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Is Chișinău becoming a global tech centre? A synthesis of the IT activity in Moldova

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From San Francisco to Hong Kong, all over the globe, the information technology is flourishing. Everyday, new software and devices are invented, and new tech centres are built. Among the IT global giants, there is a small city that is still at the beginning of its way – Chișinău, Republic of Moldova.

According to the IDC CEMA research, Republic of Moldova has all the competitive advantages for placing its IT products and services on the international market. Moldova has geographical proximity and cultural compatibility with the western and eastern Europe, visa liberalisation, highly qualified human resources, tax benefits, a developed infrastructure in the Information and Communication Sector, low costs for business launching and developing, as well as relatively low human resources costs, and the government support in attracting new investments in the IT sector.

Macroeconomic importance

The analysis made by the Directorate of Economic Policy and Business of the Ministry of Economy and Infrastructure indicates that the Information and Communication Technology sector (ICT) registers the highest growth in the last 8 years and becomes more and more attractive for the investors. In 2018, it reached a share of 6.6% of the country’s GDP and is steadily in a rising trend.

Within the event “PIN Awards 2018” that took place in April at Iași, Romania, 500 IT companies registered in Republic of Moldova were reported. These companies hire more than 12500 employees and have a turnover of around 152 million dollars in total.

The entrepreneurial environment

Nowadays, it is way easier and more accessible for the Moldovan entrepreneurs to develop a tech startup business. In comparison to 2010, when startups were established merely on the own expense and risk of the founders, today more and more possibilities of applying for financing and assistance from outside the company appeared. For instance, there is Business Angels Moldova – a company that offers funding of up to 25000 EUR, mentorship, legal support and free space for the startup’s activity in return to 15% of the business.

In the Republic of Moldova, several startup accelerator programs (Founder institute, Startup Academy, Dreamups), training programs (Tekwill Academy), hubs and coworking spaces for freelancers, startups, IT companies, NGOs and investors (Generator Hub, IHub, Dreamups, Digital Park, Tekwill) are being developed. Therefore, the number of the IT projects and events has raised as well (Ignite Chișinău, Chișinău Startup Week, Startup Weekend, Startup Weekend Woman, Techvillage, etc.)

Photo source: locals.md

In the last years, more than 50 startup companies were founded in Moldova, among the most active startups being Diez, Paynet, Privesc.eu, Planable, Lobster, XOR, Vintage, Retently, etc.

At the initiative of the Moldovan Association of Information and Communications Technology Companies (MAICTC) and with the support of the Competitiveness Project, the first IT park – Moldova IT Park was launched at the beginning of this year. The Moldova IT Park comes in an innovative form – the park is only a virtual entity, the resident companies working directly from their offices. It is considered one of the most important IT initiatives in the country, as the activity of the IT park is enforced by a promulgated law (the law nr. 77/2016 and the Government decision 1144/2017). One of the stipulated legal conditions says that the employees of the IT park have to be engaged in at least one of the following activities: software development, software editing, computer games development, computing technologies, servers and IT solutions, data processing, web site management or IT consultancy.

Until September 2018, 250 companies that perform their activities in IT have already obtained the resident status of the IT park, as reported by a national news portal. “The main scope of the IT park is designing an organisational platform that enables and facilitates the information technology industry development, creating new jobs and attracting local and foreign investments”, as the Ministry of Economy and Infrastructure press service announced.

Tacit Knowledge is one of the Moldova IT Park residents since February 2018. “We were very happy to discover that the concept of IT park was implemented in Moldova. We would like to retain our human talents and we consider that the provided mechanisms of facilitating the business management through the IT parks would represent an important incentive to the growth of the IT engineers’ number and persons that choose to follow an IT career”, declares Vadim Echim, the Tacit Knowledge CEO, for diez.md.

IT legislative Benefits

The Republic of Moldova has created through its legislation several important benefits for the entrepreneurs and workers in the Information Technologies sector. In order to promote the foreign investments, the process of obtaining work permits and visas for foreign citizens wishing to undertake IT activity in the Republic of Moldova was facilitated. Therefore, according to the law amendments, the specialists that work in an IT park can obtain a long-term visa for a period of maximum 12 months with one or multiple entries. Afterwards, they can apply for a permanent residence permit without meeting any special requirements like owning property, speaking the Romanian language or having previously a temporary residence permit of 3 to 5 years with proof of income.

As it is stated in the current law, the tax benefits for the residents of the Moldova IT Park include a 7% single tax on corporate income that is not lower than 30% of the average monthly wage, calculated per employee. The same ratio applies for the income tax on salary, social security and medical contributions payable by employees and employers, local taxes, real estate tax, and tax for the use of roads by motor vehicles registered in the Republic of Moldova. Moreover, an improved and simplified tax administration mechanism and access to a direct and effective dialogue with state authorities were provided.

