- Moldova gets EU candidate status this year
- Economic problems pile up as rising prices spark protests
- Ukraine war exacerbates Moldova’s problems
KYIV, Dec 13 (Reuters) – Moldova’s new economy minister said he was planning long-term reforms and would cut bureaucracy, lay the groundwork for a business-friendly economy and speed up EU membership.
Dumitru Alaiba, who was appointed last month, faces multiple crises, from the economic fallout of the war in Ukraine to rising food and energy prices that have sparked street protests.
He told Reuters his priorities would include deregulating the economy and overhauling a “cumbersome” tax system that discourages investors, allows corruption to flourish and starves revenue budgets.
“There is no short-term solution other than foreign aid (to Moldova), but that doesn’t mean we intend to keep waiting for grants to come,” Araiba said in a phone interview late Monday.
He vowed to go “drastic” in cutting bureaucracy and said stimulating the economy was crucial, as small and medium-sized enterprises accounted for a “micro” share of the economy, with around 40 percent of economic activity being informal.
“Our economy is in a monopoly because there are so many barriers to entry, which makes it even more vulnerable,” he said. “Consumers are paying the final price.”
EU leaders accepted Moldova as a candidate for membership this year, a diplomatic victory for President Mayasandu, who was elected in 2020 on a pro-European and anti-corruption platform.
But Moldova is heavily dependent on Russian gas, has annual inflation of more than 31 percent, and the government expects a budget deficit of 3 percent of gross domestic product this year that will double by 2023.
The country of 2.5 million people also suffered power outages after Russian airstrikes on energy infrastructure in neighboring Ukraine, with protests erupting over rising prices, especially for natural gas purchased from Russia.
Creating fertile ground for businesses could help Moldova achieve double-digit growth in the coming years, Alaiba said.
The government also enjoys a strong parliamentary majority following electoral promises of greater transparency and reforms.
But Araiba also acknowledged that the government and the economy face the unpredictability of the war in Ukraine.
“The main problem is uncertainty,” he said.
Reporting by Dan Peleschuk; Editing by Timothy Heritage and Tomasz Janowski
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