Prime-minister Pavel Filip has granted an interview to Moldpres new agency in whcih he highlights the key achievements the Government has managed so far.
[Moldpres]:Mr. Prime Minister, you attended the “Moldova in the new regional context” economic forum last week, organized by the Moldova Business People Association (MBPA) and held a meeting with representatives of the business environment, members of the American Chamber of Commerce in Moldova, European Business Association and Association of Foreign Investors. What are your conclusions after these two important meetings with business people?
[Filip]: The moment I became a prime minister, I set up two essential short-term goals: to stabilize Moldova and recover the confidence of Moldovan citizens and foreign partners in government and Moldova’s pro-western choice. After four months, I am glad to say that we are a stable country: we have a solid parliamentary majority, due to be at the government until 2018, regardless of the result of presidential elections. We have a clear plan of reforms, agreed and validated by European and international institutions. Our streets are peaceful and we have dialogue mechanisms with the civil society and business environment. Our people receive pensions and salaries in time. As you well know, we were encouraged both by Brussels, inclusively during the last euro parliamentary visit to Chisinau, as well as by Washington, in relation to the bilateral ties with USA and IMF.
My message is that the government has will and moves things: yes, it can do more, it can do better, and will do so as you will see in the upcoming months, but cannot do everything alone. Once we have removed bureaucratic or political reins imposed in the recent years, it is time to accelerate, to have not only stability, but upgrade to the next level and develop confidence, as Moldova needs a quick economic recovery. Here, with civil society, the contribution of the business environment is essential. Jobs bring a better life and are the most effective solution against poverty, but we should keep in mind that the state has no levers to modernize the country by itself: we want an economic renewal, we want reindustrialization in accordance with the needs of the XXI century, and we want to make a serious partnership with the investment environment. That means top modern IT parks, modern and competitive agriculture based on innovative technologies, and for those who are nostalgic, we may call them "factories and plants", but much more modernized, in accordance with the decade and the century we live in, as past models no longer work. Moldova should be prepared for 2020, not 1980.
Therefore, I met with business people and I will continue to do it, because Moldova needs jobs, individually created for the business environment. I want the government and businessmen to have a hones partnership based on trust, with responsibilities of both parties: we reduce bureaucracy and burdens of all kind, they increase investments and hire more people. We have consultation mechanisms, including a key one, which is the Economic Council of the Prime Minister. We meet as many times as necessary, we want any issue to be discussed openly and take joint efforts to find solutions.
[Moldpres]: Where do you think is the Moldovan business environment heading now?
[Filip]: I think that the business environment is becoming more demanding and observing in everything that happens in Moldova. National and foreign entrepreneurs acquire more confidence every day, that the Government is a serious discussion partner that wants to help, not hinder them. The Economic Council of the Prime Minister, other dialogue platforms with the business environment, civil society, academic environment are not only PR tools, but they are also good government solutions. To quote the classics, I may say that we are in the beginning of a beautiful friendship relationship which is going to benefit Moldovan citizens.
As someone who was previously involved in business and understands it, I want to end structural problems affecting investments and job creation: bureaucracy, corruption, limited access to finance, human capital and infrastructure. We have a lot of obstacles to overcome and many prejudices to get rid of. However, we are sincere in our partnership for results and for Moldova, we propose to the business environment. My internal messages are doubled by a string of external messages, inclusively by positive and encouraging responses in the foreign press. I am sincerely glad that our messages are properly perceived by Europe, USA, as well as by the media and political-economic environment of other development partners.
[MOLDPRES]: A good business environment is based on reforms first of all. What actions will the government take to improve the investment climate and Moldova’s economic development?
[Filip]: In the first 100 days of government we proved that we have concrete results. We preferred, including me personally, to talk less and act more. I know very well that citizens are tired of politicians who only promise during TV shows. Besides future plans, we have concrete projects and achievements. They are certainly not enough but quite enough to prove people in 3-4 months that we have good faith and we are at the government to bring change, not to buy time or patience. We do not want people to be too patient with us. We just want them to see our actions and to improve Moldova together, in all areas, starting from public policies and changing the mentality and behavior of the entire society. I go in the territory to be close to all the serious citizens, who work for Moldova’s success. I encourage the Moldovan success and respect it wherever I see it.
