The widely advertised salary reform of the Democratic Party turned out to be rough, and the residents of Moldova keep leaving the country.
Smoke and mirrors
The leitmotif of the Moldovan authorities’ policy was ostentatious ‘care for people’ in the form of humanitarian projects, ‘good roads’ and increased social payments. The apogee of the PDM’s generosity was the increase in salaries of public sector employees, about which Plahotniuc media resources say from every TV set.
“Until that day, we had a lot of separate laws for different structures. Because of this chaos, people of the same category could receive completely different salaries. Now we will have a single law in the public sector,” explained Moldovan Prime Minister
Pavel Filip. The current law introduced a single salary plan with the difference between the highest and lowest salary decreased by one third.
The initiator of the reform Vlad Plahotniuc boasted that “thanks to this reform, no public sector employee in Moldova will receive a salary below two thousand lei”. So far, salaries have been recalculated only in the institutions of education, health, social protection and municipal administration. The rest need to wait for spring – then, according to the leader of the PDM, there will be a second stage of ‘increases’.
It is expected that it will be 30-50% increase of salaries for about 200,000 public sector employees at the latest by 2021. Moreover, the PDM is planning to ‘load with money’ some pensioners: they will index-link some pensions and simply increase others by 10%. According to the plan, the size of some allowances will also increase.
Rough reform
Democrats claim that they worked on the ‘salary’ law for a year, but the first recalculation of salaries showed that the reform is poorly thought out. For example, many teachers began to write on social networks that
found no increase in salaries, although Pavel Filip emphasized the growth of teachers’ income in the January report of the government. Other public sector workers also complained, whose income, in some cases, even declined.
The government rushed to urgently correct errors of the reform – the Democrats do not need another flash mob
“Teacher, not a beggar” before the elections. The error correction proved to be so massive that the government took a month-long pause to sort out the problem (in fact, to just wait out the election).
It is already clear that the attempt to appease the electorate with money will seriously backfire on the new or old government of Moldova in the near future. Plahotniuc and Filip explain the growth with “stable growth” of the Moldovan economy over the past three years. It is telling that this statement is refuted even by Finance Minister Octavian Armasu who says that the salary reform was successful only because the government collected more taxes from the population.
Other professionals also do not share the optimism of the PDM leaders. Deputy from the PCRM
Oleg Reidman believes that it is planned to cover the cost of salaries by firing part of the public sector workers. In 2019, it is planned to increase average salaries by 17 %, and to increase the salary budget by about 8%. Even with reduced taxes and contributions for employers, funds may simply not be enough.
At the same time, according to
Tatiana Laryushina, Doctor of Economics, the reform does not solve the main problem of the country – an inefficient economic model and catastrophic poverty. “I fully understand the strategy of the ruling government – small steps and synchronization of economic and electoral cycles. But if there is no comprehensive approach, this salary reform will not change anything and will not improve the situation of most public sector employees. They will remain in the category of ‘working poor’, over which there is control and leverage.”
The situation with the increase of pensions is also ambiguous. According to
Vlad Batrîncea, PSRM deputy, some pensions were raised, but additional allowance was cut – in the end the total sum is either left unchanged, or even decreased.
People leave Moldova most
The term ‘working poor’ still perfectly fit to ordinary Moldovans, whose official income is almost entirely spent on food and utilities.
According to statistics, the salary is only half of the family budget. A quarter of the income is accounted for social payments and pensions, 17% – for transfers from abroad. After the elections, Moldova, according to some reports, expects a serious increase in tariffs for gas and oil products and, as a consequence, the spike in prices for everything else. If these forecasts are correct, the current ‘growth’ of salaries is merely a harbinger of inflation.
It is not surprising that the people of Moldova easily correlate reforms and elections and therefore do not believe the statements of the authorities about a bright future. The country’s population is rapidly declining, and Moldova holds a stable place in the top ten countries suffering from the outflow of labor resources, and the first in Europe in fact. International experts
PricewaterhouseCoopers predict that this year at least 27 thousand people will leave Moldova in search of a better life, almost 1 percent of the population.
Unfortunately, this is not a ‘bad year’ – it has been almost always so. The data of the Centre for Demographic Research at the Academy of Sciences of Moldova confirm that more than 30 thousand people leave the country forever every year. According to Moldovan experts, by 2050 the population of Moldova will decrease to 1.85 million people. The forecast of the Vienna Institute of Demography is even tougher: 1.7 million people. On this indicator
Moldova is the leader among the EU and CIS countries.
In addition to the migration processes, natural decline ‘beats completely’ the population of Moldova, both fertility and mortality. Last year, Moldova was included in the list of countries with the
lowest birth rate in the world – in average Moldovan women give birth to one child. Mortality, especially among elderly people increases due to the low standard of living, the prices of pharmaceuticals and medical services.
While Pavel Filip
is proud that the average pension “for the first time after independence exceeded the subsistence minimum”, the citizens of Moldova continue to leave the country en masse. The authorities still prefer to spend a few free funds on one-time pre-election actions, rather than invest them in the real development of the economy. While this situation does not change, any attempts to use hasty programmes and projects to plug system holes, which make young and employable people leave the country, are doomed to failure.
