Moldova

The Government of Moldova is seeking to change the country's development paradigm and build an export-oriented economy characterized by investment, innovation, and competitiveness,... Show More + following a decade of 'jobless growth'. This report focuses on improvements that will be needed to move Moldova to the next stage of development as envisioned in the Moldova 2020 strategy; however, reforms over the past decade also deserve acknowledgment. Improving the business environment is an especially important task, given Moldova's low levels of natural resources and small internal market. This study aims to identify the most pressing problems in the business environment that are adversely affecting Moldovan companies' productivity and competitiveness, and to present recommendations that would help remove these obstacles. The analysis is based on a review of existing reports; interviews with government officials, private sector associations, a sample of businesses, and some subject matter experts; as well as original research on access to finance. This study has identified that the following aspects of doing business are the most problematic: customs administration; tax administration; business regulation, consisting of licenses, authorizations, permits, and inspections; the competition framework; and access to finance. This report presents short-term (2013-2014) and longer-term (2015-2017) recommendations in each of the five priority areas. Show Less -

The development objective of the Competitiveness Development Policy Operation Program is to improve competitiveness and thereby increase the volume of Moldovan exports,... Show More + especially in European Union (EU) markets; and improve access to finance thereby promoting investment-led growth. This program document presents a Competitiveness Development Policy Operation (DPO) for an amount of US$30 million. This is a single operation supporting the efforts of the Government of the Republic of Moldova to enhance growth through export competitiveness and increased access to finance. The Government's program for the period 2011-2014 represents a transition from the stabilization and recovery agenda to establishing a strong basis for growth driven by investment, innovation and competitiveness. The operation builds on and deepens the growth and trade-oriented structural reform agenda started under the economic recovery development policy operation, which was approved by the Board of Executive Directors on June 24, 2010. The Government of the Republic of Moldova has an opportunity to implement reforms that would put the economy on a more sustainable export-led growth path. Emerging from the global economic crisis, Moldova's economic growth resumed swiftly in 2010 and 2011; however, the current Euro area crisis is likely to result in a slowdown of growth in 2012 and in the medium term. Moreover, despite the recovery in 2010 and 2011, job creation remained weak. The main driver of growth in 2010-2011 was private consumption, suggesting that the economy could be returning to the pre-crisis pattern of growth. Before the crisis, a decade of growth with weak job creation created a vicious cycle of migration, remittances, exchange rate appreciation, declines in tradable sectors, joblessness, and thus more migration. Heavy reliance on remittance-funded consumption and housing construction leaves the economy vulnerable to changes in the external environment and undermines Moldova's long-term competitiveness. The operation addresses binding constraints to economic growth by improving the returns to private investment and reducing the costs of finance. Show Less -

The objective of the Regional Development and Social Protection Grant Project is to reduce the economic and social disparities among regions. The closing date for the... Show More + project will be extended from September 30, 2012 to November 16, 2012. A six week extension will allow the project to meet its development objectives and for full disbursements under the roads and Waste Water Treatment Plant (WWTP). This does not require an extension of the completion date of the administrative agreement, which remains December 31, 2012, but an amendment stating that the end dates of activities provided are extended until November 16, 2012. The first two components of the project managed by the Moldova Social Investment Fund (MSIF) have been completed satisfactorily and fully disbursed. This will be the third and last extension. The first in June 2011 was for three months to allow time for the administrative agreement and framework/financing agreement between the Government and EC to be amended. Once the framework agreement was approved, in July 2011, the administrative agreement was extended by one year to December 31, 2012 and the grant agreement to September 30, 2012. There is no possibility of further extension due to the fact that the EC cannot extend the administrative agreement. Show Less -