Republic of Moldova

The Study “Impact of the Foreign Direct Investments on the Economy of the Republic of Moldova” was launched

Chişinău, 27 July 2010 –„One may say that, on the long term, FDI had a major role in ensuring the economic growth in the Republic of Moldova, if taking into consideration that the share of foreign and joint venture companies in the GDP went up from 1% in 1995 to about 19% in 2008. In 2004-2008 the companies with foreign capital have had bigger sales compared with the domestic ones. In most sectors the growth of the number of companies with foreign capital was accompanied by the growth of the number of local companies and also by an increase of sales in the local companies. However, in the absence of an attractive economic potential and natural resources and also lacking an attractive investment environment, the Republic of Moldova turned out to be one of the „weakest” country as far as attraction of foreign direct investments in its economy is concerned. Also, the financial crisis had a dramatic impact on foreign investments, the FDI inflows decreasing in 2009 more than 8 times, which is one of the biggest decreases among the Central and Eastern European countries.” These are only several statements of the study on ‘Impact of the Foreign Direct Investments on the Economy of the Republic of Moldova’, launched on July 27 in Chisinau.

The study includes the impact analysis of foreign direct investments (FDI) on the Moldovan economy. In particular, the extent to which FDI contributed to economic growth, increasing of exports and employment, performance of companies with FDI in comparison with local companies, positive or negative impact of FDI on local producers have been investigated.
The respective report has been developed by the Expert-Grup Independent Analytical Center , in collaboration with the Ministry of Economy and UNDP Moldova, in the framework of the UN Joint Project on Strengthening the National Statistical System, implemented in partnership with the National Bureau of Statistics (NBS). The data used for the given analysis cover the period of 2004-2008 and have been mainly provided by NBS, as well as the National Bank of Moldova.
The purpose of this analytical research was to demonstrate how the existing statistical data, especially official statistics, can be used to evaluate the impact of FDI on the Moldovan economy, precisely from this sectorial perspective. “During the research, we noticed that NBS has an immense volume of statistical data, which could be used more efficiently by the Government, to carry out extremely useful studies, and to analyze the impact of its policies”, Victor Prohnitchi, one of the authors, has stated.
The paper includes a series of policy recommendations to maximize the positive effects of FDI on the Moldovan economy. ““Given the main conclusion of this analysis, saying that the FDI positive effects are more significant then their negative effects, it becomes clear that the Government needs to ensure further enhancement of FDI size in the Moldovan economy. From this perspective, one of the recommendations is to continue the privatization”, is stated in the report. Another recommendations identified by the report’s authors are the reform of the educational sector that constitutes a key premise in ensuring, in the long term, the human capital development in the Republic of Moldova and the enhancement of absorption capacities of foreign investments, but also debureaucratization of the regulatory framework of the business activity.
Valeriu Lazăr, Deputy Prime Minister, Minister of Economy, has declared that the research represents a first attempt to make a complex/comprehensive analysis of the roles of FDI in the national economy. The respective paper will be useful not only to the staff from the concerned ministries, but also to all those who participate at the preparation and implementation of the economic policies, also the quality of Government’s policies depends at a big extent on the quality of available statistical data. „If before the state was concerned about the volume of FDI, than at present we get more concerned about their quality and structural distribution, what means their focusing on production of goods and services”, was also mentioned by Valeriu Lazăr.

Matilda Dimovska, Deputy Resident Representative of UNDP Moldova, has stated that through the launching of this study, the Joint UN Project, in accordance with its objectives, contributes to the strengthening of the national statistical system, but also to the improvement of the capacities of independent research institutions to produce, on the basis of official statistics, analytical papers in the benefit of the Government. “We hope the launched report will serve a solid basis for debates for the governance and its partners as it regards the promotion of foreign direct investments, ensuring, thus, maximum socio-economic benefits for the Republic of Moldova”, told Matilda Dimovska.  

According to her, in the second half of 2010 other two research papers, one of them focused on the labour market in the rural area through gender lens, and the second one – on helath sttaus of the population.

For contact: Aurelia Spataru, Project Manager, Strengthening the National Statistical System Project, tel.: (373 22) 40.31.42, fax: (373 22) 21.08.68; E-mail: aurelia.spataru@undp.org   

Study “Impact of the Foreign Direct Investments on the Economy of the Republic of Moldova” (Eng), (Rom)