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2017: EU almost equals CIS at individual money transfers to Moldova

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Structure of net transfers of funds from abroad to individuals by geographic areas, 2017 %, Source: bnm.md

The National Bank of Moldova (NBM) published the report on the individual money transfers from abroad to Moldova in 2017. NBM reports that around 1199 million USD were sent to individuals in Moldova.

Some 85,2% of the money was transferred via money remittance systems (USD, EUR or RUB). The currency structure of money transfers (recalculated in USD) was as follows: USD – 570,54 million, EUR – 522,37 million, RUB – 94,40 million and other currencies – 12,66 million.

The National Bank noticed a continuation of the downward trend of transfers from the CIS countries, while the EU transfers increased by 20,3% compared to 2016.

Dynamics of transfers from CIS and EU in to of individuals (2012 – 2017 annual dynamics; 2017 monthly dynamics), %

Money transfers from other states (except for the CIS and the EU) totaled 30,7 percent in 2017:

Structure of net transfers of funds from abroad to individuals by geographic areas, 2017 %, bnm.md

96,2% of the CIS transfers originated in Russia.

Within the money transfers from the EU countries, Italy accounts for the largest share of 34,9 percent, being followed by the United Kingdom (14,0 percent), Germany (13,9 percent), France (8,1 percent), Spain (3,3 percent), Ireland (3,0 percent), Poland (2,8 percent), Czech Republic (2,6 percent), Portugal (2,5 percent), Romania (2,4 percent), Belgium (2,1 percent), Cyprus (1,8 percent) and Greece (1,3 percent).

Moldovan remittances still heavily rely on the Russian market: 402,63 million USD (or 33,6% of money transfers) originated in Russia. Other leading remittance sources are: Israel – 17,1 percent (205,02 million), Italy – 12,0 percent (143,83 million), the USA – 7,9 percent  (95,13 million), United Kingdom – 4,8 percent (57,88 million), Germany – 4,8 percent (57,56 million), France – 2,8 percent (33,60 million), Turkey – 1,3 percent (15,30 million) , Spain – 1,1 percent (13,74 million), Ireland – 1,0 percent (12,31 million).

Dynamics of money transfers (top three states) to individuals (2012 – 2017 annual; 2017 monthly), %, Source: bnm.md

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

Economy

About 17 tons of Moldovan apples arrived in Dubai, in perfect condition

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After 24 days of traveling by sea, about 17 tons of Moldovan apples, produced in the orchards of the Fresh Time Producers Group, have arrived in perfect condition in Dubai.

The apple quality was confirmed by the USAID / APM Expert, that checked the apple bundle, stating that they were as firm, succulent and tasty as when harvested.

According to the Performance Agricultural Project in Moldova, their quality is due to the advanced technologies of applied and post-harvest production (sorting, storage, packaging).

The experience of shipping Fresh Time Marine Apricots on the Middle East market is extremely relevant for developing an efficient Moldovan export model on this market.

The USAID / APM project monitored each stage, including temperature and air humidity recording equipment installed in the container, which recorded the temperature of the fruit during transport from the exporter to the recipient.

Consumers in the Middle East are awaiting new batches of fruit coming from the Republic of Moldova.

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Economy

Republic of Moldova has sharply reduced its fruit exports to Russia

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According to EastFruit analysts, despite the record harvest of apples and plums, Moldova has sharply reduced its exports to Russia in September 2018 compared to the same month last year. Apple exports dropped by 42%, from 27.2 to 15.8 thousand tons. However, this volume exceeded the number of apples exported in September 2016, when exports reached 13.4 thousand tons.

Starting with the third week of November, Moldova still has record plum stocks in cold stores. In September, its exports to Russia amounted to 9.3 thousand tons and were 6% lower compared to the same month last year.

Meanwhile, mass grape exports declined further, by 23.4%, to 3 thousand tons, compared to the same month last year when 3.9 thousand tons of table grapes were delivered from Moldova in Russia.

The offer of Moldovan peaches and nectarines in Russia has decreased almost five times, from 527 tons to 113 tons. Moldova’s pear exports to Russia rose slightly, so in September 2018, 177 tonnes of pears were exported.

In September 2018, Moldova became the eighth biggest fruit supplier of the Russian Federation, receiving revenues of 14.5 million dollars, 23.5% less than in September 2017. The share of fruit exports in Russia declined from 6.3% in September 2017 to 5% in September 2018. And if in 2017 Moldova ranks fourth in this ranking, in 2018 the country was overtaken by China, Azerbaijan, Uzbekistan, and Argentine.

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The ‘radiography’ of the business climate: Now is the time to invest in Moldova

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Under the conditions of a limited domestic market, the growth and diversification of exports are the actions the Republic of Moldova should undertake to significantly improve living standards for current and future generations. And the exports, in turn, are directly influenced by the volume of investments. It is the ascertainment found in the National Strategy for Investing and Exporting Exports for the years 2016-2020 and which is being implemented by the current government with firm steps. Today our country meets the investors’ requirements by offering a set of concrete tools, competitive at the regional level and having a direct impact on improving the business climate as a whole.

