(INTERVIEW) Veaceslav Negruta: Moldova needs to sign a new program with IMF

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12 August, 2013 - 11:18

In an interview for TRIBUNA Veaceslav Negruta, the minister of finance, spoke about the relationship between Moldova and IMF, how the state budget is drafted for the next year, the public finance legislation and a potential impact of politics on the economic sector in 2014.

  T: Although with some delay, Moldova yet completed the implementation of the 2009-2013 Program with IMF. What can you say about this Program now when everything is already behind?   

V.N.: It is important to note that although not as we expected, we completed the implementation of this Program – a quite important and ambitious program that Moldova had with IMF from 2009 to 2013. That Program in fact enabled us to reopen Moldova to our partners and neighbours in early autumn 2009. It also served as a platform for the USD 2.6 billion envelope approved in 2010 in Brussels for a four-year term, which allowed for further economic growth, construction of infrastructure and ensured the political support for the reforms started in 2009.

I should say that the IMF Program was one of the few programs with a beginning and finality in Moldova. I mean not just the efforts to meet the deadlines, but also the quantifiable parameters achieved as agreed from the beginning and the adjustments made on the way.

In this period we consolidated the public funds and managed to ensure the financial stability in this sector. Therefore, we created the necessary conditions and a foundation for further economic recovery of Moldova.

Today there are many issues that need to be addressed related to the restructuring of the national economy, which will secure a sustainable growth for many years before. I should reiterate my strong belief that Moldova needs to sign a new Program with IMF not just because of the financial component for the next three years, but rather for the credibility of the policies that all our multilateral and bilateral development partners, including from the EU, expect to see. They all want to see the started reforms continue.

I am sure that Moldova will sign a new Program that will be proposed, negotiated and approved by the end of 2013.

T: The state budget every year becomes a major issue for debates as autumn comes. Will the Ministry of Finance manage to submit for Government review the State Budget for the next year in time?

V.N.: The Ministry of Finance, jointly with the central and local governments, is fully engaged in the development of the 2014 budget. In spite of some delays caused by the political life that has been active lately in Moldova, we are working according to the schedule.

All the guidelines based on the budgetary-fiscal principles were distributed to the budget executors. We have already had the first discussions on figures with the authorities engaged in budget development and in one week or two we will have the first draft of the 2014 budget. The Ministry of Finance will submit to the Government the draft law on the 2014 state budget by September 1, as stated in our budgetary schedule.

In the meantime, we will also submit the package of amendments to the budget-fiscal legislation that will be subjected to public debates and debated by the Parliament of Moldova.

T: Since you mentioned the local governments, I would like to ask you what the so much debated Law on the public funds is about.

V.N.: The Parliament passed a couple of laws which will form the legal and regulatory framework for the public funds for the next 10-15 years. It is the new Law on the public funds and the budgetary –fiscal responsibility, which passed the second reading in Parliament in July, and the new Law on the local public funds, which provides a new concept for the relationship between the central budget and the local budgets. This is a small revolution which aims to enhance the decentralization process in Moldova. In the future, this reform that targets the local public funds will create a basis for a really democratic state in terms of the relationship between the central and local governments and delimitation of their functions.

It should be noted that in June the Government approved the Public Funds Management Strategy to be applicable till 2020. It will serve as a roadmap for the transparency of public funds, availability of information about the public money, understanding of how it is collected, spent and reported in a public funds management system.

T: How do you expect the financial and electoral year 2014 to be?

V.N.: First of all, I would like to speak about 2013 and say that both the economic growth and the parameters that were used to develop the 2013 budget are largely confirmed. Despite the pessimism of many, the reality shows that our forecasts were right. This gives us confidence that we will have an about 5% economic growth by the end of the year.

As for 2014, certainly we don’t want to see the political cycle and, eventually, the parliamentary election have an adverse impact on the reforms and the economic growth. The political cycle is important. It is an exercise involving the entire society, and the economic and social processes should go their natural way and in no case link with speculations and populist actions. I am speaking about the potential actions targeting the social and economic policies by those who are in a political competition. Hopefully, the political cycle will not have an adverse impact on the economic trends.

Cristina Pendea