Photo Source: Facebook| Startup Academy

Through a single 7% tax, it is intended to reduce the phenomenon of paying salaries under the table. Sergiu Voitovschii, the Moldova IT Park administrator, mentions in an interview for Bizlaw that “The entrepreneurs that are members of the IT park have the possibility to pay higher salaries as compared to the standard tax rate.” There are already several registered companies with foreign capital and joint ventures. Therefore, the Moldova IT Park is viewed as an opportunity for foreign investors as well.

External cooperation

Moldova is seen by foreign companies as an IT nearshoring or offshoring destination. The MAICTC catalogue includes more than 30 foreign companies that carry out their activity in the hardware and software development, as well as telecommunications. Among them are some global leaders like Allied Testing, Endava, HP, Intel corporation, Pentalog and PWC. Some of the foreign companies have settled their offices in Chișinău, some of them established partnerships and joint ventures with the local companies, and others contracted companies from Moldova for outsourcing a part of their activity.

Education

At the national level, more than 20 educational institutions offer courses related to IT and STEM (Science, Technology, Engineering, Mathematics), out of which 11 universities, 4 training centres and 3 vocational schools.

Beside the public institutions, there are some nonconventional educational forms such as trainings organised by the IT companies, online trainings, IT Academies, Summer Schools for pupils and mentorship provided within the accelerator programs.

Photo source: Facebook| Startup Weekend

Challenges

Even though the IT sector in Republic of Moldova is in a continuous advancement, there are still some problems. The most stringent one is the insufficient number of qualified IT engineers. Companies on the local market are ready to hire at least 1000 new specialists every year, whereas only a half of the labour demand is covered. The main reason for such a low labour supply is the small number of students that graduate the Moldovan universities. Last year, the number of registered students at the IT specialisations of the Technical University of Moldova reached 3800 candidates, out of which only 15% are still studying. Others chose another specialisation or left the country.

“Moldova became an attractive tech centre. If the local companies had enough IT specialists, they would be able to engage in 50% more projects than they do at the moment”, mentions Eugene Galamaga, the director of the Allied Testing company. Because of the limited choice of experienced professionals, companies have become more flexible when hiring new employees. They turn towards students and try to inform them about the skills and abilities one should have in order to be hired. “For 4 years already, we organise an internship program for students. In such a way, we prepare the future employees and we make them a job offer afterwards”, points out Vadim Echim, the Tacit Knowledge CEO.

Some foreign employers went further and founded training programs for their future and current employees. It is the case of Endava that launched the program “Endava University”, offering trainings in the universities lead by the Endava mentors, trainings inside the company for developing the technical and soft skills. They also organise teambuilding, career coaching and offer extra-wage benefits for their employees.

As a solution for the stated problems, IT employers asked the government to create incentives for increasing the number of students that graduate in technical specialisations and to invest more in the IT education. “No local or foreign investor will have the opportunity to develop on a market where human resources are lacking”, Eugene Galamaga says.

Thus, the Republic of Moldova is still far from being named a global tech centre, but with the proper measures and common effort of the companies, IT community and the government, it has the potential of becoming a developed IT arena, at least at the regional level.

Featured image source: Facebook|Startup Academy

Jurnalistă that speaks English very well. De aia Maria are grijă că prietenii noștri străini să nu piardă nicio informație valoroasă despre actualitatea din Moldova.

Society

Women from the left bank of the Dniester

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The village of Doroțcaia is located on the eastern side of the Dniester River, near a border crossing point installed by Transnistrian separatists back in 1992. The village, that was a battlefield during the Transnistrian war and went through gunfire and dropped bombs, is the home for 3038 inhabitants nowadays, according to the 2014 census.

“It used to be quiet in the morning. We worked until noon, after which we ran home when bombs and gunshots began to sound throughout the village. We were sleeping in cellars and were afraid that we might not wake up the next day,” revealed Nina Diordiev, a resident of the village that is now under the control of Chisinau authorities.

Most of the local agricultural lands are on the side controlled by Transnistrian authorities. That means people can’t get to their lands without presenting their identity card. Many times the separatists did not allow the locals to reach their lands, which caused them great losses. However, people said that the situation has improved since August 2018 and now they can reach their lands safely.

Doroțcaia is a sun-kissed place, cooled by the wind coming from the Dniester and inundated in flowers’ fragrance. The village has well-kept streets, a museum with centuries-old objects, a beautifully renovated cultural centre and many smiling people.

