ECO-BUS WEEKLY DIGEST September 13-19. Most important Economy & Business news by IPN
● MONDAY, September 13
Chisinau City Hall to compile blacklist of entrepreneurs who do not honor commitments
By the end of this year, the municipality will produce a ‘shame list’ or a blacklist that will include business entities that didn’t honor the commitments undertaken by contracts signed with the public administration of Chisinau. Such a request was made by the mayor of Chisinau Ion Ceban in the ordinary meeting of officials of municipal services. “I want a list of people who can work and should work, while those who do not comply with different standards will top the “shame list”. This should be clear to everyone, primarily those who cannot work even if they won contracts, as there are companies of bad faith. This is also a public warning for these companies,” stated the mayor. “The people should understand that you cannot take public money and do works inappropriately. I address the district heads, the Transport Division that has a lot of contracts, the Public Amenities Davison that also has many contracts. If the people cannot honor their commitments, they will be put on the ‘shame list’. If the situation is completely bad, they will be put on the blacklist and we will not do business with these companies anymore.”
Number of card payments 55% up
The bank card payment indicators in the second quarter of this year continued to follow an upward trend, the number of cards in circulations rising by 7.9% compared with the corresponding period last year. The number of cashless payments with cards issued in the Republic of Moldova grew by 55.2% on the second quarter of 2020. 87.3% of the number and 87.0% of the value of CT (credit transfer) operations were initiated in an electronic format through the agency of automated distance service systems, which reflects the level of digitization of the payment services in the Republic of Moldova. Direct debiting remains an instrument that is not widely used in Moldova. Until the end of the second quarter of this year, this instrument was used by 21,600 payers. Direct debiting on Moldova’s territory is used only by private individuals, primarily for paying for public utilities. The automated distance service systems (ADSS) have become increasingly popular among users. The number of users of ADSS at the end of the second quarter of 2021 increased compared with the same period last year, mainly due to the rise in the number of users of mobile payment systems. The number of active users rose by 21.3% compared with the second quarter of 2020 following the expanding need to use ADSS for making payments, especially in times of the COVID-19 pandemic.
●TUESDAY, September 14
Radu Marian: PSRM-Șor law to lower retirement age is a crime
The government will keep the current retirement age. PAS vice president Radu Marian considers “the decision to lower the retirement age taken by the PSRM-Șor tacit alliance” of the previous legislature is a crime against older persons. Marian said the government will not allow this law to take effect in January 2022 as the Republic of Moldova faces a workforce crisis. According to Radu Marian, the rise in the minimum pension up to 2,000 lei is an imperative of current realities. In 2022, the implementation of this decision will cost the state budget over 2 billion lei. The government hopes to obtain this money as a result of the annihilation of the schemes to appropriate public funds. “This year, the rises are based on internal funds, following the increase in the national budget revenues. In the future, we aim to ensure economic growth. The schemes to embezzle public funds will be stopped. Furthermore, all the countries resort to borrowing. The question is at what cost one borrows? The Socialists isolated the country at foreign level and borrowed money internally at a rather high cost. If need be, we will borrow at extremely low costs for infrastructure projects as we enjoy openness and credibility at foreign level. Our intention is to raise pensions and to create economic growth conditions,” Radu Marian stated in the program “Emphasis on Today” on TVR Moldova channel.
Content of Extraordinary Commission’s decision runs counter to Minister Nemerenco’s statements, MĂR
The decision taken by the National Extraordinary Public Health Commission on September 9 does not stipulate the way in which the visitors of recreational facilities will present COVID-19 documentation and does not define a mechanism for verifying these documents, said representatives of the National Association of Restaurants and Leisure Places MĂR. According to them, the content of the decision actually runs counter to the statements made by Minister of Health Ala Nemerenco in a TV program in which she stated that the restaurants are not covered by the obligation to present COVID-19 documentation. The Association noted that the decision also does not describe the mechanism of control that will be used by the inspection bodies. “The state authorities again issue only general executory decisions without explaining the implementation and control mechanisms, leaving the subjective appraisal of the observance or non-observance of the Commission’s decision to the discretion of inspection institutions. As in the past, this working manner leaves room for abuses against those who should execute the Commission’s decisions,” said the representatives of MĂR. In a statement, the Association says the Code of Economic Activities of the Republic of Moldova does not stipulate such notions as “nightclub” or “dance hall”. The range of services provided by the hospitality industry expanded, but the Code wasn’t updated. Currently, any type of public eating place can provide such services as organization of recreational activities, dances, conferences and concerts.
National Wine Day will not be staged this year
The 2021 National Wine Day will not take place due to the pandemic. A document to this effect was signed by Minister of Agriculture and Food Industry Viorel Gherciu and was transmitted to the National Office of Vine and Wine. “Dear representatives of the wine industry, supporters and promoters of the Moldovan wine, we inform you that all the festive public events, including the National Wine Day, this year will not be held in connection with the pandemic, in a move to prevent the spread of Covid-19 (SARS-COV-2). The National Wine Day is more than an event and, even if we do not meet in the Great National Assembly Square this year, we are near, celebrating the Moldovan traditions, proud of the product that makes us famous all over the world – the wine and the country brand Wine of Moldova! Take care of you and the dear ones,” the National Office of Vine and Wine posted on Facebook. The decision was made in the wake of a circular issued by Prime Minister Natalia Gavrilița, which urges to avoid the organization of large-scale events, festive events and other activities with the physical presence of persons.