International specialized charts also reflect the stability of the national economy and business-friendly legislation. The Republic of Moldova ranks 47th out of 190 countries included in the World Bank Group rankings of the business environment, ahead of neighboring countries Romania and Ukraine. According to Doing Business 2019, Moldova has reached high positions in “starting a business” (14) and “property registration” (22). Currently it only takes 1 day and 4 formalities to register a company.

Last year, our country ranked 6th in the world in terms of the number of jobs created in relation to the population, at the same time being remarked as the newest emerging investment destination, according to the Global Location Trends Report 2017.

The transformation of the Republic of Moldova into an increasingly attractive destination for foreign investors is the result of a series of reforms and government policies implemented over the last few years.

Their goal is to make the most of our country’s advantageous geographical position, as well as its access to a market of about 800 million potential consumers – the result of the conclusion of 43 free trade agreements with EU, CIS and Asian countries. The results were not long in coming: in 2017 the value of Moldovan exports amounted to US $2.5 billion, a 19% increase over the 2016 indicators. In the first nine months of 2018, this indicator has already exceeded $2 billion. Export distribution has also reconfigured: more than two-thirds of goods are exported to the European Union (70%).

A positive development was registered in the 7 Free Economic Zones. Since the beginning of 2018, sales of industrial goods, produced within the FEZs, increased by 68% compared to the previous year, reaching $384 million.

“The Government of the Republic of Moldova is making important efforts to create an attractive business climate to stimulate investments. We are aware that investments generate new economic activities and have the ultimate goal of obtaining the goods and services indispensable to a viable and prosperous economy, that is why attracting foreign capital and promoting exports is our strategic priority. By concluding new free trade agreements at regional and international level, by reducing fiscal pressure, by creating preferential conditions for residents within the FEZs, IT and Industrial Parks, we aim to make the most of the country’s potential as a natural transit point between East and West, to consolidate a growth model based on the development of goods and services exporting industries.”

In particular, the reforms implemented by the Government focused on reducing the burden of taxes and bureaucracy. Today, Moldova has one of the most competitive tax systems in the region with a Corporate Income Tax of 10% for HoReCa, 6% for residents of the Free Economic Zone and a 7% single tax for IT Park residents. When it comes to “Social Insurance Contributions”, our country has the most competitive rate in the region – 18%. The number of organs with control functions has been reduced by 70%, and economic agents need 300 less permissive documents to develop their businesses legally. Since July 2018, through the Automated Information System which operates as a “Unique Counter”, the business environment is able to get the necessary documents online.

Entrepreneurs who meet certain conditions can get subsidies for newly created jobs – the Government offers them 40,000 lei for every 100+1 new job. According to the estimates by the Ministry of Economy and Infrastructure, over the next two years Moldova will attract a net investment flow of 380 million USD and 10 thousand jobs will be created. The Moldovan Investment Agency is the governmental structure directly responsible for the implementation of the National Strategy for Investment Attraction and Export Promotion for 2016-2020.

“Due to the fact that the Government has undertaken to implement a series of ambitious reforms aimed at improving the investment climate, we have several good reasons to say that Moldova has the potential to attract but also to maintain and develop direct foreign investment. The latter would allow local companies to transition to activities generating greater added value and would provide opportunities to integrate into the value chains of the global economy. The new team of the Agency will strengthen its efforts to develop and promote a brand of Moldova as an investment destination – InvestMoldova – with distinct visual identity, supported by competitive opportunities in all sectors identified as strategic for the national economy. When using promotional tools such as economic diplomacy, B2B and B2G business missions, roundtables, forums and international exhibitions, we will focus on relevance, efficiency and results. In the long term, we aim to offer complete support to entrepreneurs who are committed to manage serious and transparent business in Moldova, to bring innovations, to create attractive jobs and to ensure competitive production.”

The unprecedented opening of the Government of Moldovan to investors will be discussed during the most important economic event in the country – “Moldova Business Week 2018” – to be held from 27 to 29 November in Chisinau.

Oer 1,500 investors, financiers, importers and exporters from the Republic of Moldova and 30 other countries will learn firsthand about the investment potential of the seven strategic sectors of the national economy: Energy, Infrastructure, Automotive and Electronics, Agriculture and Food Industry, Information and Communication Technology, Tourism and Light Industry. More than 75 speakers, including representatives of the Government of Moldova, ambassadors, representatives of foreign strategic partners, local companies, as well as special guests, will elucidate the competitive advantages of the sectors, current investment opportunities and state policies to support investment.

The event cannot be missed by those who want to internationalize their business, to be aware of new trends in approaching external partnerships, to identify new customers and markets, to adopt new models of business success and new solutions to everyday challenges.

The access to the conference is free of charge for all guests, based on prior online registration on www.mbw.md.

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