Salary Delay, Fuel Crisis and Prices Rising. Is it that the Technocrat Government Does Not Cope with?

Home / Analytics / Salary Delay, Fuel Crisis and Prices Rising. Is it that the Technocrat Government Does Not Cope with?
Vladimir Rotar “The technocrat government’ was to stabilize the socio-economic situation in the country and provide Igor Dodon’s re-elections as president. By now, they show bad results. «Cartel Agreement» For any country, the pre-election year is usually the most positive one. Moldova is not an exception of it.  Enough to recall the 2018th, anterior to the last parliament elections when the ruling democrats reported the peak economic increase and launched a complex of social and infrastructural projects. Something like that was expected to happen this time.   The Chicu’s “technocrat government” formed in November should have forgotten about geopolitics and accumulated enough “socio-economic positive” to reach a confident election victory of the current president. But something went wrong. The first month of the year did not reach its end but the quantity of negative news has overpassed the quarterly limit. The tensest topic is of course the fuel crisis. The diesel and gas oil have raised in price several times in January, notably, simultaneously in all Moldova’s petrol stations. Instead of calming the population down or state the government’s striving to solve the problem, the prime minister Ion Chicu immediately has ticked his name addressing two contradictory statements. At first, he asserted prices are rising because Moldova “does not live under communism,” and later said that we have no oil, and therefore the country depends on external markets. In addition, according to him, the increase in prices is due to the increase in excise taxes imposed by the obligations of the Republic of Moldova towards the European Union Association Agreement. At the same time, the prime minister directly pointed out that prices will continue to rise until they are equal to European prices in 2025. Such explanations can hardly be called satisfactory for a simple layman, especially when the real reasons of the happening are much more prosaic. Moreover, despite the fact that the president created working group to monitor prices, Chicu directly admitted the state has no special leverage to adjust the value of certain commodity items. It easy to guess, the increase of fuel cost led to sudden price jump on products, including fruits and vegetables, and for some of them a double price. According to experts, this is not the limit. “The administered prices are one of the problems, since many of them have been artificially kept constant over the past years, and now these prices will have to increase. The intercity passenger transportation tariffs have already risen. Most likely, an increase for travel in urban passenger transport is to follow, mainly in Chisinau”, the expert on economic policy issues at the Viitorul IDIS, Veaceslav Ioniță said. Price raising has really begun with new year coming. Tariffs for intercity transportation increased, and in some directions the fare jumped 1.5 times at once. Beginning with February, the prices for traveling in transport units with higher comfort will also increase. In addition to the fuel crisis, rumors of wage delays began to appear. There is information of delayed payment cases to operators of the National Emergency Call Service and employees of cultural institutions. The government acts quite nervous about such news and tries to quickly solve problems. But the fact that even such trivial things as the payment of salaries has to be regulated almost under the personal attention of the prime minister is hardly optimistic. Billions on road Despite all the crisis processes, the government is determined to continue the chosen course towards large infrastructure and social programs, for which they do not spare money at all. Moreover, all these projects, one way or another, are a cosmetic alteration of the Democratic Party election "innovations". It is already known that in the new year, additional funding was allocated for the program First Home (despite the fact that it still has not shown any impressive results: the number of apartments received goes to thousands, which is a drop in the ocean across Moldova) The main emphasis is of course put on road. Judging by the president latest statements a huge amount of 8.7 billion lei is planned to be spent on repairing and laying the roadway. Ion Chicu assures that “this time there will definitely be no problems”, since the projects are financed from the state budget (itself being an oxymoron). “We have learned from past mistakes. I hope this time there are no problems, especially since projects are financed from the state budget. The rules are different. Previously, things were stopped for several reasons, now we will deal with procurement procedures. I hope that the most famous companies in this field will win and implement projects just the way we demand. We set quality above all, European companies will speak out about quality. We want these investments to be long-term, and we have a serious approach,” Ion Chicu assured. Over the next few years, it is planned to repair and build over 350 km of roads. The money for all this construction is planned to be taken mainly from the Russian loan, which, by the way, is still not approved. Nevertheless, the government says that Roads 2020 program (a small rebranding of Plahotniuc's Good Roads) will be implemented regardless outside incomes. No one argues with the need to upgrade the road infrastructure of Moldova, but it seems that in the election year there are more important areas where available funds could be directed. And even more so, they must be used in order to prevent the current crisis phenomena with an abrupt increase in tariffs and prices. After all, obviously, each such increase hurts the president’s rating. Therefore, the technocratic government is clearly not coping with its main task and does not improve the chances of the incumbent president in the upcoming elections. Not surprisingly, the ratings of Dodon and Sandu, judging by the latest polls, have already become equal. Moreover, recent sociological studies clearly show that the main problems for ordinary Moldovans are not roads at all, but unemployment, high prices and low incomes. Namely these areas should become the main application points of efforts for the executive branch in the coming year. Unless, the government’s assertiveness in Roads 2020 implementation is not related to the business interests of specific individuals, just as it happened when Plahotniuc’s times - It would be sad if true.