●WEDNESDAY, September 15
Transport authorizations will be issued only for involved eligible pool
Road transport authorizations will be issued to road transport operators and enterprises in Moldova only for the involved eligible pool in a move to exclude the units of transport that are not engaged in international traffic from the process of issuing authorizations. This is provided in a bill that was approved by Cabinet on September 15. By the same bill, the obligation to use international road transport authorizations within 30 days of the issuing was excluded. The obligation for the road transport operator to restore the authorization within 90 days of the issuing if this is not used was yet maintained. According to Deputy Prime Minister Andrei Spînu, Minister of Infrastructure and Regional Development, the bill is aimed at stopping corruption in international freight transport. A broadly used scheme was the introduction in the truck pool of other units of transport that weren’t really used in international freight traffic and the number of such units and of recipients of more authorizations was artificially increased this way.
Igor Dodon: New administration does not want to deal with problems related to energy
The leader of the Party of Socialists Igor Dodon said that ahead of a new heating season, the new administration of Moldova is unwilling to deal with energy-related issues at a time when the price of gas continues to hit new highs. According to Dodon, gas futures on the European market rose by 10% to US$950. “Hungary and Serbia, if we do not take into account Belarus, can serve as an example of countries whose administration had talks with “Gazprom” during the last few weeks and signed advantageous agreements on the supply of gas for the citizens of these countries,” stated Igor Dodon. President Maia Sandu in a TV program said the legislation provides that SA “Moldovagaz” is responsible for the commercial and contractual relations and she does not think that a better price will be negotiated if the Government becomes involved as there is an established formula and a market price, while the price at which Moldova will purchase gas depends on the prices at international level.
Andrei Spînu: It is too early to say how gas prices will evolve for Moldova
Deputy Prime Minister Andrei Spînu, Minister of Infrastructure and Regional Development, said it is too early to estimate how the gas prices will evolve for the Moldovan citizens. “We have another mechanism for setting prices for Moldova, which is different from that used on international stock exchanges. Even if the price of gas increased considerably on the international markets, this will not immediately affect the Republic of Moldova,” Andrei Spînu was quoted by IPN as saying in a news conference. The Ministry is having discussions with Moldovagaz. A discussion with the company’s director was held today to consider the next steps up to the signing of the contract for the supply of gas. Moldovagaz also discusses with the Russian gas giant Gazprom and the Ministry in the immediate period will probably have discussions with Gazprom too on the gas issue,” stated Andrei Spînu. The official noted that the Government is considering a program to support the vulnerable citizens in the cold period of the year if the gas tariff is increased in the near future.
●THURSDAY, September 16
Trade unions seek adequate protection from excessive rise in prices
The National Trade Union Confederation of Moldova is concerned about the recent rises in the prices of baked products, dairy products, vegetables and other food products and in oil products. The trade unions consider the poorest sections of the population should not be left without support in this situation. “It cannot be explained why the prices of baked products go up when we have important growths in the volume of harvested grain crops. According to trade unionists, the state should take measures to subsidize production and to provide the population with “social” bread that would be accessible to the persons with low incomes (pensioners, unemployed persons, persons with special needs, etc.)” says the Confederation’s statement. This notes that the rise in oil products has an avalanche effect and leads to an increase in all the prices and tariffs, primarily in the costs in transport, agriculture, the technological processes, where fuel is used in large quantities. All these rises result in the diminution of the purchasing power of salaries and the impoverishment of the population.
WINET holds teleconference on importance of wine history
Winemakers from Moldova, Romania and Bulgaria came together for a two-day teleconference entitled “Common borders. Common solutions” to address the most relevant subjects, exchange knowledge and learn new development strategies.
The WINET “Trade and Innovation in the Wine Industry” project, which was initiated a year ago by the Invest Moldova Agency with the EU’s financial support and with the participation of the Back Sea Basin Crossborder Cooperation Program, stages in Moldova its first Cross-Border Conference. The conference will feature plenary and presentation panels, networking, and meetings between wine sector representatives and public and private stakeholders. The goal is to bring together various international top speakers from the wine industry to emphasize the importance of the wine history, which started in the Black Sea Basin area many years ago.
● FRIDAY, September 17
Andrei Spînu: Contract for supply of gas should not be political issue
There are no preconditions for not extending the contract for the supply of gas between MoldovaGaz and Gazprom, while the opposition’s speculations that the citizens will get frozen in winter are unfounded, said Deputy Prime Minister Andrei Spînu, Minister of Infrastructure and Regional Development. According to the official, the supply of gas should not be a political subject and remains the prerogative of MoldovaGaz, which already negotiates the new contract with Gazprom. Andrei Spînu said the previous experience when political factors became involved in the negotiations with Gazprom didn’t bring results as the final price is determined according to a fixed calculation formula. The relationship between MoldovaGaz and Gazprom is strictly commercial in character. “In 2016-2017, when we know who the President was, I think Moldova paid the highest price for gas. The supply of gas should not be a political issue. It should be a subject of national interest based on commercial relations between two companies, MoldovaGaz and Gazprom. It is the responsibility of MoldovaGaz to negotiate the contract. There are no risks as to the extension of the contract. At the end of August, an agreement was reached between MoldovaGaz and Gazprom. The contract was sent to the director of Gazprom for signing. The contract will be signed and transmitted to NAER for determining the tariff,” the official stated in the talk show “Emphasis on Today” on TVR Moldova channel.
