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EBRD adopts new strategy for Moldova
Reforms have helped growth, but much remains to be done
Improved macroeconomic stability has spurred economic growth in Moldova over
the past three years, but a great deal remains to be done if more progress is
to be achieved, the EBRD declares in its latest strategy
for Moldova issued today. The paper analyses the country's progress in
political and economic transition and outlines its priorities in Moldova over
the next two years. Priority areas will be private sector development, policy
dialogue with the authorities to improve the investment climate and support
for small business entrepreneurs.
While concerns about economic stabilisation remain, particularly on foreign
debt, Moldova's overall macroeconomic performance has improved with three
years of continuous growth of 2.1 per cent in 2000, 6.1 per cent in 2001 and
7.2 per cent in 2002. Growth in the first quarter of 2003 was 5.4 per cent,
and is expected to reach 5-6 per cent by year-end.
Olivier Descamps, EBRD's Business Group Director for southern and eastern
Europe, said Moldova has made some reforms important for growth, and the
reduction in inflation is a positive sign. But he added that longer-term
prospects for one of the poorest countries in Europe depend on the
implementation of structural reforms, accelerated enterprise restructuring and
privatisation in such key areas as energy distribution, telecoms and wineries.
He also emphasised the need for Moldova's continued collaboration with the IMF
and for improvements in the business climate to attract much-needed foreign
and domestic investment.
To help speed up reforms and address some of the challenges facing Moldova,
the EBRD's activities will focus primarily on supporting private sector
development in the country, and increased policy dialogue with the authorities.
Specifically, the EBRD will support:
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Financial Sector - The Bank aims to provide financial support - equity
and debt - to local banks, and expand its trade facilitation programme to
support intra-regional trade and the banking sector. The EBRD will also
support new financial products, such as leasing and mortgage financing, if the
regulatory and market conditions are conducive to their development.
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Enterprise Sector - The Bank will seek opportunities to support private
enterprises, including agribusiness. More emphasis will be placed on
supporting micro, small and medium-sized businesses through credit lines to
local banks. It will also undertake risk sharing facilities with local banks,
and expand programmes that provide advisory services for local enterprises.
Projects linked to foreign investment and privatisation will also be supported.
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Public Utilities - Whilst there are substantial needs in the
development of the energy sector, the Bank's further involvement will be
conditional on an improved regulatory and operational environment. In
telecommunications, the Bank is prepared to consider support for a
post-privatisation investment programme for state-owned Moldtelecom.
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Policy dialogue - in the context of finalising and implementing
Moldova's Poverty Reduction Strategy, the Bank will collaborate with other
institutions in increasing its policy dialogue with the authorities on
improving the business climate.
Mr Descamps said, the EBRD will continue to support Moldova on all levels as
it continues its journey towards a market economy. The Bank will also seek to
mobilise much-needed donor financing in support of the preparation and
implementation of its projects, legal transition work, and its policy dialogue
on the country’s investment climate, he added.
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