SUMMARY OF THE IMF MISSION VISIT TO THE REPUBLIC OF MOLDOVA

A few days after the publication of the Fund delegation's conclusion, when the initial emotions in Moldovan society have subsided, one can reread the mission's statement and summarize it - for the managers of the Republic of Moldova, it is negative.

The beginning of the text, which speaks of the recovery of Moldova's economic growth, contradicts the ending, which lists the current and projected figures for public debt, which, according to the IMF's assumption, will increase from almost 60% to almost 70% of GDP in the next three years. Such negative dynamics mean that after all the conversations held with the country's top officials during the current delegation visit, the IMF representatives have no hope even for a revision of their economic model by the Moldovans, and it confirms the inertia and irrelevance of the actions they are taking.

This is reinforced by a direct indication of the weakness of macroeconomic indicators, by the fixation on the current ineffective economic configuration, which is oriented not towards production and increasing competitiveness, but towards consumption, and by drawing attention to the only sector outside state regulation – the banking sector, which also, despite its stability, does not particularly invest in the country's development and essentially also works to strengthen a flawed consumption-based economy, not a high-quality production-based economy.

Moreover, the IMF mission's conclusion, upon reflection, leads to an interesting conclusion that the long-term vision of the authorities for Moldova's economy – a focus on high added value – declared by the previous government and confirmed by the current one, remains declarative.

We have previously expressed our opinion on this formulation – it is worthy of first-year students and was normal for the last century, but not now and not at the government level – now in the IMF report we see that they also notice this. And they make it clear that even such a childish formulation of our country's development concept by our authorities remains unattainable.

Separately, it is stated about the revenue side of public finances – that it is insufficient. It is clear that the tax component is indicated (for how else to fill the budget?), but taxes do not appear out of thin air and a fragmented environment. And this means that conditions for economic development and growth must be created locally, which in turn, again points to a reboot of the economy as a whole, and consequently, to an adjustment in thinking and the development of a new plan for the country.

And here we mentally turn to the current Prime Minister, who has not yet developed such a plan even in general terms. We can suggest he start from what we have already formulated and discuss it personally - https://noi.md/.../elena-radu-ot-tupika-k-prostranstvu...

We want to note that, despite the report's unflattering nature, the IMF delegates managed to identify and correctly designate one of the elements of growth for the future development economy of the Republic of Moldova – the energy sector and the need to invest in it. On this matter, we also have ideas on how this can be done, setting 21st-century tasks for the sector and the country, since we also consider energy as a growth point in our strategic vision for Moldova and the Economic Reboot Plan.

In summary, we consider the IMF mission's conclusion adequate to Moldova's current reality, prompting reflection, conclusions, and a reassembly of management plans and actions for the country from top to bottom. A Charcot shower, as they say, both invigorates and heals. This is good, we support it.

And we also perceive the report as the Fund's expectation of new conceptual proposals from Moldova and its citizens and a dialogue on them. And that is also correct.

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P.S.

Full text of the IMF mission conclusion = https://www.imf.org/.../cs-republic-of-moldova-staff...

Guvernul Republicii Moldova International Monetary Fund