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Economy

Where will the Republic of Moldova take its necessary supply of natural gas from?

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The natural gas transit contract signed between Ukraine and the Russian Federation (through which the Republic of Moldova receives its supply of natural gas) expires at the end of 2019. The two countries didn’t reach yet any new agreement. Therefore, starting from January 1st, 2020, Moldova risks being left without natural gas and electricity. While experts and parliamentary opposition signal the possible energy crisis, authorities try to think of feasible alternatives.

Switch solution no. 1

The first proposed alternative is to transport the Russian gas through the trans-Balkan corridor (that passes over Turkey, Bulgaria, Romania and Ukraine). Moldovagaz, the company in charge with natural gas distribution on the country’s territory posted an official statement saying: “Moldova is ready to receive reverse flow gas through the trans-Balkan corridor. […] According to the contract’s supplement (regarding the term extension of the gas supply for the period 2020-2022), the available gas transport capacities in Bulgaria and Romania will be contracted between December 16th and 20th,” the statement said.

The Minister of Economy and Infrastructure (MEI), Anatol Usatîi, confirmed that the operators of gas systems in the Republic of Moldova and Ukraine will sign next week an agreement for gas delivery through the trans-Balkan corridor. Meanwhile, Moldova is continuing negotiations with operators from Romania and Bulgaria.

“From the technical point of view, everything is already solved. Yesterday, the meeting of gas transport operators was held in Brussels, being attended by operators from all countries, which are included in the trans-Balkan corridor, including Bulgaria, Romania and the Republic of Moldova. The volumes were confirmed – at least 15 million cubic meters per day, which is the absolute maximum required for Moldova. These will be provided through the trans-Balkan corridor,”  claimed Anatol Usatîi during a press conference.

The companies Moldovagaz, Moldovatransgaz and Tiraspoltransgaz carried out the reconstruction works of the main pipeline on the territory of Moldova to ensure the conditions for the reception of natural gas in reverse mode through the Căușeni Gas Measuring Station.

At the same time, the Minister of Economy still hopes that Ukraine and Russia will reach an agreement and the Russian natural gas will be delivered using the regular corridor.

Switch solution no. 2

While the Minister of Economy and Infrastructures assured everything is prepared for the gas transit through the trans-Balkan corridor, the Prime Minister of Moldova, Ion Chicu, announced another scenario, according to which in case Ukraine and Russia will not reach an agreement on gas transit, Ukraine will supply Moldova with natural gas.

“Yesterday, we discussed the backup scenarios in Kiev, including the provision of gas in reverse mode. […] Ukraine has assured us that it is ready to supply Moldova with natural gas and electricity, after January 1st, 2020, if no alternative of gas supply works,” Chicu said.

However, the prime minister did not announce what is the gas supplier, the natural gas price, the payment conditions and if there are any contracts ready to be signed with the gas supplier and with Ukrainian transport operator.

The emergency solution

The Government of Moldova decided to sign an agreement between Moldova and the European Bank for Reconstruction and Development (EBRD) on “The emergency gas procurement instrument” . It is, basically, a financing instrument of up to $50 million implemented only at the request of the Republic of Moldova for purchasing a reserve of up to 400 million cubic meters of natural gas on the Ukrainian and/or the EU market. It could be used only if Moldovagaz notifies about the impossibility of providing gas supply services.

Prime Minister Ion Chicu and EBRD General Director for Eastern Europe and Caucasus, Matteo Patrone, signing the common agreement| source: gov.md

“We used this financial mechanism to complete the set of alternative solutions for natural gas supply to consumers in the Republic of Moldova, in the case of an exceptional situation, which does not depend on the decisions of the Government. We are grateful to the EBRD for this help and I am absolutely sure that the number of projects carried out in our country with the support of the EBRD, as well as other external partners, will increase in the coming period,” stated Ion Chicu.

On the other hand, former prime minister of the Republic of Moldova, Maia Sandu, claimed that the loan of 50 million dollars offered by the EBRD for the purpose of supplying natural gas misses important details and accused the current government of non-transparency.

“We discussed this topic with the European Bank. I am curious to see what the interest rate is, because this is definitely higher than the interest paid to the European Union Bank or to the Romanian credit. We considered this option very expensive.[…] After leaving the Government, the talks with Romania and Ukraine to use the reverse gas flow to the south were blocked in the tripartite formula. No one tells us the loan conditions as they would pay for it out of their own pocket. The citizens of Moldova will have to pay for it,” the former prime minister said.

