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Economy

Moldova will receive a $70,000,000 loan from the World Bank

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The aim of the money is to increase electricity distribution capacity. According to a communiqué to the international institution mentioned above, the decision to grant the loan was approved yesterday by the World Bank Board of Directors.

A new high-voltage 400 kV line will be built from the WB money between Vulcanesti, in the south of Moldova and Chisinau. Also, the modernization and extension of substations in Chisinau and Vulcanesti are envisaged, as well as strengthening the energy transmission and metering system.

“The project will strengthen the capacity and reliability of local energy distribution in Moldova and will support the future interconnection of Moldova’s electricity system to the European electricity grid through Romania. This will be vital for the diversification of Moldova’s electricity supply, which will allow electricity to be supplied at competitive and transparent prices,” says the communiqué.

Over the last 27 years, the World Bank has granted the Republic of Moldova loans totaling over $1,000,000,000 for about 60 projects.

Currently, the World Bank portfolio includes ten active projects with a total commitment of $391.300,000. The areas of support include regulatory reform and business development, education, eGovernment, healthcare, agriculture, local roads, the environment, and others.

The commitment portfolio of the International Financial Corporation in Moldova includes five projects amounting to $17,000,000 (69% loans and 31% equity). The Multilateral Investment Guarantee Agency provided $95,000,000. Both institutions are members of the World Bank Group.

Diaspora

Record remittances sent to Moldova during the COVID-19 pandemic – expert’s explanation

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The remittances sent by Moldovans from abroad reached a record level in May 2020. The last time there was a larger amount of money transferred from abroad was only in October 2014.

The economic policy expert Veaceslav Ioniță believes that the significant increase is, paradoxically, due to the COVID-19 pandemic. According to his estimations, during the period of April-May, when there were quarantine and closed borders, Moldovan citizens could not bring into the country around $150 million. Part of this money were transferred through official transfer systems, that reducing the amount of unofficial transfers, is noted in the opinion published on the page of the Institute for Development and Social Initiatives (IDSI) “Viitorul”.

According to the expert, one third of all money from abroad are usually transferred to Moldova through informal ways, without using any official money transfer channels. “Each year, Moldovans receive almost $1.2 billion through official transfers, but also they sell on the foreign exchange market about $2.1 billion. The difference of 900 million dollars per year is the money that is introduced into the country through informal ways,” said the expert.

The total recorded transfers between April to May amounted $227 million, that being $14 million more than in 2019. At the same time, the foreign exchange sales during this period represented only 50% of the last year’s amount – $259 million. “April and May 2020 were the only two months in the history of transfers, when the money came almost exclusively through official channels. This explains this ‘miraculous’ growth,” concluded Veaceslav Ioniță.

The number of Moldovan citizens aged 15 and over who were working or were looking for a job abroad was 352 700 in 2018, according to the National Bureau of Statistics (NBS) data. That represented 35,68% of the total available workforce of the country in the same year.

People living in the Republic of Moldova, along with the whole economy of the country, are greatly dependant on the remittances sent by Moldovan citizens who live abroad. About 20% of all families with children in Moldova are supported by a family member who is a migrant. The concentration of such families in rural areas is three times higher than in urban areas, according to data from the NBS cited by the UNDP Moldova.

This money represent not only an important source of income for people living in Moldova, but also contribute to the increase of GDP nominal value. In 2018, the Republic of Moldova has been listed the 9th in a world ranking of remittances related to GDP, with a share of 16,1%, according to the World Bank data.

See also: Who? How? Where? Why? The migration profile of the Republic of Moldova

Due to the negative impact of COVID-19, remittances sent to Moldova are expected to decrease by 24-27% in the future, informed the UNDP Moldova. Decreasing remittance flows were predicted by the World Bank in the whole world. It was estimated that about 17% of all migrants have already stopped remitting to their families. In such a way, 23,4% of Moldovan households risk to be placed below the poverty line if they did not receive remittances.

Photo: Sharon McCutcheonUnsplash

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Important

The state of Public Health Emergency was prolonged until July 15. Restrictions that remain in place

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The National Extraordinary Public Health Commission (NEPHC) decided, on June 23, to extend the state of Public Health Emergency until July 15, taking into consideration that the epidemiological situation in the country is characterised by the confirmation of cluster cases (groups of cases over time, geographical location and/or joint exposure), as it is mentioned in the NEPHC decision.

The previously imposed restrictions will be maintained: groups of maximum three people in public spaces, meetings with the participation of maximum 50 people with a strict evidence of their identity, restricted access to public spaces of people aged 63 and over, no private events can be organised, as well as the activity of nightclubs, educational, cultural, sport centres, rest camps, treatment institutions remains blocked.