In Doroțcaia, there are 1560 women (51.3% of the total population). This article paints some of their portraits:

 Eugenia

Eugenia Berzan has been the artistic coordinator of the cultural centre since 2011. Back then, she returned from France with her whole family. She managed to organise many concerts, while introducing modern concepts. Eugenia is the screenwriter, organiser of events and the one who stays behind the curtain and makes sure that everything works perfectly. Although she likes her job, Eugenia still thinks about moving to another country after her daughters graduate from high school. “To have a better future,” as she says.

Mădălina

Mădălina Nicolaev is 8 years old and she really likes football. In time, boys had to accept her in their team. She likes to play so much that often she loses the track of time.

“My father told me that if I played so much, I would faint and fall. So I stay home until 4 p.m., after which I run to the stadium,” she said. Mădălina remembers that her mother wanted her to go to dance lessons, but she chose football.

“Don’t ask me how many times I’ve already changed soccer balls. You don’t want to know…”

Galina

Galina Leașco is a former agronomist. She spends the whole day in the greenhouse where big and flavourful tomatoes grow. Galina also has rabbits, chickens and takes care of her large garden with flowers, trees and vegetables. She is a member of the Nistrenii Folk Ensemble and a woman that always laughs, even if her eyes are full of tears, as she confesses.

Before he died, her husband had been suffering from different illnesses for 20 years. The last years were the hardest times. After a stroke, he started to have epilepsy seizures. “I always had to be by his side, but I couldn’t just stay at home, because I also had to support our three children,” Galina recalled.  She used to take him to her job during the day, and she was staying up all night. In order to make the sleepless nights easier, she began to buy and read love novels and detectives, which are now gathered in a personal library.

Angel’s star

Beside a folk ensemble, a dance troupe and a marching band, there is a a band of five 18-year-old girls called Angel’s Star in Doroțcaia. The band was formed about 5 years ago.

“I was in the 6th or 7th grade when I joined the band. It was already formed, but it still didn’t have a name and they said they needed a drummer,” said Ana, band’s drummer. The girls are the winners of international contests, doing the rehearsals in a small room of the cultural centre. The room has the walls covered with red carpets, for a better sound.

Maria

You can find the house of Maria Crocmazan amid flowers. She has a colourful and fragrant garden, which she takes care of every morning and evening, when the sun does not burn so hard. “In the morning, before work, I go to see them, talk to them and ‘rebuke’ the weed,” confessed Maria, who works as head of village’s warehouse for agricultural goods. Half of her life, she was surrounded by flowers. Maria has always loved them, planted and took care of them.

In Maria’s garden, one can find over 100 rose bushes. She says that the best gift for her is a new flower bud, for which she would choose a place in her garden. Since 2013, Maria has been living in the house she bought from the former mayor of the locality – a hardworking person who built houses, a stadium, a cultural centre, a museum, schools, and an oil mill in the village.

Nina

Nina Diordiev works as a secretary at the mayor’s office. She told us that, during the ’92 conflict, she had to come to work, issue reports and send building materials to people whose houses had been destroyed by bombs.

“It was awful. You never knew what was coming”

Nina use to say that during the summer there is no time for rest. After work, she has to work the land. “People rest during the winter,” she said.

Elena

Elena Toderiță is responsible for cleaning at the town hall and sings in the Nistrenii Folk Ensemble along with other 20 members. At least, that’s what she did until the pandemic. For the past four months, she has been singing in the kitchen. “Before, we used to say we don’t have much time, but now we want to get together,” she claimed.

Aunt Hana

Ana Gherlac is a 77-year-old woman who is also called Aunt Hana by villagers. Her whole life was marked by two wars. “I worked my entire life, but I was left with nothing,” she said. You can meet her at 8 o’clock in the morning on the way home, after she went twice to work her lands. Even if it’s hot outside and this weakens her body, her yard is kept in good order. Previously, Aunt Hana had three cows. Now, she has chickens and geese.

“I didn’t sleep at night. I cleaned, cooked, so that during the day I could go to work”

It’s getting harder now. That day, she couldn’t bring home her groceries bag from the store. “I walked a little and got down. Luckily, I met some villagers and they helped me,” Aunt Hana confessed. In 1992, a bomb fell on her house’s barn and shattered it. Her lungs were damaged when she tried to put out the fire.

This article was made with the support of the National Endowment for Democracy.

This text is a translation. The original article here.

Photo: Dionis Nicolai and Tatiana Beghiu

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Politics

The effect of Russia’s constitutional changes on the Transnistrian region

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A nationwide referendum is held in the Russian Federation between June 25 and July 1 in order to amend the constitution of the country.