**

Even though authorities try to come up with solutions for this complicated situation, the energy experts from Moldova are very worried and still have a lot of questions regarding the multilateral agreements that need to be reached in the case of trans-Balkan corridor (between Turkey, Bulgaria, Romania, Ukraine and Moldova), the existence of contracts with any natural gas supplier and transporter in the case of supplying the gas from Ukraine, the adjustment of natural gas prices, the transportation contracts, the payment conditions and the transparency of the total cost and feasibility of each alternative. “Moldova is the only country in Europe that will suffer, meaning it could literally freeze this winter, because we, unlike other countries, do not yet have any alternative to the gas delivered through Ukraine,” claimed the energy expert Sergiu Tofilat.

Photo: sputnik.md

Important

EU official: “It’s been a long time we’ve been patient. We will judge the Government’s actions objectively.”

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Director for Russia, Eastern partnership, Central Asia and OSCE, and Deputy Managing Director for Europe and Central Asia at the European External Action Service (EEAS), Luc Pierre Devigne, paid a visit to Chișinău today to participate in the 5th meeting of the EU-Moldova Association Committee.

He addressed a message to the Moldovan government during a press conference, criticising the way the reforms were implemented in the country, especially the way the famous bank fraud from Moldova, called also “the theft of the century” was investigated. Devigne considers inadmissible the fact that, after five years, the persons and companies that were involved in the fraud were not held accountable.

“It is unacceptable that after the theft of the billion was uncovered and deeply investigated by a leading financial investigation team – the Kroll company, whose findings were made publicly available, the investigation was still not finalised on various pretexts. We cannot believe that it is legally not possible to prosecute such a fraud.[…] It is the responsibility of the Government to ensure that justice works in the country. We want to see an open and transparent process that includes not only the Government, but also the consultation of opposition, civil society and the EU institutions recommendations.” said Devigne.

The EU official told the Moldovan politicians: “It’s time for actions. It’s been a long time we’ve been supportive, we’ve been patient. Now, we will judge the Government’s actions objectively.”

“The EU has always supported the Republic of Moldova, but the EU cannot substitute for good governance and the actions that should be taken by the Government. Our support is not unconditional.”

He said that European assistance will depend on how laws and democratic standards will be respected in Moldova. Particularly, Luc Pierre Devigne mentioned that the Republic of Moldova should join the Anticorruption Network for an effective fight against corruption, strengthen independent media and improve the quality of life in the case of the Moldovan citizens.

Luc Pierre Devigne also referred to the subject of the Citizenship by Investment Law, on which the Government applied a moratorium, but only until February 24, 2020. The official was disappointed that people who obtained such kind of citizenship remained anonymous. “We do not see this as compatible with a serious and secure visa liberalisation regime. It’s a security issue.” highlighted Devigne.

One of the central messages of the EU delegation to Moldova concerned the importance of boosting the cooperation between Moldova and the community bloc.

At the same time, the Moldovan authorities reiterated their commitment to comply with the recommendations of international organisations such as the OSCE and the Venice Commission, and to ensure public consultations on major projects.

Photo: cotidianul.md

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Economy

Global Talent Competitiveness Index: Moldova when it comes to Artificial Intelligence

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The 7th edition of the Global Talent Competitiveness Index (GTCI) addressed the topic Global Talent in the Age of Artificial Intelligence. The index is used to rank 132 national economies, across all groups of income and levels of development, that representing 97% of the world’s GDP and 94% of its population. The report referred, first of all, to the level of innovation and technology development, exploring how the development of Artificial Intelligence (AI) is not only changing the nature of work but also forcing a re-evaluation of workplace practices, corporate structures and innovation ecosystems.

This year, Moldova ranked 86th out of 132 analysed economies, being ranked behind the neighbouring countries such as Ukraine and Romania, which ranked 66th and 64th, respectively.

The countries that are best positioned to benefit from the AI revolution are also the most developed countries in the world, especially when it comes to the competitiveness and potential of attracting and training best professionals. Top ten countries in the ranking are Switzerland, the United States of America, Singapore, Sweden, Denmark, the Netherlands, Finland, Luxembourg, Norway and Australia.

New York, London, Singapore, San Francisco, Boston, Hong Kong, Paris, Tokyo, Los Angeles and Munich are among the most developed cities in this regard.

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source: insead.edu

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source: insead.edu

GTCI highlights

One of the most important observations made in the GTCI report for 2020 is that the gap between talent champions (almost all of them high-income countries) and the rest of the world is widening. Still, AI may provide significant opportunities for emerging countries to leapfrog.

The top of the GTCI rankings is still dominated by Europe, including the Nordic countries – a significant number of small high-income economies, many of them being either landlocked, island or quasi-island economies, including Switzerland (1st), Singapore (3rd), Luxembourg (8th), Iceland (14th) or Austria (17th).

