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Trade Commissioner Malmström in Moldova: Our DCFTA is about the economy and trade, but also about improving the life of citizens

During 6-7 November, the EU Commissioner for Trade, Cecilia Malmström, made a significant visit to the Republic of Moldova. The visit is to mark the three years anniversary of the Deep and Comprehensive Free Trade Agreement (DCFTA) between the European Union and Moldova.

On November 6th, the Trade Commissioner met with the European Business Association and representatives of civil society to talk about the experience of Moldovan businesses in their expansion on the European market and their adaption to  the EU standards:

“I am positive that this will improve over time, as operators learn to know the EU market better and adapt their products to market requirements. Business promotion and improved marketing skills to enter the EU market are the right solutions. We already see that the number of Moldovan companies exporting to the EU is increasing every year.

Malmström believes that the DCFTA helps Moldovan people improve their lives by setting high other societal values:

”Our DCFTA is about the economy and trade of course, but it is also about improving the lives of citizens. Fundamentally, it is about shared values such as democracy, human rights, the rule of law, and the fight against corruption. It is very much a tool to bring our peoples together – that’s actually the best part.”

Several trade issues were touched upon during the meetings with the Prime-Minister Pavel Filip and Economy Minister Octavian Calmîc. During a briefing with the Commissioner, Filip thanked the EU for support in the implementing the standards needed for DCFTA and for the Moldovan businesses.

Cecilia Malmstrom at the meeting with Pavel Filip, Prime Minister of the Republic of Moldova. Chisinau, Republic of Moldova.

On the other hand, the Moldovan official asked for an extension of the deadline for the implementation of the DCFTA in the Transnistrian region, but also for an increase of the export quotas, motivating it with a significantly increased interest of Moldovan interest in the European market. The question of animal products exports was also reportedly discussed between Commissioner Malmström and Minister Calmîc. Later, both launched a new 1,9 million euro project to increase awareness of businesses and consumers about the advantages of the DCFTA from 2017 till August 2019.

Cecilia Malmstrom Peter Michalko and Octavian Calmic at Launch of the DCFTA Communication Project. Chisinau, Republic of Moldova.

In her dialogue with the Parliament speaker and majority leader Andrian Candu, the Trade Commissioner was told about the “improvements in the business and investment climate”.

Cecilia Malmstrom and Adrian Candu, president of the Parliament of the Republic of Moldova. Chisinau, Republic of Moldova. on November 6, 2017.

As for a model Moldovan business oriented towards EU, Malmström chose to visit the fruits and nuts processing factory Monicol, which reportedly exports 95% of its total production to the European market.

A less visible meeting was the one with the President Igor Dodon, more than often critical of the DCFTA and the Association Agreement, as a whole. Talking to the EU Commissioner, Dodon allegedly suggested that the DCFTA should be revised with the aim of an asymmetrical commercial regime. The Moldovan President claimed that the export of agricultural products has a low prospect on the EU market, while the share of agricultural exports to Russia and CIS states constitutes 70%. The press-release of Commissioner Malmström does not mention any detail on the talks with Dodon.

Malmström and Dodon

The EU is Moldova’s main trading partner, accounting for approximately 64% of exports and almost 50% of imports. The DCFTA provisionally entered into force in September 2014.


A Chinese company wants to expand in the Republic of Moldova

The Chinese company MCC International Incorporation Ltd. plans to launch investment projects in the Republic of Moldova. Priority projects for the Chinese company would be to modernize and develop road infrastructure, digital education, renewable energy, waste management, and drinking water resources.

Entrepreneur Zhang Ye, who is also vice president of the company, said that the project for building national roads and a photovoltaic park could be started by the end of this year or early 2019.

MCC International Incorporation Ltd. is the world’s top 10 contracting company, listed on Hong Kong and Shanghai stock exchanges, with over 75 branches and subsidiaries abroad and over 120,000 employees.

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For the first time, Moldovan apples will be exported to India

Apples from the Republic of Moldova will be exported to one of the largest markets in the world – India. Moreover, Moldovan apples will soon be exported to Israel. The first batch – a sample of 100 kg will be delivered for the necessary checks. At the same time, from October 1st, prosperous plums from the Republic of Moldova will be exported to Canada, a Government press release announced.

Fresh vegetables and vegetables from the Republic of Moldova are delivered annually in about 80 countries – for example, Moldovan grapes are exported to 20 states of the world, and plums – in 16 states.

Most Moldovan products are currently on the European Union market, with large increases in the markets in Germany, Italy, Portugal, the Baltic countries, the Czech Republic, Bosnia and Herzegovina, and Romania.

Thus, it is being examined whether there could be a possibility of exporting indigenous products to Vietnam, Egypt, Qatar, Bangladesh, and Indonesia.

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Getting citizenship for investments: is it good or bad?

Granting citizenship to the people having invested into the Moldovan economy is a form of passively capitalizing on Moldova’s status as an internationally recognized country. At the same time, luring investors through international forums and exhibitions, what does have a right to exist, has turned up being not so efficient and may not be viewed as an exclusive tool to interact with and attract foreign investments.

The Moldovan economy goes on feeding on remittances, as the exports – although up 38% (in January-February 2018) – are not capable though to unleash the overgrowth badly needed for the essential improvement of the living standard. Under these circumstances is or is not the program of granting citizenship for investments the panacea, the element able to miraculously boost the economic growth? Certainly, the answer is ‘no.’ The program can yield contingent effects, as raising the amount of direct foreign investment, as a substantial increase of the financial flows to Moldova and implicitly shaping the investment climate so much talked about for so long.

The Economy Ministry assesses an investment flow of about 1.3 bn euros, a difficult thing to assess as the program is launched for the first time and there is no any market response as to the Moldovan passport yet. Still there is a steady demand for such services on the international market: businesspeople having to migrate because of various reasons ask for a second citizenship. For example, according to a study carried out by CS Global Partners in the UK in 2017, about 89% of the British would like having a second citizenship, and about 34% made the effort to find out how such a one may be acquired.

Most countries do have programs of gaining investor visas or citizenship, what’s more these people are sought for in a tough luring competition. If suich countries as the USA, the UK or Switzerland but display the eligibility conditions, in Moldova’s case, this strategy won’t work because of competitive attractiveness of the Moldovan passport compared to the British or American ones, for instance. Hiring a company specialized in providing such services as Henley&Partners is highly increases the chances of attaining the program goals, given Henley&Partners’ experience in providing a wide range of services for potential applicants, but also its massive database of clients and potential applicants.

The risks implied and the critique targeting such programs of gaining citizenship through investments – hinting it’s an illegal scheme of money laundering – are detached from the real context such programs unfold in. First, these services are provided by companies often related to renowned consulting firms, which would incur reputational risks and would be liable to criminal investigation in many countries. Second, gaining one’s citizenship is a public act, your name becomes public what is not proper for “the strategies” used to launder money, which need interposed persons, shell companies and fake identities for short times. Third, as the campaign is going on at the national scale, were it a money laundering scheme, it would have immediately draw the attention of Moldova’s development partners: the USA, the EU, the IMF and other international financial entities.

And last but not least, all the applicants will be checked up by law-enforcing bodies and the Interpol, as the law provides for.

Roman Chircă, director of Market Economy Institute

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