Due to the coronavirus pandemic, the opportunity to vote during several days was provided. The voting process is held outside and, in addition, contactless voting at home, electronic voting and voting using the Mobile Voter mechanism are available.

In the Transnistrian region, voting was allowed for three days, from June 28-30, the whole process being organised under similar conditions as in Russia, the Tass News Agency announced.

According to a survey conducted at 800 Russian polling stations from June 25 to June 28, the majority of voters opted for the amendments, 23.6% opposed them and 0.4% invalidated the ballot paper,

Beside the amendment offering the possibility of prolonging the presidential term of Vladimir Putin (until 2036 instead of 2024), there are a a few controversial amendments to the Russian fundamental law.

Source: Facebook| The Center for the Study of the Transnistrian Conflict Consequences

Russian federal territories

One of the most important articles of the Constitution of the Russian Federation that could be amended is article no. 67,  which provides for creation of federal territories in Russia and introduction of the expression “subjects of the Russian Federation”.

“By making this change, Putin wants to make sure that certain federal subjects do not leave the Russian Federation, such as Chechnya, Tatarstan or Crimea, the latter being illegally occupied by the Russian Federation. The territory of the Republic of Moldova doesn’t belong to  the Russian Federation. However, taking into consideration the priorities that President Dodon and socialist have, one could draw a parallel.

During the propagandist Moscow parade, Putin mentioned in his speech that all neighbours ‘are part of the Russian world’. Moldova, according to Vladimir Putin, is part of his strategic interest. The fact that 11% of the Moldova’s territory is hosting occupation troops proves it one more time,” said security policy expert Rosian Vasiloi.

Previously, President Igor Dodon claimed that federalisation is the only solution to solving conflicts in the Republic of Moldova, including the Transnistrian one.

Source: Facebook| The Center for the Study of the Transnistrian Conflict Consequences

Russia as the legal successor to the Soviet Union

In the same article, a paragraph was introduced, saying that the Russian Federation is the legal successor of the Soviet Union. Another amending paragraph states that the Russian Federation honours the memory of the “Fatherland’s defenders” and ensures the protection of historical truth. “The diminution of the importance of the act of heroism in the defence of the Fatherland is not allowed.”

Historian Andrei Cusco mentioned that the victory in World War II is a myth that represented the main pillar of the regime’s ideology after Putin came to power in 2000. “Russia has taken certain moments from the Soviet communist narrative and reinterpreted them to serve the interests and visions of the current regime,” Cusco said.

The Criminal Code of the Russian Federation prohibits the dissemination of information that expresses a clear disrespect regarding the days of military glory and memorable dates in Russia related to the defence of the Fatherland, as Meduza informed.

A good example is the reaction of the Embassy of the Russian Federation in the Republic of Moldova to the TVR Moldova declaration that June 22, 1941 was the day when Romania entered the World War II to liberate the Russian-occupied lands in the summer of 1940. “For Romanians, this date went down in history as the day of starting the fight for the reunification of the nation. The President of the Republic of Moldova, Igor Dodon, is not of the same opinion, as he stated that today is the day when the occupation of Bessarabia began,” it is said in the article.

The Embassy of the Russian Federation qualified the material as “uncivilised and extremely dangerous, because it justifies the war criminals.”

“Such tricks offend most Russian citizens who remember the common heroism of the Red Army that saved Europe from the Nazi plague.”

The perfect Russian child

One more completion to the constitution refers to children education, namely patriotism, citizenship and respect for the elderly.

The same approach existed during the USSR, when the principles of a very cultured man were considered love for the socialist homeland, friendship, companionship, humanity, honour, love for socialist work, etc.

 Marriage of a man and a woman

Another newly introduced amendment provides for the protection of the family, maternity, paternity and childhood, defending the institution of marriage as a union of a man and a woman, creating the conditions for a decent upbringing of children in a family, as well as for the fulfilment of the obligation to take care of parents.

Yet, another video promoting the amendment of the constitution promotes homophobia as well.

Crime against Russians

The Russian journalist Vladimir Pozner believes that the way of voting the amendments is not democratic. “There are many proposed amendments. Among them, there are those that I would be willing to support, but there are those that I am against of. Unfortunately, everything is organized in such a way, that either you order the entire dinner or none of the dishes,” he said.

Liubov Sobol, a Russian politician and lawyer at the Anticorruption Foundation, claimed that resetting Putin’s mandates to zero is a crime against Russians. “20 years were enough to implement all the reforms needed for our country. We saw that Putin failed. Corruption is flourishing in the country, we have a low level of education. There must be a change of power, and all eligible candidates must be allowed to run for president. People have to make a choice.”

