WASHINGTON, June 11, 2014 — The World Bank’s Board of Executive Directors today approved a US$45 million financing to the Republic of Moldova for the Second Competitiveness Enhancement Project, which will contribute to increasing the export competitiveness of Moldovan enterprises and decreasing the regulatory burden they face.
The new operation supports the Government of Moldova’s National Development Strategy “Moldova 2020” goals of improving the business enabling environment and promoting better access to finance for enterprises. To achieve these priorities, the project will support the Government’s regulatory reform strategies, development of small- and medium-enterprises (SME), and initiatives to improve access to medium- and long-term finance for export-oriented companies.
Over the past decade, exporting sectors have seen little dynamism, and in the several years prior to the global financial crisis, they grew at a pace slower than GDP. Exports have mostly remained concentrated in a few traditional, low value-added industries, and there has been little expansion of direct exports from Moldova to non-CIS countries.
The Government’s priorities in addressing these challenges are centered around supporting export-oriented economic growth based on better regulations, increased investment and the development of goods and services-exporting industries. To fully reap the benefits of deeper economic integration with its neighbors, Moldova needs to increase its overall competitiveness.
In this context, the Second Competitiveness Enhancement Project will support three major areas:
- First, the Project will assist the Government to successfully implement its regulatory reform strategies. It will focus on increasing accountability and oversight of reforms that improve transparency and predictability, and reduce the cost of doing business. The Project will also assist the Government in implementing reforms that benefit export competitiveness, such as facilitating the issuance of licenses, permits, and authorizations, and improving competition.
- Second, the project will support SME development by strengthening SMEs’ linkages to markets and providing matching grants to implement business improvement practices focused on export competitiveness.
- Third, the Project will provide medium- and long-term financing for working capital and investment purposes to export-oriented enterprises, and will promote improvements in other financing tools.
“Moldova has a tremendous opportunity to boost exports-led private sector growth if it succeeds in strengthening its business enabling environment and increasing competitiveness. We look forward to working with the Government to help the country realize this opportunity, and ultimately create more jobs and greater prosperity for all Moldovans,” said Abdoulaye Seck, World Bank Country Manager for Moldova.
Since Moldova joined the World Bank in 1992, over US$1 billion has been allocated to 49 projects in the country. Currently, the World Bank portfolio includes 8 active projects with a total commitment of US$189.9 million. Areas of support include regulatory reform and business development, education, social assistance, e-governance, healthcare, agriculture, environment, and others. The International Finance Corporation has invested US$233 million in 24 projects in various sectors, and the Multilateral Investment Guarantee Agency has provided guarantees totaling US$95 million. Both institutions are members of the World Bank Group.