As for the government’s actions to improve the business environment, we set up a moratorium for state controls by economic agents. It is the first step, because the government will examine a new legislative package on state controls in the near future, which will be pro-business and pro-new jobs. It will aim to diminish the administrative burden on the business environment, eliminate abuse situations, increase the efficiency and transparency of the state control. Over the past three years of activity since the entrepreneur’s state registration, planned controls will be banned, and the provisions of the Law No 131/2012 on state controls in fiscal and customs areas, will be maximally applied.
Institutional reform of the control bodies follows naturally. Out of 69 institutions with control functions, we will leave out only 10 and 4 independent regulators. Moreover, we started to optimize and reduce permissive documents, that are too numerous and unjustified today, with an indirect but very important impact on our investment activity. Thus, from a total of 416 permissive documents, we decided to eliminate 114 and we will not stop here. The implementation of the single shop for permissive documents, reform of functioning authorizations, eliminating the obligation to use the stamp and changing the functioning customs system already generates bigger incomes. All these are projects that we have initiated and will facilitate the business development in Moldova.
In addition, the new law on prosecution, which will enter into force on 1 August, will strengthen the fight against corruption and confidence in the rule of law. Concrete steps have been taken to enhance the regulatory powers and independence of the National Bank of Moldova and the National Commission for Financial Markets. Improving the Labour Code to be more flexible and allow various forms of contracts, connecting the system of education to labor market requirements by encouraging dual education, renewable energy development and identification of major infrastructure projects are also part of the change.
And this is just the beginning. Again, I would like to emphasize a key word: modernization. Here I must touch upon a project very dear to me, one related to IT parks, which will help those working on future technologies. Political will, public and external support and a clear development plan will make a difference for Moldova in the upcoming years. We tend to offer Moldovan citizens a modern country during the next parliamentary elections in 2018. At the same time, we want to bring Moldova closer to Europe, on the mentality and prosperity plan.
[MOLDPRES]: Do we have a business needing a long-term commitment, in the context of the improvement of the business environment?
[Filip].: Nothing is more important for the business environment than stability and predictability. And the guaranteeing of these principles, which bring jobs, should exceed a political cycle. Therefore, I always draw attention of political adventurers and political arsonists on duty to cease the diversions, as not or another party is affected, but Moldova. A truce for the economic development of our country is more than necessary politically. Yes, we may have political disagreements, yet with serious arguments, based on different visions of development: Moldova is not a toy, with which politicians with childish attitudes are playing. It is very easy to be ironical, it is much more difficult to have solutions; I here also make an appeal to political maturity.
As for us, the commitment is clear: we will take decisions only following consultations with the civil society and the business environment; we believe in dialogue and we think that our role is to support, to be representatives of a smart state, adapted to the 21st century. I will give quite concrete examples, in order to be well-understood. For 2016, the list of fiscal, budgetary and customs measures with positive impact on the environment comprises: increase in the term of reporting the losses from 3 to 7 years, by excluding their rescheduling in equal payments; excluding the tax payer’s obligation to use only computerized information systems for cash and control machines, certified by the Finance Ministry; providing enterprises the right to submit fiscal reports to any territorial fiscal body; diminution of the quotas of customs duties from 5 per cent, 6.5 per cent, eight per cent, ten per cent to 1 per cent on the goods used as complementary products for the finished goods of the processing industry; giving possibility to postpone the term of payment of import rights for economic agents by ten days, on condition that a guarantee is established.
We also think about the optimization of the fiscal legislation by the working out of the new Fiscal and Customs Codes, including through the light of the national legislation’s approximation to the provisions of the European Union’s legislation; establishing the mechanism of fiscal solution issued by the State Fiscal Service; revision of the system of spending allowed for deduction on fiscal purposes; revision of the mechanism of motor cars’ taxation.
