The new Moldovan economy minister promises a business overhaul | Bot To News

  • This year, Moldova was granted the status of a candidate for EU membership
  • Economic woes pile up, rising prices fuel protests
  • The war in Ukraine added to Moldova’s problems

KYIV, Dec 13 (Reuters) – Moldova’s new economy minister says he plans long-term reforms and will cut red tape to lay the foundations for a business-friendly economy and speed up accession to the European Union.

Dumitru Alaiba, appointed last month, faces a number of crises, from the economic fallout of the war in Ukraine to rising food and energy prices that have fueled street protests.

He told Reuters that among his priorities would be deregulating the economy and overhauling a “cumbersome” tax system that has deterred investors, allowed corruption to flourish and drained the budget.

“There is no solution other than foreign aid (for Moldova) for the immediate term, but that doesn’t mean we intend to keep waiting for grants,” Alaiba said in a telephone conversation late Monday.

Promising to cut red tape “a lot”, he said it would be crucial to boost the economy, where small and medium-sized enterprises have a “microscopic” share and about 40% of economic activity is informal.

“With so many barriers to entry, our economy is monopolized, making it even more vulnerable,” he said. “And consumers pay the ultimate price.”

EU leaders accepted Moldova as a candidate for membership this year in the diplomatic triumph of President Maia Sandu, who was elected in 2020 on a pro-European and anti-corruption platform.

But Moldova is heavily dependent on Russian gas, annual inflation is more than 31 percent, and the government expects a budget deficit of 3 percent of gross domestic product this year, which is expected to double in 2023.

The country of 2.5 million has also suffered power outages following Russian airstrikes on energy infrastructure in neighboring Ukraine, and protests have erupted over rising prices, particularly of gas bought from Russia.

Alaiba said creating fertile ground for business could help Moldova achieve double-digit growth in the coming years.

The government also enjoys a strong parliamentary majority after promising more transparency and reforms in the election.

But Alaiba also acknowledged that the government and the economy have faced the unpredictability caused by the war in Ukraine.

“The main problem is uncertainty,” he said.

Reporting by Dan Peleschuk; Editing by Timothy Heritage and Tomasz Janowski

Our Standards: The Thomson Reuters Trust Principles.

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