The Moldovan Government Reported Economic Growth. Why Not Noticed by Population

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Marina DRAGALIN From the windows of high government offices, opens up a rosy and promising view on Moldovan economy. However, going down "to the ground", you can see a completely different picture. The significant difference between the assessment of the current situation as the authorities see it and the real living conditions of people leads to an increase in social tension and protest moods. The state of the Moldovan economy. Government version ... The Moldovan government cheerfully reported positive dynamics in the economy. Ion Chicu almost proudly said that in January-February 2020, the state budget received 1.2 billion lei more than last year, which indicates "a more efficient and high-quality tax and customs administration and a real fight against gray schemes." The prime minister thanked the taxpayers and promised new projects "for the benefit of working people." For example, create a deposit account to subsidize returning compatriots. Chicu was even optimistic about the growth opportunities in the second half of the year for the salaries of teachers, doctors and other public sector employees (of course, nothing to do with the elections). Moreover, at the end of February, parliament passed a bill on indexing pensions twice a year: now inflation should not “eat up” the minimum income of the population. The mechanism will be applied not only to pensions, but also to all social benefits. In addition, as decision of the parliament, families raising four or more children will now benefit free health insurance. It was not possible to cancel the bill on the billion, but measures were taken to mitigate the burden on the budget in connection with the redemption of government bonds from the National Bank. For this, a part of NBM profit will be redirected to the state budget. Judging by Cabinet statements, the situation has also improved with international assistance. The IMF is ready to complete the program in the last tranche and begin to formulate a new agreement. It seems the issue of obtaining a Russian loan is cleared up. The first part of it in the amount of 200 million euros is expected in early April. Moldova, as stated, managed to agree on “good conditions”: a period of 10 years, at 2% per annum. The tranche is planned to be spent on several sections of roads restoration, for example, part of the bypass road in Chisinau and the Balti-Kriva section. In total, it is planned to restore and build about 250 km of roads. ... and the sad reality However, the numbers and slogans sounding from stands and accounts of politicians on social networks, unfortunately are not ready meeting the reality. The declared growth (if it really is) of certain indicators does not yet affect the life of the population, which under the government of technocrats faced new problems. First of all, in Moldova there are still large wage arrears nothing has changed since January about. According to trade unions, the debts amounted to more than 20 million lei. In addition to this, employers do not make contributions for their employees to social funds and that directly affects the calculation of current pensions. Debt record sectors: HoReCa, retail, mining, IT, wholesale and transportation. The media covered the situation with delay in payments to artists of the National Opera and Ballet Theater named after Maria Biesu and the staff of the Unified Emergency Service 112. In addition, as a result of the reform of the funding system for scientific projects since the beginning of the year almost three thousand scientists in Moldova have not received their salaries. The beginning of the current year registered several times fuel prices increase, which naturally led to a jump in food prices. Tariffs for intercity passenger transportation increased as well, in some directions - immediately half as much. A farewell to some routes needed to be stated, they were closed due to lack of profitability. Even the high incomes propelled by Ion Chicu did not save the budget from a deficit of almost 800 million lei only for January. Inflation, declining compared with the last months of last year, is still above the projected level. New challenges area ahead Moldova. Firstly, a warm and dry winter, which comes across almost the entire agricultural sector. For some reasons are invisible some government measures aimed at eliminating possible negative consequences for farmers. And, second thing is the coronavirus thing, which is already adversely affecting the global economic system and causes additional sources of disinflationary pressure on the level of consumer prices. In addition, an outbreak in the EU countries, where a significant number of Moldovans live, can lead to a decrease in the volume of remittances received in the country. Need to state that often it is namely them who keep the citizens remaining in Moldova afloat and not mythical economic growth at all. It is unclear how the Moldovan economy will cope with this, since it has never developed independently and not has no experience of autonomous existence without powerful financial support and expert patronage. Over the past 20 years, its viability has been supported by external partners through dozens of programs of cheap loans and non-repayable grants. For example, only in 2015-2020, the US Agency for International Development, together with the Swedish Agency for Development and International Cooperation, allocated Moldova nearly $ 22 million for the development of industry and tourism. Moldova received another $ 45 million to develop the competitiveness of export-oriented enterprises from the World Bank Group (by the way, since 1992, the WB has sent more than $ 1 billion to Moldova). It is not surprising that the Moldovan authorities are focusing on the issue of attracting new borrowed funds, no matter where. Such a dependent paradigm of thinking is drowning the Moldovan economy deeper and deeper addicting entrepreneurs on the needle of international assistance and patronage. It is high time for the country's leadership to change the market approach aimed at the situational growth of benefits and pensions (which inflation eats up anyway). Finally, it is necessary to include strategic thinking and think about what will happen after cutting the grant’s “umbilical cord”, which, obviously, will not feed the economy of Moldova forever. It is better be done before all economically active people leave the republic in searching for a better life.