Dmitri Torner: Without radical reforms, Moldova has no chance of a decent future
Interview with Dmitri Torner, businessman, expert and philanthropist
Question: Dmitri, you have recently come up with a number of interesting initiatives that frankly intrigued me.For example, you raised the issue of the need for a new "guillotine" - one of the most famous laws in the country's history. Why do you think such a new law is needed?
Dmitri Torner: The essence of the "guillotine" that Moldova resorted to almost two decades ago was extremely simple: as a result of mega-efforts at the highest level, the entire legislative and regulatory framework was revised; all barriers and contradictions that were hindering the development of business and the national economy were removed. I firmly believe that the time has come for a new "guillotine" and I base my opinion on at least three considerations. First, almost two decades have passed since the previous "guillotine". In that time, much has happened, including the introduction of new rules. Today, unlike the situation almost twenty years ago, we do not have a clear general idea of what the regulatory framework for entrepreneurial activity in Moldova is. We have only a fragmentary vision in various areas. Any serious economic agent can judge something only from the perspective of the area in which he or she operates. The same applies to government agencies: each of them knows the situation only in the area they administer. This is why a similar approach to the one taken almost 20 years ago is suggested: a state commission for the regulation of entrepreneurial activity should carry out a comprehensive assessment of the existing legislative and regulatory framework, and the whole process should conclude with concrete proposals to parliament and the government on the necessary follow-up action.
Secondly, the need for the adoption of a new "guillotine" law is underlined by the changes that have taken place in recent years and the prospects that will emerge in the near future. Thirdly, the new "guillotine" law would also be relevant from the perspective of the European integration process, in which the Republic of Moldova is currently fully involved. The process of bringing the legislation into line with European Union standards has already begun, but it is fragmentary. The new "guillotine" law would not only change the situation, but in some respects would even be of an advanced nature, which would strengthen the dynamics of the European integration process.
Question: Another initiative of yours is the capital amnesty. Some experts believe that it takes certain courage to propose such an initiative, as there is a high risk of becoming the target of criticism.
Dmitri Torner: I fully understand that I have taken on a rather risky mission: I am the first person after a long pause to raise again such an important topic as capital amnesty. It is important to note in this context that I am not saying that Moldova does or does not need a new capital amnesty, but at the same time I believe that the authorities should consider it as a possible solution to the rather difficult situation in which the country finds itself. We see the efforts of the authorities to cover the huge budget deficit and to cope with the state debt. And while we are looking for alternative ways, why not consider the possibility of a new capital amnesty. At the very least, it is worth making a professional analysis of this issue and, if more positive than negative aspects will come to the fore, why not use this mechanism as well.
I understand that history is not entirely in favor of a possible new capital amnesty. The Republic of Moldova has used capital amnesty twice - in 2007 and in 2018, and both times it was harshly criticized by the opposition at the time, as well as by some experts and development partners. The criticism was not so much about the mechanism as the specific context that existed at the time. These criticisms and scandals have distorted the meaning and perception of capital amnesty as such, and the consequences are still being felt today: the concept has been "demonized" to the maximum extent possible, and anyone who mentions it risks becoming the object of criticism and accusations.
Therefore, in the case of a new capital amnesty, first of all, it will be necessary to carry out a thorough analysis of the results of previous amnesties and to assess the possible effects of the new amnesty. Secondly, it is necessary to develop a risk matrix in order to be prepared to counter possible negative consequences. Thirdly, before a possible new capital amnesty, the government needs to make sure that there is a minimum consensus on this issue both within the political class, the business community and society at large. Fourth, any possible capital amnesty should only be undertaken after broad consultations with development partners. Fifthly, other related measures will need to be identified, as such amnesties are not isolated elements and need to be addressed in a much more comprehensive way. If all these important elements are taken into account, we will be able to talk in concrete terms about a new capital amnesty which will not entail risks, but, on the contrary, will benefit citizens and the country as a whole.
Question: Dmitri, recently you have trenchantly and publicly formulated an issue: the state must decide whether it is an active player in economic activity or a referee. What prompted you to take this step?
