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Economy

30 NGOs of Moldova condemn the capital liberalization law for “upsetting anti-corruption efforts and discouraging honest taxpayers”

30 civil organizations launched a call to the Parliament, Government, society and development partners of Moldova, criticizing the legislative initiatives 451 and 452, the so-called “capital liberalization” and “fiscal stimulation” laws.

The NGOs condemn the insufficient discussion on the possible impact of these laws, being highly concerned about the total amnesty of persons, especially public officials, who got in their possession goods and properties in illegal ways. The civil society representatives argue that, since the priority of Filip Government seems to be anti-corruption fight, the initiatives 451 and 452 would reduce to zero the efficiency of integrity package recently approved by the Parliament and the respective integrity checks, but would also allow corrupt officials to keep their positions, while the honest taxpayers and other officials would be discouraged.

The authors of the appeal draw the attention that the fiscal and capital amnesty during 2007-2008 caused a 4 billion lei lack in the state budget, causing further schemes of theft and dilapidation between 2012 and 2016 like the concession of Chișinău airport and the banking laundromat.

The new laws authored by five deputies of the Parliament of Moldova proposes to install a state of liberalization of capital and fiscal stimulation for persons to declare capital that they previously hid or attributed to other persons. Moreover, the enterprises would be exempted from paying penalties, fees and unpaid taxes. Everything in exchange for a 2% tax.

Currently studying International Relations at the University of Pécs, Hungary. Study focus: Transnistrian conflict settlement, Moldovan statehood, Moldovan democracy. Inquiries at [email protected]

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Economy

Moldova Government increases guaranteed minimum wage to 2610 Lei ($157)

25 April 2018- The Government of Moldova adopted a decision to increase the guaranteed minimum wage in the real economy by 230 lei (approx. 14 USD) up to 2610 lei (approx. 157 USD). The change is expected to enter into force from 1 May 2018.

Thus, the workers in the real sectors of the economy will not receive less than 15,44 Moldovan lei (0,93 USD) for an hour of labor, compared to the current 14,09 lei- 2380 lei monthly.

In 2017, the prices increased by 6,6%, while the productivity growth rate was 3%- a 9,6% salary increase is put up.

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Economy

Moldova buys 69 Russian GAZ ambulances

24 April 2018- The Moldovan Center for Urgent Medical Assistance announced about the delivery of 10 ambulances bought last year from the Russian GAZ. Other 50 GAZ ambulances are expected to be delivered until the end of May.

The 69 ambulances will be distributed in 32 urgent medical centers, where the ambulances are 90% overused. The Center claims that the GAZ Sobol ambulances, costing 740 thousand lei each, comply with the international standards and the technical equipment allows a high level of medical assistance.

The seller of the ambulances was a Moldovan firm residing in Coșnița, Dubăsari district. According to Mold-Street, the ambulances were produced at the GAZ factory, which belongs to Basel group (Basic Element), controlled by the Russian oligarch Oleg Deripaska. The latter is subject to the US sanctions due to his alleged involvement in the President Trump campaign manager Paul Manafort’s collusion with Russian officials during the 2016 elections. There are also “allegations that Deripaska bribed a government official, ordered the murder of a businessman and had links to a Russian organized crime group” (NPR).

Some claim that this would mean that the Moldovan Government is a collaborator of Deripaska.

Facing criticisms about GAZ’s quality, State Secretary Boris Gîlcă declared that he was too skeptical about the quality, but then was later convinced that “things changed”:

“Things changed, there are quality cars, well equipped, at an extremely good price, the best price, which probably was the criteria for the listing”, says Gîlcă, quoted by Unimedia. Gîlcă says that only 60 ambulances were bought from the public listing, but then 9 were delivered as part of “very tough negotiations”.

For 2018, the Government of Moldova allocated 273 million lei for buying other 168 ambulances: 35 intensive therapy units and 133 regular ambulances.

In 2017, urgent medical assistance was offered to approximately 868 thousand people.

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Economy

Study: Corruption in Moldova’s public procurement yearly costs up to 3 billion Lei

Source: Iurie Morcotilo, Expert-Grup

11 April 2018- An analytical commentary by Iurie Morcotilo states that the corruption in public procurement costs Moldova up to 3 billion Lei (183,24 million USD).

The study is based on the official data on the estimated full cost of public procurement from 2008 till 2015. The main factors cited as causes stimulating corruption in public procurement are lack of transparency, the complexity of the procurement process, but also the misinterpretation of the public budget as something abstract, not as money from the taxpayers. The corruption in public procurements are believed to happen at different stages: planning, procurement launching, evaluation and contract awarding, contract implementation stage.

Though Morcotilo recognizes that quantifying corruption is hard in this field, the study views some indicators from Moldova’s ranking in the Global Competitiveness Report: embezzlement of public funds, favoritism in governmental decisions, informal bribes and payments, and inefficiency of public spending.

The costs of corruption in public procurement was also calculated based on the estimated international average of 20-25% of the total amount of public procurement. In Moldova’s case, the 25% quota was reasonably applied, even if the statistical data on public procurement are lacking (only big contracts are counted for stats). The study found that between 1,3% and 2,5% of Moldova’s GDP are lost to corruption in public procurement:

“Based on the available data and applying the 25% average percentage of the corruption cost in public procurement, it can be estimated that in 2015 this cost varied from MDL 1.6 billion to MDL 3 billion, which represents between 1.3% and 2.5% of GDP”, reads the study.

Of course, those are only monetary costs. Other consequences are:

  • long-term financial losses for the public budget;
  • negative impact on health and safety of population;
  • negative effects on competition.

The author opinionates that the corruption in public procurement can be reduced only by joint efforts of the authorities fighting corruption and those responsible for procurement management, but also by enhanced monitoring by citizens.

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