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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.

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

Economy

“State secret”: Finance Ministry refuses to publish EU letter “appreciating Moldova’s progress” on €100 mln. pact

22 May 2018- Newsmaker.md was refused by the Finance Ministry to obtain a copy of the letter of the European Commission on the fulfillment of the first 10 priority actions, necessary for disbursement of the €100 million fund.

Signed by Finance Minister Octavian Armașu, the refusal letter explains to Newsmaker that the letter contains information that is subject to the “state secret” protection due to the national security risks of publishing it.

In March 2018, Armașu declared that the letter from the DG ECFIN (European Commission) appreciated the efforts of the Moldovan authorities on the fulfillment of the first 10 (28, in total) conditions from the agreement on the 100 million euros macro-financial assistance.

This “appreciating” letter was then requested by the Chișinău-based Center for Policy and Reforms (CPR Moldova), but the request was refused on the claim that NGOs cannot request information from the state institutions. Now, CPR Moldova is suing the Finance Ministry for violating the access to information laws, suggesting that an NGO is nothing but an association of individuals, which should freely access information of public interest. Moreover, CPR is asking the Ministry to present a copy of the report on the implementation of the first 10 conditions for the disbursement of the first tranche of those 100 million euros.


On 23 November 2017, the Republic of Moldova signed the agreement with the European Union regarding the macro-financial assistance of 100 million euros: 40 million of grants and 60 million as a loan. The so-called MFA was requested in August 2015 and in March 2016 by the Moldovan authorities. After long debates on the conditionality, the European Parliament, and the EU Council came to an agreement to offer Moldova the macro-financial assistance for 2 years and a half in three tranches, whose disbursement is conditioned by a certain list of criteria. According to the agreement, the European Commission will monitor the progress on key reforms together with the International Monetary Fund.

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Economy

Moldova Automotive Days, automotive components and suppliers forum, to take place on 29-30 May

Moldova Automotive Days, the automotive components and suppliers forum, will take place on 29-30 May, at the Tekwill center.

Moldova Automotive Days 2018 is the leading industry event aimed to gather all industry stakeholders, including government, business, multinationals, professionals and academia, to discuss trends and challenges facing the automotive components industry regionally and in the country, set the premises for sustainable entrepreneurship environment to foster sector development and attract investment.

According to the organizers, the Moldovan Government and the Moldovan Investment and Export Promotion Organization, the goal of the event is to develop an international annual platform for national and international stakeholders, public, private entities, international partners and diplomatic staff for promoting the potential of the Moldovan automotive components sector worldwide.

Registration is already open for participating at the Moldova Automotive Days. Check the agenda and list of speakers here.

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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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