Just as I have said, the agenda of the amendments must be drafted by common agreement with the business environment and the civil society; we certainly should learn also from the good international practices and here we must strengthen the cooperation with the development partners and the states of the world. This is how the long-term commitment is edified; this is how serious partnerships are built.
[MOLDPRES]: We have good laws and normative acts, both local and foreign experts recognize this; yet, there are big problems as to their implementation. Do you think that a communication platform with business people would be able to remove problems in this respect? What will the role of the Economic Council under the Prime Minister be in this process?
[Filip].: The implementation of the measures taken and the observance of the commitments generate the trust about which I was speaking in the beginning of this interview. We are judged according to such things. I give you just the example of the Roadmap, which we will fulfill successfully till late next July. There is a mountain of will at the government and the parliamentary majority, in order to do what must be done and always fulfill what we promise.
The Economic Council (CE) is not a gimmick of image. It yields results, provides solutions and censors measures, if they are not friendly. The dialogue is technical and applied, as the interests are common. CE’s goal is to offer a platform of coordination and prioritizing the policies promoted by the government in the economic sector, and also of monitoring their efficiency. The working groups acting within the Council already produce results, not declarations of intent. The measures which we have earlier discussed were accepted by the Working Group, Removing Constraints on Entrepreneurial Activity and in the one on facilitating the cross-border trade. In the near future, we will have a working group dedicated to stimulating and maintaining private investments – one of the indexes of regaining the trust.
[MOLDPRES]: At the Moldova Business People Association, you said that the government would propose a partnership with the investors for jobs, innovation and development. What will this partnership imply?
[Filip].: My principle is that we want to be judged according to what we do, not according to rumours and charges. I have not demanded and I will not ask for a blank cheque, just because the last years’ failures had taught us that we must first offer before demanding. The triangle state-private environment-civil society, if it works efficiently, is our passport for development. The truth is that we have been living in a vicious circle in the politics-business relations for more than 20 years, time is ripe for a virtuous circle.
Partnership means consultation and mutual responsibilities. I showed what the government would do. My expectation from the business environment is to speed up the investments, create jobs and pay the taxes in time, signaling, at the same time, the zones with problems, including in terms of corruption. This government does not tolerate corruption and neither the business environment has any reason to tolerate corruption, and this year justice is endowed with laws to do its job honestly and responsibly.
It will be easier for the business environment to work with us, as we are set to reform the public administration as well. The cabinet will be smaller and more efficient. The administration must be a partner, not somebody with pretentions of abusive master, this is my philosophy.
[MOLDPRES]: When and how do you think the government’s plan of improving the business environment will have a positive impact on the ordinary citizen?
[Filip].: All we do is while thinking about the citizen. This is the supreme criterion for the success of our governance: the improvement of the Moldovans’ living standards. We back the business environment, but we recognize the deeply social character of our governance. A solid business means jobs, incomes for citizens, as well as for the state, i.e. more investments in education, health and infrastructure.
We have already made several important steps in the last months: higher funds by 50 per cent for compensated medication and extension of this list, 20-per cent increase in the salaries for medical employees starting from 1 July. We diminished the price of electric energy for citizens by over ten per cent. The gas rates were also decreased by 10.9 per cent. Also, a concern of the government was the situation of the vulnerable citizens: we have indexed the pensions and other social allowances by about ten per cent starting from 1 April; besides, we increased the minimum guaranteed salary in the real sector from 1,900 to 2,100 lei.
We will not stop here: we prepare clear-cut programmes for employees and for access of young people and young families to decent dwellings. In the report on the first 100 days since taking over the governance, I said that the people should feel that their lives are changing for the better, the administration works more efficiently, politics no longer defies the citizen, and the development partners regain their confidence in us and continue backing us to modernize our country. Now I say, while being aware of how much work we have to do, that we are on the right way.