The access of foreign citizens and stateless persons is still forbidden on the territory of Moldova, with the following exceptions (established on May 15):

  • family members of the citizens of the Republic of Moldova;
  • persons holding a long-stay visa, a residence permit or a document equivalent to a residence permit issued by the authorities;
  • persons being on business trips, proved by a visa, residence permit or other equivalent document;
  • members of diplomatic missions and consular posts accredited in Republic of Moldova, of international organisations / missions, as well as members of their families or personnel who provide humanitarian aid;
  • passengers in transit, including those who are repatriated.

Persons who enter the Republic of Moldova during this period have to fill in an epidemiological form, as well as a declaration on their own responsibility to comply with the self-isolation regime of 14 days in determined places.

At the same time, the decision provides for the resumption, starting July 1, of all activities except the activities mentioned previously.

According to the most updated data provided by the Ministry of Health, Labour and Social Protection (MHLSP), there are 15 078 confirmed cases of the novel coronavirus in Moldova at the moment, including 8400 cases of people who recovered and 495 cases of death. On June 24, there were 364 newly confirmed cases, while the total number of taken tests reached 69 943 until June 23.

Photo: Romania Insider

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Important

Global Peace Index 2020: Is Moldova a peaceful and secure country?

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This year, the 14th edition of the Global Peace Index (GPI) Report was published. The index is world’s leading measure of global peacefulness, being produced by the Institute for Economics and Peace (IEP). Each year, it ranks 163 independent states and territories, including Moldova that, in 2020, was listed on the 71st position (score 1.95).

The 2020 GPI report showed that the world became less peaceful for the ninth time in the last 12 years. The overall scores describe a worsening situation regarding safety and security, as well as regarding ongoing conflicts, whereas an improved situation regarding militarisation. Such aspects as free flow of information, strength of economic conditions or equitable distribution of resources recorded a progress, while the global level of corruption deteriorated.

Iceland remained the most peaceful country in the world, as it has been since 2008, being followed by New Zealand, Austria, Portugal, and Denmark. On the other hand, Afghanistan ranked as the least peaceful country in the world for the second year in a row, next to Syria, Iraq, South Sudan and Yemen.

Moldova is among the top 5 countries in the world, when it comes to the militarisation domain, while being positioned in the middle of the list for societal safety and security, as well as for ongoing domestic and international conflicts.

Source: GPI 2020 Report

Generally, the GPI Report shows that the largest improvements have occurred in the militarisation domain – 113 countries reduced their armed forces rate, 100 reduced military expenditure as a percentage of GDP, and 67 lowered their levels of nuclear and heavy weapons.

The Republic of Moldova also has a leading position at the regional level (Russia and Eurasia) – being ranked the 2nd position after Kazakhstan. Generally, the Eurasia region recorded under 300 events from 2011 to 2018. A third of them (93 demonstrations and one strike) took place in Russia. The following 25% were in Ukraine (74 events occurring in 2014). Next, Moldova had 29 such events, all of them occurring since 2015. “Roughly 10 000 demonstrators in May of that year called on the government to advance reforms that would bring the country closer to the EU, including investigating $1 billion in missing funds,” is mentioned in the report.

Source: GPI 2020 Report

Europe had the largest number of protests, riots and strikes over the period with a total of 1600 events from 2011 to 2018. According to the GPI report, 65% of the civil unrest events in Europe were nonviolent.

At the same time, the economic cost of violence represents 5% of the total GDP in Moldova, with an absolute value of $1967 per capita.

In addition, this year’s report includes an analysis of the COVID-19 pandemic’s effect on positive peace (the attitudes, institutions and structures that create and sustain peaceful societies), while examining its economic consequences and which countries are best placed to recover from the shock.

“The 2020 GPI reveals a world in which the conflicts and crises that emerged in the past decade have begun to abate, only to be replaced with a new wave of tension and uncertainty as a result of the COVID-19 pandemic.”

The GPI report for 2020 stated that such epidemics and pandemics “tend to more heavily affect countries with low to medium socio-economic development.” Such factors as well-functioning Government (quickly enforcing border lock-downs, quarantine regimes,
isolation schemes, banning certain gatherings, etc.), a robust health system, high levels of human capital (good testing and treatment capacity), equitable distribution of resources, acceptance of the rights of others, sound business environment and low levels of corruption could be decisive when fighting against the COVID-19 pandemic and trying to diminish its severe economic impact.

For example, OCED countries with better functioning Governments and higher levels of human capital have been able to test a higher proportion of their population for the COVID-19 virus and to provide a better response, is also mentioned in the report.

Photo: reliefweb.int

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