According to the report, the key factor is developing relatively open socio-economic policies in which talent growth and management are central priorities in the age of AI.

Moldova

Moldova managed to get a score of 36.64, being ranked 86th out of 132 countries. It was classified as lower-middle income country and ranked 7th out of 32 countries included in this category. The country’s talent competitiveness index weakened as compared to the period between 2015-2017, when it was listed around the 61st position.

Moldova was evaluated with the highest scores for such aspects as gender development gap, ease of doing business, number of female graduates, competition intensity and political stability, while the lowest scores were given for its share of R&D expenditure, robot density, university ranking, number of registered researchers, scientific journal articles, labour productivity per employee, new business density and collaboration across organisations.

This year’s model of the GTCI index includes a total of 70 variables, up from 68 indicators used in the GTCI 2019.

source: insead.edu

Photo: cambridgealert.com

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Society

How corrupt Moldovan citizens are? Comparative figures

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When talking about corruption, most of Moldovan citizens blame the ‘system’ built by politicians and their political regimes throughout history. And that may be true, but only to some degree. When looking deeper, it can be actually observed that little corruption acts are perceived as a normality by a lot of individuals and legal entities in the country. That is what is shown in a recent study conducted by by the Center for Social Studies and Marketing “CBS – Research”. The study assessed the impact of the National Integrity and Anticorruption Strategy for the years 2017-2020.

 516 million lei – this is the total amount of bribes offered by Moldovans in 2019. On average, a Moldovan citizen has offered at least five bribes, while an enterprise has been involved in about three corruption acts. Businesses paid bribes worth 197,3 million lei, while individuals offered a total of 319,4 million lei as bribes during the last year, estimated the study. The value of the one illegal payment ranged from 50 to 20 thousand lei.

The research was carried out on the basis of a national survey where 1 120 persons, 506 companies and 606 civil servants from central, district and local public administration participated. The data were presented in comparison to the situation in 2017, when the first such survey was conducted. It was carried out within the project “Fight against corruption by strengthening integrity in the Republic of Moldova”, implemented by UNDP in collaboration with the National Anticorruption Center, and the support of the Norwegian Ministry of Foreign Affairs.

The total value of the bribes offered by Moldovans is lower, however, compared to those from two years ago, when the amounts varied between 100 and 500 thousand lei in the case of companies and between 50 lei and 8 thousand lei in the case of individuals, as the study stated.

Even though the study affirmed that corruption remains a serious problem for the Moldovan society, the level of intolerance of the population towards corruption has increased. Thus, about 62% of individuals (compared to 45% in 2017) and 83% of businesses (compared to 61% in 2017) consider any corruption situations unacceptable and declare that they do not accept to offer or receive bribes, regardless of the situation and implied personal benefit.

Moreover, both individuals (73% of respondents) and companies (80% of them) are aware that bribery entails punishment of both parties involved, and 87% of them, on average, would report the corruption acts to the anti-corruption agencies in the event of such a situation.

In the opinion of the civil servants participating in the survey, among the main causes of corruption are the low salaries in the public sector and the mentality of demanding and giving bribes in money and /or goods.

The same causes for corruption acts were emphasised by a survey conducted by Transparency International (TI) Moldova throughout the employees of 13 central public authorities. The survey results revealed that a quarter (24.6%) of civil servants who work in public institutions, and answered the survey, consider that their workplace is affected by corruption. More details about the survey can be found here.

Although the legislation obliges civil servants to report corruption cases and other abuses to the head of the public entity or to the responsible authority, a considerable part of the respondents (about 27%) are openly not willing to do it for reasons of personal security and lack of trust in empowered bodies, according to the TI-Moldova report.

Thus, the main factors that could determine the involvement of citizens in corruption abatement activities are the confidence that they will be protected if they denounce a public official for corruption acts, as well as the trust in the independence of the justice, showed the Center for Social Studies and Marketing study, as being reported by TV8.

“Committing acts of corruption must become non-profitable. But to drive forward those reforms, independent, effective, and incorruptible leaders of the judiciary and law enforcement bodies are urgently needed,” said Stanislav Pavlovschi, a Moldovan judge formerly at the European Court of Human Rights (ECHR), for the Global Voices portal.

In 2019, Moldova registered a score of 32 points for the Corruption Perception Index for 2019 released by Transparency International, being ranked 120th out of 180 countries. The score for Moldova worsened as compared to the 2018 year, when the country recorded 33 points, whereas improved when confronted to the data from 2017 – 31 points. More details here.

Photo: freepik.com

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