractive business and investment environment in the Republic of Moldova.
MoET
5. Establish a suitable environment for companies, e.g. adopt and implement effectively competition and bankruptcy legislation.
In order to ensure the effective functioning of the markets that are not ruled by competition, the law on natural monopolies was elaborated and sent to the Government for examination.
In order to increase the efficiency of the activity of financial institutions and other entities which allows credits, it was elaborated the draft law on credit history bureaus, which is currently examined at the Parliament..
For the fulfilment of the obligations undertaken in the area of Competition, by the Parliament decision no.21 of 16.02.2007 the National agency for Competition Protection was created.
MoET
(21)
Implementation of privatisation programme, covering in particular outstanding largescale privatisation as a priority and the energy sector.
1. Continue to improve the interface between Public and Private sector in line with WB recommendation
Law on Public-Private Partnership was adopted by the Parliament on 4th of May 2007
MoET
2. Accelerate and increase transparency of privatisation programme, covering in particular large scale privatisation in key sectors.
The Agency for privatisation collaborated with the Parliament Commissions for the finalisation of the draft law on administration and deetatisation of the public propriety, approved by the parliament in the final reading on 04.05.2007.
There were undertaken necessary measures for approval by the Parliament of the Republic of Moldova of the list of properties that can’t be privatised. These actions are at the final stage now, the list being prepared and launched for adoption.
In the reporting period, the following normative acts were developed and passed to the Government for adoption:
The regulation regarding the Agency for public property;
The regulation regarding the privatisation of the land, public property of the state;
Government Decision on the actions for realisation of the law on deetatisation and administration of the public patrimony. At the same time, this Government Decison provides the following annexes:
Annex 2 and 3 – the list of goods that can be privatised;
Annex 4 – the regulation on the method of use of the financial means obtained from the privatisation of public property.
MoET
Regional and rural development
(22)
Promote balanced regional development; reduce economic and social disparities across the country
1. Implement measures on regional and rural development, taking as a basis the approach envisaged in the EG-PRSP and using an integrated approach that builds on results of donors’ past activity in the country, as well as on EU best practice.
It is absolutely needed to obtain the exact data at local and rayon level, in order to develop the strategies for reducing the poverty and economic growth. For this purpose the MET developed the index of deprivation of small areas (IDAM) that is an expression of multiple deprivations at local community level. This index allows a comparative analysis of the development of communities from the same rayon and between rayons, as well as to ensure the development by the Government of certain better addressed sectorial policies that.
In order to estimate this index 7 areas were identified, each one representing an aspect of the rural deprivation: deprivation by the salaries, economy, demography, medical assistance, education, living conditions and geographic. The data were collected from 843 local communities starting 2006, in a special template „social-economic indicators that characterise the living conditions of the population in the communities”. Ministry of Economy and Trade continue this monitoring activity and evaluation of the data of IDAM. In 2007 the relevant software was developed that inserts, operates and logically validates the data about the social-economic indicators.
For the consolidation of the monitoring capacities at local level a process of training started on the monitoring and evaluating mechanisms, mainly in three pilot regions: Basarabeasca, Rezina and Nisporeni. For these locations were determined the monitoring indicators for the calculation of the progress made at rayon as well as local level. Trainings and seminars were performed, necessary equipment was bought. With the objective to facilitate the participatory process working groups were created for the supervision of the implementation process of the development programmes at local level.
MoLPA
MoET
2. Develop plan and undertake specific actions to promote growth of SMIs in regions and in rural areas (see also SMIs below).
Referring to the development of the institutional capacities for support of the SMIs, inclusively the consulting and the informational infrastructure at the rural level, the following should be mentioned:
Under the supervision of MET the VI-th edition of the national exhibition “Made in Moldova was organised”, from 7-12 of February 2007. During the exhibition 3 round tables were organised.
On 9th of February 2007, was organised the official ceremony of the State Award in the field of best quality, productivity and competitiveness. Distinctions were given for the winners of the “Best taxpayer of the year” and “The Trade Mark of the year”.
The finalisation of the draft law for adjusting the legal framework to the law no.206 of 7th July 2006 on supporting the SMIs sector.
The methodology of monitoring and evaluation of the Strategy for support of the development of SMIs for the years 2006-2008 was developed.
Organisation of the International Forum for SMIs from 3-5 of May 2007 and of the SMIs Conference from 4th of May 2007.
According to the provisions of the law no.206 on supporting the sector of small and medium size enterprises, in 2007 the Organisation for development of the SMIs sector was created by the Government Decison no.538 of 17th of may 2007. The main task of this organisation will be to implement the strategies and the programmes for supporting the SMIs.
