Economic Reality No. 25: “Surprises” for Moldova in the New Year

The Independent Think Tank “Expert-Grup” has launched issue No. 25 of “Economic Reality”, which identifies and analyses the most important political and economic developments of December 2011 – January 2012. This issue analyses a number of aspects, including:

• The major metamorphoses taking place in the approach to the political deadlock. After several failed attempts to elect the president, the AEI proposed a new referendum, this time to consolidate the parliamentary republic. The proposed “solution”, however, denotes a lack of strategic approach and a low degree of crystallisation of “principles and values” in governance.
• Lack of progress in justice reform and in public property management reform: an invitation to “corporate raids”. The “Registru” case shows that the problem of justice is shifting from one that harms the business climate to one that undermines national security.
• Slowing economic growth and worsening confidence. Some macroeconomic indicators placed Moldova favourably in the region, but towards the end of the year some signs of fatigue (slower growth rates in industry, transport, household incomes and exports) and of worsening confidence (rising margins on the interbank market) were observed. At the same time, although the eurozone sovereign debt crisis has left its mark on the Moldovan banking system, the latter remains fairly immune to possible shocks.
• Reducing informal employment. A subject intensely discussed in the summer was the drafting of the “Action Plan on minimising the practice of paying wages “in envelopes” and “undeclared” work”. Recently, the Ministry of Labour, Social Protection and Family brought the subject back into discussion with a public policy proposal on this topic. Who should contribute to combating informal employment, and how?