Moldovan authorities need to be prepared for new uncertainties - Inguna Dobraja.
As part of the National Bank's podcast "Give Sense to Money", the WB's Director for Moldova noted that Moldova has been hit hard by a series of shocks over the past few years, "perhaps more than any other country". "It started with the Covid-19 virus pandemic, then droughts, then the energy crisis: the country was very vulnerable because it was dependent on only one source of energy. Then it was negatively affected by Russia's invasion of Ukraine. So, when such risks are combined and multiplied, you can imagine how much the economy suffered before it started to recover," the WB Director for Moldova said. She believes that the Moldovan authorities should be vigilant, as it is unknown how long the war in the neighboring country will last: "I think Moldova should be aware that there will be a lot of uncertainties. And I think it's important to plan for them." In her opinion, in particular, the government should seriously prepare for the next cold season, as there is no guarantee that it will be as warm as the previous one. At the same time, in dealing with immediate challenges, the government needs to remain flexible to be able to allocate more resources than planned if necessary, while at the same time reviewing some of its expenditures; looking for and implementing more efficient ways of utilizing budgetary resources. "For example, check the efficiency of the procurement system, pay attention to investments: how quickly they are implemented, because if you wait too long to implement them, they become costly," she stressed. In the long term, the authorities should reduce bureaucratic delays, allowing businesses to operate on the market and overcome the uncertainty caused by the war. The WB Director for Moldova considers necessary the adjustment of the personal income tax and corporate income tax, in order to make these taxes transparent, clear and easy to administer, both for the taxpayer and for the state, as currently there are many options and exemptions, and this reform can be carried out quite easily, compared to others. In the medium term, Inguna Dobraja drew attention to the implementation of parallel reforms, rationalizing expenditures by reforming services, education, and health care - those that require large budgetary resources. "These measures will not bring immediate savings, but the longer we wait, the more expensive they will cost later. Mobilization of domestic revenues is a long-term work," she stressed. // 24.08.2023 - InfoMarket.
