State-Owned Enterprises Under the Spotlight: The Black Holes of Moldova's Economy
Authors
Automatically translated summary. The full text is available in Romanian.
Independent Think Tank “Expert-Grup” examines the role of state-owned companies in Moldova's economy. Citing Public Property Agency data for 2015-2016, the commentary finds that these companies generate large revenues but weak profits, and it sets out governance, transparency and anti-corruption reforms for the authorities.
In 2016 Moldova had over 200 state enterprises and over 100 joint-stock companies with state shares. In 2015 their revenues exceeded MDL 26 billion, over 21% of GDP, yet cumulative losses in 2013-2016 topped MDL 3.5 billion. Excluding Moldova-Gaz SA, their cumulative profit in 2016 was MDL 180 million. Indebtedness rose between 2013 and 2015, faster for the largest firms, before falling in 2016.
The authors cite politically affiliated appointments, weak corporate governance, vague performance targets, poor oversight and low transparency. They recommend privatisation, merit-based appointments, limiting the state to setting performance indicators, holding managers accountable, state audits, publishing indicators and an annual consolidated report, and mandatory corporate governance codes. They also call for a determined fight against corruption and fuller data access for citizens.
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