In order to support the private sector to overcome the current crisis, the state should intervene through measures to reduce indirect costs such as excessive bureaucracy, corruption, the low quality of the public service, but also to reduce unfair competition and improve the quality of dialogue between state institutions and the business environment. These are some of the conclusions of the round table "Economic resilience in times of crisis: business concerns regarding managing the effects", held on June 16. The event was organized by the Center for Entrepreneurship and Economic Policies (CAPE), with the support of the International Center for Private Entrepreneurship (CIPE).
"The expertise of our analytical center contributes to the development of the private sector by identifying and transposing Moldovan business priorities into public policies and strengthening the public-private dialogue", said the director of CAPE, Tatiana Lariușin.
And Natalia Oțel Belan, regional director for Europe and Eurasia emphasized: "The identification, through a positive partnership, by the private sector of the problems and solutions of the current crises will contribute to the creation of a sustainable economy and democracy".
The round table addressed the main conclusions of the report: Economic resilience in times of crisis: business concerns regarding managing the effects of the crisis. The publication, signed by Ion Butmalai and Veronica Russu-Marin, program directors within CAPE, presents the perception of the private sector about anti-crisis measures and details the solutions in the view of the business environment to mitigate the shocks of the last two years, but also to increase trust in public institutions.
Between April 1-14, 2022, CAPE, in partnership with Magenta Consulting, conducted two surveys on a sample of 107 companies and 24 business associations. In order to confirm and verify the results of the surveys, five focus groups and 23 in-depth interviews were additionally organized. According to the research, the business environment was strongly affected by the recent crises, which amplified the structural problems in the private sector, which were "passed" from one government to another in the last 15 years.
Over 70% of business associations mentioned that they were affected by the effects of the pandemic, 44% of them are dissatisfied with the anti-crisis measures implemented by the Government in the last two years, more than half of the associations are dissatisfied due to the application of the quota reduction measure VAT up to 6% only for the HoReCa sector, and half of the business associations mentioned that compensation for technical unemployment had no effect on their members, the Report said.
On the other hand, 83% of business associations are very satisfied and satisfied with the implementation program of the government digitalization package, 63% - satisfied with the postponement of reporting and tax payments during the state of emergency, and 59% of companies are satisfied eliminating the need for a tax invoice in the case of bank card purchases.
Regarding the war in Ukraine, small and micro companies in our country were the most affected, and more than 40% of companies are willing to cooperate with a Ukrainian company, and more than half of them are willing to hire Ukrainian refugees temporarily in Moldova.
The private sector, in particular, small and micro companies remain concerned about production costs, the decrease in consumption, but also the increase in raw material prices.
"The Moldovan business environment has an increased interest in being part of the reform process and the decision-making process in the country. The large number of initiatives proposed by business reveals a high degree of consolidation and involvement of the private sector in the economic development of the country, and honest businessmen do not only pursue the profit at the moment, but also the way in which the country develops. Therefore, there must be close cooperation between the private sector and the state institutions, and this cooperation should result in measures of a stimulating nature so that the entrepreneur is motivated to stay in the country and contribute to the economic development of the Republic of Moldova", mentions Ion Butmalai.
For her part, Veronica Russu-Marin believes that "Among the main challenges are, on the one hand, the decrease in economic activity due to pandemic restrictions, the increase in energy resource prices and logistics costs, and on the other hand, systemic corruption, the lack of labor due to migration, but also unfair competition. The economic shocks against the background of the change of government, the electoral processes, but also the high expectations of rapid reform created conditions that amplified the mistrust of businessmen in state institutions".
During the round table, the findings of the report were discussed together with the representatives of the public authorities and the business environment of the Republic of Moldova.
Present at the event, Roman Laduș from the Economic Council mentioned: "On the regulatory side, we created a roadmap for SMEs and planned to review the state control and sanctioning system, we thought of a system simplified for the small business and when capitalizing on the digitization package".
According to Silviu Neghină, deputy head of the Business Environment Development Directorate at the Ministry of Economy, the institution is in the process of developing the National Program for promoting entrepreneurship and increasing competitiveness for the years 2022-2026, and among the priority directions of the Program is the improvement of the normative framework regulating the activity of small and medium-sized enterprises and increasing the access of enterprises to financial resources.
Marcela Lozovanu, director of the Light Industry Employers' Association: "Manufacturers need modernization, digitization, new technologies, machinery, software, and unfortunately the demographic crisis is the most important in our sector. The young people who stay to work want a modern factory, good working conditions and competitive wages".
At the same time, Nicolae Tîltu, head of the strategic development department at the National Farmers' Federation of Moldova, emphasized the importance of public-private dialogue: "We are trying to have a dialogue with the authorities, to come up with concrete proposals and clear solutions for farmers. But not all the time we propose is on the agenda of the authorities. We need political will, new approaches and markets".
"If we are heard by the government, things will change immediately. The government must listen to the real sector", added Ion Stratulat.
At the same time, Alexandru Bădărău, the president of the Association of Lavender Producers from Moldova proposes the following measures: "Only together will we be able to create a stronger voice. For that, we need to focus our efforts on local security, business competitiveness and supporting local entrepreneurs. We also propose the creation of a digital communication platform".
In order to support the development of the private sector in Moldova in the conditions of the current crises, the authors of the report formulate a series of recommendations. The most important actions include streamlining the public service by minimizing the costs borne by the private sector due to bureaucracy, improving the quality of public-private dialogue to stimulate inclusive economic development, establishing mechanisms to support entrepreneurial capital, developing renewable energy investment subsidy programs, creation of the Entrepreneur's Lawyer institution, which would ensure respect for entrepreneurs' rights, etc.
In the period 2020-2022, the Government of the Republic of Moldova approved a series of measures to reduce the effects of crises on the business environment.
The Center for Entrepreneurship and Economic Policy (CAPE) is an independent analytical center whose mission is to support the development of democracy and a functioning economy through public policies focused on the development of the private sector and the stimulation of private initiative. Through this, CAPE supports the participation of the business environment in the democratic process, the promotion of well-structured public-private dialogue, offers support to associations through expertise, facilitating the introduction of international anti-corruption and conduct standards, training and knowledge transfer.
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