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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.

Economy

The Moldovan fruit farmers’ paradox – anybody can produce but only few chosen can sell

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The Republic of Moldova is an agrarian country. The most important agricultural activities in Moldova – the production of walnuts, grapes and some other fruits is, though, squeezed between the political interests and the weak regulations regarding export monopolies establishment and preference of imported products on the internal market. The small Moldovan farms remain outside the big business, being marginalized, misinformed and discriminated when it comes to selling their products inside or outside the Republic of Moldova.

The official data

During a press release of the National Office of Vine and Wine in Moldova, it was communicated that the 2017-2018 season recorded the earliest grapes harvest in the last 40 years. At the same time, the grapes production was 15% higher compared to the average of the last 8 years. According to the National Bureau of Statistics (NBS), in the period January-June 2018, the grape exports from the Republic of Moldova increased by 32.1% compared to the same period of 2017. Moldova exported grapes to Romania – 51.9% of the total export, the Russian Federation – 35% and Belarus – 3.7%.

The National Agency for Food Safety (NAFS) announced a raise in 2018 of  the production and export of Moldovan fruits such as apples, plums, peaches, apricots and cherries.  According to the provided data, 70.6 thousand tons of apples from 2018 year’s harvest were exported, that being three times more than in the same period of 2017. A significant increase was also recorded in the export of plums – 31 thousand tons of plums have reached the foreign markets. The NAFS talked about the export of fruits to the usual for Moldova international markets, such as the Russian market, and discovering new markets such as Iraq and Bangladesh.

The European Business Association reported a quantity of 10 thousand tons of walnuts, exported by 30 companies entitled to do the exports to France Germany or Austria. There are 29,000 hectares of walnut trees in the Republic of Moldova. In 2017, the walnuts production was 18.7 thousand tons. The main countries where the Moldovan walnuts are exported are the EU countries, Ukraine, Turkey and Russia.

Behind the curtain

Several journalistic investigations performed by few independent media institutions from Moldova, such as Ziarul de Gardă and Jurnal TV, have uncovered the ties between certain family members of the former Prime Minister of Moldova – Pavel Filip, and several companies that have an important role on the walnuts and dried fruits markets. The investigations were launched after the allegations of existing a personal interest of the former Prime Minister in maintaining a monopolistic situation on the walnuts market. While checking  the reason of a dramatic decrease of walnuts selling price on the market, the journalists have found a scheme of collecting and centralizing of walnut production by few collector firms that transported them afterwards to “Monicol” SRL – a company owned by father of the Filip’s daughter-in-law. The company has a market share of about 20% and the government’s protection in their activity. The allegations were denied by Pavel Filip, but no financial information regarding the company’s activity was made public.

Svetlana Lungu, the Head of Plant Protection and Health Directorate of NAFS, explained that the process of obtaining the necessary papers for exporting walnuts is not so hard. “In the EU, the requirements are minimal. Namely, it is necessary to obtain the phytosanitary certificate for the export of products of plant origin. The registration of the exporter and the producer is required by NAFS, as well as owning or renting a storage space by the exporter and signing a contract with the producer,” declared Lungu. Therefore, as long as the process is standardized, why the Moldovan walnuts are officially exported by only 30 companies and a monopoly is established on the market unofficially? Maybe because there are some political and personal interests of ‘filtering’ the companies authorized to export.

Walnuts exporting is a profitable business in Moldova. According to TV8, one kilogram of Moldovan walnuts costs 23.94 euro on the Belgian store shelves (about 462 lei). In Moldova, one kilogram of walnuts could reach 150/200 lei on the market, but from producers it is bought for 60/80 lei per kilogram.

The situation for the grapes and fruits producers is not much better. Few weeks ago, a campaign was initiated by a grapes’ producer, Diana Crudu, that advised people not to buy flowers for the International Women’s Day, but a box of grapes or apples.

“There are over 7 thousand tons of grapes in the  Moldovan warehouses. If they are not sold in the next two or three weeks, these grapes will have to be thrown away. The wine factories do not have the capacity to process and storage such a large quantity of grapes. This is the most dramatic situation faced by table grape manufacturers in the last 15 years,” said Diana in an interview for RFE/RL.

