Alexandru Fală: Human capital crisis in public sector is main constraint on Moldova’s development

The shortage of human resources in the public sector is the main constraint on Moldova’s development. The current government realized this and in 2023 will lay greater emphasis on the rise in salaries in the public sector, Alexandru Fală, program director at the Independent Think Tank “Expert-Grup”, stated in a public debate hosted by IPN News Agency.

Alexandru Fală said the authorities in 2023 will devote special attention to the maintaining and augmentation of the population’s incomes.

“In 2023, the state will try to support the population’s incomes and will pay increased attention to the raising of salaries in the public sector. The state will try to positively influence the population’s incomes. I don’t know yet if it will manage to ensure real growth so that the population’s incomes are higher than the rise in the purchasing power. The budget law says it clearly that the salaries in the public sector will be raised and this is very important,” said Fală.

The expert also said that the increase in the incomes of public sector employees is a key element for maintaining and attracting skilled human resources to state institutions.

“The shortage of human capital in the public sector is the main constraint on the development of the Republic of Moldova. In the public sector, we do not manage to attract skillful persons, while those who have potential and knowledge do not remain in the public sector. We are late in presenting and designing the budgetary policy also because there are no persons who would deal with this,” stated Alexandru Fala.

According to the expert, the planned pay raises will not be covered at the expense of the economic growth as a budget deficit of about 19 billion lei was projected for 2023.

“It is estimated that the national budget revenues will total 100 billion lei, while the costs – 119 billion lei. Respectively, the budget deficit will be about 19 billion lei. This is a very large budget deficit, of US$1 billion. A period when we will have budget deficits larger than 3% of the Gross Domestic Product will follow. This is a lot, but the situation is not dramatic. The budget deficits turn into debts. The public debt will grow, but this is now not so large,” explained the program director of “Expert-Grup”.

Alexandru Fala noted that at the end of 2021, the Republic of Moldova had a public debt of about 33%. During the next few years, the public debt will not exceed 40%. “It is large, but not dramatic. The public debt should not exceed 60% as increased attention is devoted to this indicator in the European integration process,” he stated

The public debate entitled “Budgetary-fiscal policy and budget for 2023: form and content in approach” was the 270th installment of IPN’s project “Developing Political Culture through Public Debates” that is supported by the Hanns Seidel Foundation.

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