Moldova & IMF IMF Activities Publications Press Releases

                                                                          In Russian language

Weekly Newspaper "Chisinau Observer"

Thursday, June 19, 2003

Moldova has last chance to get IMF credit

Concluding the 2-week visit to Moldova, Deputy Director of the IMF`s European II Department and Mission Head Marta Costello-Branco said Moldova is facing the last opportunity to get the third credit in the framework of the IMF programme, which is due to expire by this year end. Without financial crediting, the Law on 2003 Budget will find itself on the brink of failure; however, the Moldovan government is still reluctant in regard to a set of issues it was called for to implement. IMF officials inquire about the third deferment of the tranch to the country. The IMF Mission could request the IMF Executive Board to extend the programme implementation for another year only at the September sitting of the board, providing the measures required from the government are adopted by July 21. A minor deferment will inevitably signal the end for the implementation. And the Mission will have to start negotiations anew. This will not break bilateral relations with Moldova - the IMF Bureau will continue its work in Chisinau and conduct annual consultations with the Moldovan government.

The chief conditions by the IMF listed the ratification of the Law on Budget and the Law on Budget of State Insurance advised by the IMF, the elimination of export restrictions and introduction of the pre-shipment inspection. Yesterday, the parliament commission for economy spoke negatively of a new bill on the pre-shipment inspection, which demands the inspection be conducted by only one company. The IMF said no competition is practical in this area. The bill was agreed on with the Fund officials already one month ago; however, it has been put in motion only recently. The date of its ratification will determine whether the Moldovan government will sign the contract with SGS rendering the service.

Mrs Castello- Branco said the Mission and top Moldovan officials agreed to step up efforts to improve entrepreneurial activity in the country, provide equal conditions for private businesses and ease state control over them. These issues were said to raise many questions among potential foreign investors and the "international community." Moldova is to decide whether it is moving towards the market economy or back to the old pattern, said Mrs Costello- Branco. Many of recently adopted state measures are likely to support the resurrection of the old economy. "In the market economy," said the Misssion Head, "businesses should have opportunities to make decisions independently."

Mrs Costello-Branco did not back the government`s intention to revoke taxation of imported production wheat given the presently chronic situation in the agricultural sector, for it will not resolve agricultural issues, which reappear annually. Under the provisions of this year`s limited state budget, any concession to the tax burden must accordingly expand the number of taxed economic agents and thus eliminate preferential terms.