responding to the global economic crisis: moldova’s experience ruslan codreanu - head of the...
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RESPONDING TO THE GLOBAL ECONOMIC CRISIS:
MOLDOVA’S EXPERIENCE
Ruslan CODREANU - Head of the Policy, Strategic Planning and External Aid Department, State Chancellery of the Republic of Moldova
Regional Policy Roundtable in Eastern Europe and Central Asia on Economic Crisis Responses from a Governance Perspective
Chişinău, Republic of Moldova6-7 July 2010
Crisis for the Republic of Crisis for the Republic of Moldova was…Moldova was…
1) A process recorded since September 2008 with negative economic and social impact
2) A result of the crisis in the financial and public policy management, promoted by the previous Government
3) Opportunity for a new approach for the development of the country, proposed by the new Government
How we went through the How we went through the year 2009!year 2009!
Economic decline was -6.5%
Remittances fell by about 30%
Foreign direct investment fell 6 times
The general government deficit increased 7 times
Stagnation of the important sectors of the economy
Number of unemployed persons increased 1.7 times (including the returned migrants)
Either…or…Either…or…
I. Status-quo Postpone imperative reforms because of
insufficient financial means (fiscal policy, public expenditures, education, social security, etc.)
Continue money allocation without due efficiency analysis
II. Take attitude Initiation of imperative reforms Increase public expenditure efficiency
through reduction and redistribution Release of additional foreign aid in order to
implement urgent public policies and contract the public budget deficit
2 scenarios of economic 2 scenarios of economic revival:revival:
100
92 9295
100
106100
9295
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110
2008 2009 2010 2011 2012 2013
GDP Forecast
without an anticrisis plan with an anti-crisis plan
ESRP based on 3 pillarsESRP based on 3 pillars
KEY PRINCIPLES
Equity Multiplier effect
Efficient public sector
Participative process
As a result in the 1Q of As a result in the 1Q of 2010:2010:
GDP +4.7%
Consumer Price Index +5,5 %
General public deficit (neg.) +18.2%
Trade balance (neg.) +12.3%
Average wage (real terms) + 0.9%
Fixed capital investments – 23.4%
Here we are!Here we are!
September 2008September 2008
20092009
2010, without ESRP2010, without ESRP
2010, with ESRP2010, with ESRP
Next steps…Next steps…
Strengthening government capacity to provide high quality public services
Effective management of public spending towards sectors with growth potential and to the most vulnerable persons
Increasing internal growth potential based on investments, modern technologies, innovations, sustainable development
Development of communication infrastructure Stimulate demand for new products,
technologies, services Developing public - private partnerships:
Business - Science-Government-Civil Society Developing skills for the new knowledge-based
challenges of the global economy