World Bank lent Moldova USD20m to improve government administration

Chișinău, Moldova (Göran Höglund (Kartläsarn), CC BY-ND)

Government agencies and line ministries received technical assistance from the World Bank on re-engineering services, digitization and better alignment of institutional capabilities.

“For many Moldovans, limited access to government services has contributed to social exclusion, fewer opportunities and a lower quality of life – especially for those in rural and remote areas,” the World Bank (WB) said.

“The project will improve the quality of and access to public services,” World Bank country manager for Moldova, Anna Akhalkatsi, said. “We believe this project will also address governance issues, and will lead to improving people’s trust in public institutions.”

The project addressed priorities for poverty reduction and shared prosperity, identified by the World Bank’s 2016 Systematic Country Diagnostic for Moldova.

Since Moldova joined the World Bank in 1992, over USD1bn has been allocated to over 60 operations. The WB’s portfolio includes nine active projects with a total commitment of USD358.5m. Areas of support include regulatory reform and business development, tax administration, education, roads, healthcare, agriculture, climate adaptation, and others.

The International Finance Corporation’s committed portfolio in Moldova is USD53.8m, consisting of 95 per cent loans and 5 per cent equity. The Multilateral Investment Guarantee Agency has provided guarantees totaling USD95m. Both institutions are members of the World Bank Group.

EU on the same page

The European Union said that Moldova needs to do more to improve the rule of law and the environment for business as the two sides deepen their relationship. Moldova signed an association agreement with the EU in 2014, which took effect fully last July.

The European Commission noted that Moldova had introduced reforms aimed at restoring the independence of the judiciary and tackling corruption.

But the report said that “respect for human rights and fundamental freedoms requires greater attention, in part due to weaknesses in the justice system.”

It said the climate for business and investment in the country “remains negatively affected by widespread corruption and inconsistent policies.”

On June 2017, the representatives of EU Member States endorsed an agreement reached with the European Parliament on macro-financial assistance for the Republic of Moldova.

The EUR100m macro-financial assistance consists of EUR60m in loans and EUR40m in grants. The assistance fund would supplement the resources provided by the IMF and other institutions to support the economic stabilization and the structural reform agenda for 2017-2018 period.

The Council of the EU said the reforms undertaken in the financial sector and in the management of public finances were positive, but still put emphasis on efforts needed to implement further reforms.

“It is a good step forward, since the assistance comes with conditions that are sufficient guaranties for accomplishing the assumed reforms,” said the Co-chair of the Parliamentary Cooperation Committee EU-Moldova, Andi Cristea.

The European Parliament, the political groups, EPP and ALDE in particular, should keep a similar, balanced line, not one politicized on the basis of sentiments of right political families. The reforms are the objective, they need to be held apart from the political games”, Cristea said.

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