Public hearings on bill to amend law on games of chance
The Parliament’s commission on economy, budget and finance has announced public hearings on a bill to amend the law on games of chance and the law on advertising. The hearings will take place in the Parliament Building on September 21, starting at 10:30am. A bill to extend the legal provisions cornering the banning of advertisements for all the categories of games of chance was registered in Parliament by a group of MPs of the Party of Action and Solidarity. The ban will cover lotteries, bets at competitions and sporting events and other forms of services in the field of games of chance, including online ones. According to the authors of the bill, the given games of chance are as noxious and cause dependence alongside the other games of chance, such as casino games and slot and other machines, even if these are classed as games of chance with a low social risk.
● SATURDAY, September 18
Law on oil products market criticized by experts and ex-MPs
The amendments made to the law on the oil products market are in favor of three-four companies that hold the monopoly on the market and were adopted in collusion with representatives of these monopolists. Moreover, the law was passed to encourage the big ‘sharks’ operating on the oil market destroy small oil companies. The opinions were stated in a TV program in the context of the chain rises in fuel prices witnessed in the recent period. According to economic expert Veaceslav Ioniță, the amendments made by the PAS parliamentary majority to the law on the oil products market does not encourage healthy competition. Moreover, the daily changes in prices posted on boards at filling stations is illogical as the large oil companies import oil products much more seldom. “What NAER does represents protection for the monopolists. We have several monopolists that were authorized to import and we have a multitude of small companies that have to buy from monopolists. In this country of monopolists, they are allowed to do what they want as their hands were untied, while the small oil companies are regulated. Moldova was attracted into this casino when we have to daily wait for the tariffs. What is the connection between the current Platts quotation and the current tariff if oil sellers imported the oil products ten days ago?” Veaceslav Ioniță stated in the talk show “Friday with Anatolie Golea” on RTR Moldova channel.
Government shifts responsibility for negotiating contract with Gazprom onto MoldovaGaz, opinions
The Government should become involved in the negotiations with Gazprom and should try and obtain an advantageous price for the Republic of Moldova, said political commentators according to whom the executive’s strategy to shift full responsibility onto MoldovaGaz is incorrect. On the other hand, the representatives of the power admit that the purchase price of gas this year will be higher, while the Government’s responsibility is to offer the citizens with low incomes compensations so that the new heat tariffs do not fully unbalance their budget. Representatives of the power admit that the heat tariffs this year will be higher and this is inevitable amid constant rises on the international market. “If we look at the energy problem all over the world, we do not see good news. This is the reality and this is what we should expect. The question is what the Government does for the most vulnerable ones, how the gap in the budget of each vulnerable family will be compensated so that they do not feel these rises so painfully. But we cannot influence the world market. We can raise the pensions and salaries,” PAS MP Dumitru Alaiba stated in the talk show “Ghețu Asks” on TV8 channel.
NBM: Moldova’s financial system in 2020 showed resilience
The financial system of the Republic of Moldova in 2020 showed resilience, the economic and social conditions influenced by the effects of the COVID-19 pandemic being characterized by nonuniform evolutions and materialization of risks within the economic segments of the Republic of Moldova. According to the National Bank of Moldova’s financial stability report for 2020, the nonbank lending sector tempered its expansion evolution in all the subcomponents. Even if the interest rates applied by banks witnessed nonuniform evolutions, the bank interest margin increased. Despite all the challenges witnessed in the analyzed period, the banking sector continued to have a satisfactory performance, maintaining its solid positions of profitability and solvability, noted the NBM. According to the report, amid the unfavorable economic context and the restrictions related to the COVID-19 pandemic, the bank’s loan portfolio maintained the growth pace. The non-performing loans decreased in value primarily due to the growth of the whole portfolio. The credit risk continued to represent the most significant threat to the stability of the banking sector.
PAS suggests 6% VAT rate for hospitality industry as from October 1
A legislative proposal drafted by the Party of Action and Solidary envisions the reduction of the VAT rate on accommodation services and on food products and drinks, except for alcoholic beverages, for business entities operating in the hospitality industry to 6%. The authors suggest implementing the new provisions as from October 1 this year. According to the bill authors, the proposal was worked out following the multiple restrictions imposed on different activities where the providers suffered huge losses that resulted in reduced pays, fewer jobs or even bankruptcy. In April, Parliament adopted an organic law providing that a VAT rate of 6% will be applied to the hospitality industry during the state of emergency and the public health emergency. The given law is to take effect in six months of the publication of the fiscal policy laws.