The activity of the Organisation for development of SMIs will strengthen the institutional framework for implementation of the state policy in this field and will ensure the synergy and continuity for the realisation of multiple tasks for support and development of the small and medium business.
As a result of the efficient activities made by the MET on foreign investments attraction, the Government of Japan, offered to the Republic of Moldova a grant (Non project Grant Aid – NPGA) for promoting the efforts related to the economic structural adjustments:
First Tranche: at the base of the agreement signed by exchange of letters on 9th of March 2005, Moldova received 300 million Yens JPY ( approximately 2,52 million USD)
Second Tranche: at the base of the agreement signed by exchange of letters on 3rd of March 2006, Moldova received 400 million Yens JPY (approximately 3,36 million USD)
Third Tranche: at the base of the agreement signed by exchange of letters on 5th of march 2007, Moldova received 300 million Yens JPY (approximately 2,52 million USD)
Therefore, starting the year 2005, MET launched on the territory of the Republic of Moldova the programme to support and develop the SMIs sector for the promotion of efforts on structural economic adjustments. The programme’s objective is to facilitate the procurement by certain SMIs of necessary production equipment.
An important instrument, of international magnitude, in promoting the local SMIs was the International Exhibition “Small Business” an event organised every year in Moldova by the “MoldExpo” J.S.C.
With the objective to establish of certain permanent Mechanisms of consultation of the SMIs, starting 2007, the Exhibition “Small business” was transformed into a three-dimensional forum, the new component of this being the International Conference of the SMIs. The forum of the SMIs is composed from three interrelated events:
- International Exhibition of SMIs;
- International conference of SMIs;
- The Contest „Best entrepreneur in the SMIs sector” (Government Decison no.250 of 9th of march 2005).
By holding the entrepreneurs from all the sectors of SMIs, the Forum, has the objective not only to show the achievements of these but to promote them on the local as well as international markets, by offering necessary information, evaluating the efficiency of their activities and to collect recommendations and critics from the private sector on the state policy in this area. Also the international character of this Forum, offers the possibility to receive best international practices and experiences from the international SMIs partners.
MoET
Employment and social policy
(23)
Strengthen dialogue and co-operation on social matters. Ensure a closer approximation of the country to EU standards and practices in the area of
employment and social policy
1. Engage in a dialogue on employment and social policy with a view to develop an analysis and assessment of the situation and to identify key challenges and policy responses (social and civil dialogue, health and safety at work, gender equality,
labour law, employment policy, social protection and inclusion) gradually moving towards EU standards in this field.
It was developed and coordinated with the expert of the ILO the draft „National strategy on the Policies of Employment in the republic of Moldova for the period of 2007 – 2020”, that was approved by the executive in April 2007. The Strategy establishes the framework of the policies for performing a more full and efficient employment by the end of 2020. Being one of the main premise for social cohesion and integration, the increase of employment will followed by the insurance of the employers with the access to the principle of free choice, by constituting a performing human capital and making of new decent jobs in the private and public sectors of the economy.
According to the law on the state budget salary system, the implementation of the new salary payment system started by unifying the salary payment conditions.
Measures were undertaken to create the informational system of the labour market, which has the objective to improve the information access of population and facilitation of the access to free jobs. Were created and now function the local networks of the territorial agencies for employment and the central network for the National Agency for Employment and the centre of archives. In all the territorial agencies was installed the legal information programme “Etalex” with periodic update of information. National Agency was connected to the public administration’ network, inclusively with the internet service.
With the objective to increase the access to the labour market for the persons that are looking for a job, and for better administration of the informational resources, the National Agency created the unified information system on labour market (www.jobinfo.gov.md).
A study was performed with the objective of identification of the real figures on employment in the rural areas from the Republic of Moldova. The results are used by the local public authorities at the development of local annual plans of employment, which are approved by the rayon Councils.
For the improvement of the services provided on the labour market a Moldo-Swedish Project was lunched under title “Support to Public Service for Employment in the Republic of Moldova”, financed by SIDA. When this project will be implemented, three integration centres for social vulnerable persons will be created in Balti, Chisinau and Cahul cities, which will contribute to the improvement of the services provided for the disabled persons and persons released from imprisonment.
MoET
Sustainable development
(24)
Promotion of sustainable development
1. Take first steps to implement the national long-term strategy on sustainable development.
In order to focus the policies, to accent the actions and concentrate the resources for their strict implementation, Ministry of Economy and Commerce initiated a new qualitative document regarding the strategic panification for middle term – The National Plan for Development of the Republic of Moldova for 2008-2009 (NPD