Dmitri Torner: A simple realization that after more than three decades of independence, the state of the Republic of Moldova has not yet decided who it wants to be: an active player in economic activity or a referee in the ongoing economic processes. And this is a big problem, because until the state clearly defines its place and role in this respect, it will not be possible to talk about the real development of the economy and the country as a whole.
The large-scale process of destatization, which started almost immediately after the collapse of the USSR, has not been completed so far. As a result, more than 100 enterprises have remained in state ownership, some of which have become a real burden and unprofitable. The state owns property in a wide variety of economic fields - from sanatoriums and health resorts to printing houses. Normally, only strategic enterprises should remain state-owned - for example, Railways of Moldova company (CFM) or MOLDATSA air traffic management company. In other respects, the state should withdraw from markets that can develop harmoniously in accordance with the rules of the market economy and without state participation. Why should the state actively participate in the wine, metal or bakery markets? As long as the state is present on these and other markets, we see unhealthy (possibly even unfair) competition, where the state favors its own economic operators and prevents others from developing. And in the end the state... just loses, as the natural development of the business environment would provide the budget with more taxes.
Question: What needs to be done concretely to solve the problem?
Dmitri Torner: Today, a large-scale assessment of all state-owned enterprises and enterprises with state capital is needed. A broad assessment of state-owned land is also needed. By the way, if there is certain clarity in the case of state-owned enterprises or state quota enterprises, the picture is far from clear for state-owned land. Following this assessment, a number of important decisions will have to be made: which enterprises will remain in state ownership (strategic); which will be privatized (they need to be properly prepared for such a complex and responsible process as privatization); which will be transferred under concession (concessions should not be neglected if we have enterprises that the state, for various reasons, cannot manage efficiently but needs them); which will be liquidated (unprofitable enterprises that cannot be privatized must be got rid of once and for all). Yes, of course, now is not the best time to attract investors who could privatize or take over certain enterprises under concession, but that doesn't mean that the process I talked about above shouldn't be started. Things are moving forward step by step and I am sure that the necessary circumstances will soon be in place that will allow us to talk in more concrete terms about attracting potential investors. But until then we need to do our homework.
My personal opinion is that we will not be able to talk about real economic development in Moldova until we put things in order in the property that is administered by the state, or more precisely: state-owned enterprises, enterprises with state capital and state-owned land.
Question: You are also a supporter of another interesting idea - that the country's development is impossible without a new administrative-territorial reform. What is your belief based on?
Dmitri Torner: In Moldova there are practically no administrative-territorial units operating on the self-management principle. The few exceptions that exist in this regard do not change either the overall picture or the logical conclusion that should be drawn: Moldova needs a genuine administrative-territorial reform, based both on the existing realities and on the specificities of the administrative-territorial units.
What needs to be considered in this respect? First of all, the destructive consequences that the demographic crisis has had and continues to have on the territories. Because of this crisis, we have a large number of localities that remain only on paper or where very few people live. They have virtually no potential to survive, not to mention the fact that they are not able to develop either. Secondly, it is necessary to take into account the territories' capacity for self-management in the short and medium term as a result of concentrating and capitalizing on existing potential. Thirdly, any possible new administrative-territorial reform must take into account people's social needs and social infrastructure, which must be sufficient, accessible and of high quality. Fourthly, ensuring citizens' access to public services must be taken into account. Fifthly, it is necessary to take into account the potential of the current local public administration from the outset, as local public administration reform will have to be carried out in parallel with administrative-territorial reform.
It is obvious that Moldova will not be able to develop unless it carries out such a reform.
Question: Dmitri, your ideas are very interesting and original, but agree that they involve radical approaches. Is Moldova ready for them?
Dmitri Torner: The question should be formulated differently - without radical reforms Moldova has no chance for a decent future. When we understand this and take the necessary steps, real preconditions for the country's development will emerge.
Interview by Boris Harea
https://telex.md/2025/02/11/interviu-dmitry-torner-fara-reforme-radicale-moldova-nu-are-nicio-sansa-la-un-viitor-decent/