The producers are forced to sell the grapes on the local market for 3 to 6 lei per kilogram. At the same time, consumers are offered the possibility to buy imported grapes for 80 lei per kilogram in the Moldovan supermarkets.

The Ministry of Agriculture representative, Iurie Mudrea, declared that no compensation for unsold products can be provided. “The business always involves risk. Calculate, my dear, solve the problem, think about it at the beginning of year, put some efforts. Even Russia no longer accepts low quality, we need high quality for all products. Here we have to start: big volumes, high level of quality and a lot of effort,” declared Mudrea for TV8.

The Ministry of Agriculture claimed that apples could be purchased directly from producers and distributed free of charge in schools. At the same time, the “qualitative and nicely packed” apples could be sold in the country’s retail shops, and the fruit quality monitoring infrastructure could be developed. A lot of things could be done. But will they?

The real solution came from Moldovan people. An event organized by the Klumea Association encouraged Moldovan people to become  solidary with the grapes’ producers and come on Sunday, February 24th, at a bazaar in the city centre of Chisinau to buy a box of domestic grapes, with only 5 lei per kilogram.  The initiative has a suggestive name: ‘Take Moldova home’.

Source: Facebook

Featured photo: worldpulse.com

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Culture

Moldova will participate in “Expo Dubai 2020”. The pavilion of our country, divided into four areas: “Discover, Taste, Craft and Invest”

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The Republic of Moldova will participate in the World Expo Dubai 2020 Exhibition. According to the concept, our country’s pavilion will be divided into four key areas: “Discover, Taste, Craft and Invest”.

The Ministry of Economy and Infrastructure announces that visitors will be able to explore the history of our legendary wine, learn about national, cultural, historical values.

At the same time, “Expo Dubai 2020” represents an opportunity to intensify trade, economic, scientific and technological exchanges with other states and companies.

It is an event where new outlets for domestic products will be identified. At the same time, visitors will know about investment projects that might be of interest to business people around the world.

According to organizers’ estimates, “Expo Dubai 2020” will be visited by about 25 million people around the world.

“The International Exhibition Center” Moldexpo “, designated as responsible for the organization of our country’s participation in this event, must make every effort and respect the established terms. We must make ourselves seen and heard as a state with investment, tourism and cultural potential, “the official said.

The World Expo (World Expo) is the third largest event in the world with an economic, social and cultural impact, and is held every five years, with a duration of 6 months. The Republic of Moldova has previously participated in such events, including in Hanover, Germany (2005), Shanghai, the People’s Republic of China (2010) and Milan, Italy (2015).

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Economy

The energy and investment sector of Moldova, discussed in the the United States

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On his second day in the United States of America, State Secretary for Economic Affairs, Vitalie Iurcu, discussed the Moldovan-American cooperation in the commercial-economic field, with an emphasis on energy.

During the meeting with the Republican congressman in the state of Texas, Jodey Arrington, the two exchanged views on developments in the Moldovan energy sector. At the same time, the State Secretary of the Ministry of Economy and Infrastructure received support from US officials, reiterating interest in the energy security projects of our country. Moreover, during the meeting, invitations were exchanged for subsequent visits to Chisinau and Washington DC.

State Secretary and President of the Moldovan-American Business Council, Steve Nicandros, welcomed the Moldovan-American ascendant dynamics, especially the commercial-economic cooperation and the intensification of the B2B dialogue. The interlocutors agreed to maintain working contacts in order to identify new areas of cooperation on the economic branch and to promote bilateral investments in the key sectors of the national economy, including the energy sector.

The officials further attended the meeting with representatives of the business community in Houston, Texas. Vitalie Iurcu presented the advantageous investment field of the Republic of Moldova and urged investors in Houston to explore ways to collaborate with our country.

Reminder: Moldova participated in the first ministerial meeting of the Partnership for Transatlantic Energy Cooperation and the Investment Forum in Houston, United States of America.

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