Moldova & IMF IMF Activities Publications Press Releases

Limba romana                                                                         Russian

InfoMarket.MD News Agency, issue 26.03.2004


Comment of the "InfoMarket.MD"

    The ball is in Moldova's government court

    This standpoint is adhered to by the Head of the IMF Mission Marta Castello-Branco who worked in the republic from March 17 through March 24. It is also the confirmation of the “new policy” in relations of the IMF and the Government presented at the turn of the last year. Then, the Fund’s representative David Owen said the IMF was ready to show larger flexibility on condition that Moldova will propose such measures that will deserve the Fund’s trust in the Economic Growth and Poverty Reduction Strategy (EGPRS) elaborated by it.

    The goal of the Fund experts’ present visit was to evaluate the progress achieved in the EGPRS elaboration process. The Mission also examined the republic’s macroeconomic indicators, the Government’s economic policy, the tax and pension reforms, the labor remuneration policy and the situation with the external debt service.

    As a result of the work done, the Mission confirmed existence of the economic growth in Moldova and the lack of the stagnation in the economy talked about by some economic experts at the beginning of the year. At the same time, “the economy is still very weak, and is mostly based on the growth of consumption but not production”, Marta Castello-Branco believes. As it is known, it is not the precondition of the stable growth. The Fund’s experts also marked the very slow speed of the structural reforms and even the return processes started in some branches. At the same time, the Mission’s Head said the policy that has been carried out by the country’s authorities lately goes contrary to the spirit of the Strategy elaborated by them. Among the points of this policy, Marta Castello-Branco marked the introduction of a number of restrictions for production export, authorities’ attempts to control prices, to introduce monopoly in some branches limiting the free competition in the market.

    Marta Castello-Branco reminded that the IMF expects from the republic’s leadership not only the statements but also the concrete actions stipulated in the EGPRS. She said the Strategy in the last variant is a “very good document” containing clear goals and tasks, however, the Fund and the Government haven’t agreed about the measures for their achievement yet. Earlier, the Fund expected from the government realization of measures aimed at the corruption level reduction, creation of favorable conditions for entrepreneurs and reduction of the state’s interference in their activity.

    Judging by the fact that the similar demands were voiced this time too, no compromises were found in this matter. And the IMF, as it is known, won’t start the negotiations about the new program of Moldova’s crediting until it is sure that the republic changed the course of its economic policy.

    Although, Moldova may receive a part of donors’ funds for implementation of the EGPRS without the economic program with the IMF available. The Government plans to attract some $500 mln. However, the most part of donors doesn’t have an opportunity to carry out its own monitoring of the situation in the republic and orients on the evaluation of the IMF. And, of course, without this program, we shouldn’t hope for receiving the funds for covering the budget deficit. So, it is better to be friends with the Fund in this respect.

    On the whole, the Fund intends to continue the dialogue with the republic and the IMF experts will continue monitoring the economic situation in the country and the Government’s actions. As one of the confirmations of this statement, arrival of 5-6 technical missions of the Fund that will analyze the Moldovan legislation is expected in the near future. As for the rest, everything, as usually, depends on the country’s leadership.