This text is a translation. The original article here.

Photo: Facebook| The Center for the Study of the Transnistrian Conflict Consequences

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Environment

A natural water cycle? The floodwater dangers that are neglected in Moldova

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Due to heavy rains in Ukraine, Romania and the Republic of Moldova, the employees of the General Inspectorate for Emergency Situations (GIES) were working during the entire week to eliminate the consequences of the floods in the whole country.

The water level in the Dniester River increased by up to 3.5 m in some northern localities, while the State Hydrometeorological Service forecasted further increases of water level by July 2. Therefore, residents were evacuated from the villages at risk of flooding both from the Dniester and the Prut riverbeds, cleaning works were performed, protection dams were build or fortified, according to a note of the Government of Moldova.

However, beside the problem of flooded households and farmlands, there is also a critical ecological problem. Moldova is still a country with a limited access to centralised sewerage systems. The majority of population (especially in rural areas) still use an improvised toilet placed in the yard (latrine). Moreover, there are still localities in Moldova with no access to a centralised water supply systems, the water from local reservoirs being consumed. The floodwater accelerates the transfer of dangerous pollutants from various sources of pollution (including latrines) to the water that gets in the supply systems or local wells.

Source: gov.md

No water supply systems

According to the National Bureau of Statistics (NBS) data, 81.8% of population  had access to the public water supply service in 2019. 53 cities and 724 rural localities had access to the public water supply system in the last year, which represented only 50.7% of the country’s localities.

About 51% of Moldovan villages do not have access to drinking water supply from public systems.

The localities from Chisinau (88.6%) and Gagauzia (78.1%) have the highest level of connection to the public water supply network. The lowest level is recorded in the North (35.5%). The water is usually captured from surface sources – 64.6%, from underground sources – 25.5%, or from other sources – 9.9%, informed the NBS.

Floods can lead to a higher risk of running out of drinking water for all localities in the Prut and the Dniester riverbeds, which do not have access to centralised water supply systems. Moreover, even those that do have access to such systems risk to drink contaminated water, if the water is captured from sources that came in contact with floodwater.

The National Agency for Public Health (NAPH) reported high levels of non-compliance of  the water from local wells, concerning both chemical and microbiological parameters. “This situation is determined by the lack of centralised sewerage systems, unsanitary conditions, the location of latrines and landfills in the immediate vicinity of wells,” noted the agency.

It also warned that the contaminated water from wells need to be pumped out and walls need to be cleaned in case if floods. When the water in the natural reservoirs is back it needs to be disinfected and tested. The question is how many flooded localities from Moldova respect the NAPH recommendations.

Source: gov.md

No sewerage systems

reportage of Moldova.org disclosed that seven out of ten households in the Republic of Moldova do not have a toilet in the house. On average, 21 out of 30 people use a latrine.

Only 126 out of 1682 localities have sewerage systems and only 73 of them have functional sewage treatment plants. Without a sewage treatment plant, wastewater reaches the soil and rivers, causing serious pollution.

Only 7.6% of Moldovan localities are provided with public sewerage system (95.0% of cities and 4.4% of rural localities).

The highest share of localities with access to the public sewerage system is registered in the capital city area (71.4%) and Gagauzia (15.6%), while the localities in the South and North have almost no access to such systems ( 5.4% and 4.7%), said the official NBS data for 2019.

Only a few localities from Moldova have access to decentralised sewerage systems with attached treatment plants and there are rare cases of households where home treatment plants attached to the individual sewerage system are built.

“In the 21st century, latrines must go down in history,” claimed the NAPH. In case the improvised toilets, built in the yards, are flooded, that could cause a real ecological catastrophe.

No sewage treatment plants

The rivers in the Republic of Moldova are highly polluted due to sewage that is discharged in rivers, as the National Environmental Center (NEC) warned. “The level of pollution and degradation of rivers is so high that we risk causing irreversible damage to the environment, which in turn endangers human life,” said the NEC representatives.

In 2019, 97.15% of the total volume of wastewater discharged in the central sewerage system was treated, as the national statistics reported. While in big cities this share was 99.55%, only 26% of the wastewater was treated in small villages. Let’s not forget also that only 4.4% of the rural localities in Moldova are provided with centralised sewerage system. That means that the biggest quantity of discharged wastewater in rural areas doesn’t reach sewerage systems and national statistics’ reports.

The polluted wastewater gets to the surface and underground waters and from there back to the water supply sources. Floodwater drastically worsens the situation, as even more pollutants reach the water Moldovans drink or use in agriculture.

Photo: gov.md

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