{ "title": "Moldova: Back From The Brink, And Getting Better", "publication": "IMF News, September 6, 2017", "sourceUrl": "https://www.imf.org/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better", "canonical": "https://www.imf.org/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better", "overlayPath": "/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better/index.md", "summary": "

Governor of Moldova’s central bank Sergiu Cioclea, and Moldovan Minister of Finance Octavian Armasu talk about how their country weathered the years which led to the IMF program, and what tasks they see remaining before Moldova can solidly stand on its feet again in an interview.", "publishDate": "2017-09-06", "sections": [ { "heading": "Overview", "content": "- Interview with Octavian Armasu, Minister of Finance (since 2016), and Sergiu Cioclea, Governor of the National Bank of Moldova, conducted during a conference on economic governance in Dubrovnik, Croatia, in July 2017.\n- Moldova is described as a landlocked country of 3.6 million, wedged between Romania and Ukraine.\n- The country posted economic growth of 4.1 percent in 2016 and is broadly on track with a $179-million economic reform program supported by the IMF." }, { "heading": "Macroeconomic performance and IMF program", "content": "- Findings:\n - Robust growth of 4.1 percent in 2016.\n - IMF-supported economic reform program valued at $179-million.\n- Role of the IMF program:\n - Restored trust of external development partners and citizens.\n - Helped depoliticize the economic reform agenda and led to passage of important measures and legislation.\n - Provided credibility that aided central bank engagement with prospective international strategic investors in the banking sector.\n- Timeline highlights:\n - First meeting with the IMF in Washington in late April 2016.\n - IMF dispatched a team to Moldova in May 2016.\n - Mission to negotiate staff-level agreement in July 2017.\n - IMF program approved on November 7, 2016." }, { "heading": "Banking sector crisis and reform agenda", "content": "- Crisis context:\n - A 2014 banking fraud triggered a bailout and a political crisis that lasted almost two years, causing loss of access to external financing and loss of political credibility.\n- Central bank response and reforms (actions described by Sergiu Cioclea):\n - Curbing inflation and stabilizing foreign exchange rate expectations.\n - Swift measures to stabilize the banking sector.\n - Imposition of new shareholder transparency and management accountability rules.\n - Promotion of bank recovery and resolution legislation and Basel III-inspired regulation.\n - Nomination of two technocrats as vice-governors to make the central bank’s executive board fully independent from political parties.\n - Promotion of cashless payment systems to increase accountability and tracking of financial flows.\n- Structural objective:\n - Reorient banks to convert a large deposit base into healthy credits to the economy, addressing low financial intermediation and limited credit activity concentrated in large corporations.\n - Attract international strategic investors to accelerate banking sector restructuring." }, { "heading": "Structural reforms and business climate", "content": "- Reforms initiated by the government taking office in January 2016:\n - Major reform of the banking sector.\n - Reform of the pension system.\n - Reform of public administration.\n- Policy priorities to support sustained growth (as stated by Octavian Armasu):\n - Improve business climate to leverage access to the EU market via the free-trade agreement in 2014.\n - Better tax and customs administration.\n - Reduced bureaucracy and a business-friendly approach to state inspections.\n - Human capital development and reform of the education system to build long-term competitive advantage.\n - Reform of the justice system and intensified fight against corruption." }, { "heading": "Anti-corruption and institutional strengthening", "content": "- Core observation:\n - Fighting corruption requires political will and stronger state institutions; weak, oversized, inefficient public administration and underpaid public servants undermine rule of law.\n- Government strategy:\n - Public administration reform is the top priority to address major institutional weaknesses from which other problems arise.\n- Central bank perspective on transparency:\n - Higher transparency in the banking sector, robust anti-money laundering and know-your-customer policies, and strengthened supervision regulations are powerful tools to increase overall economic and societal transparency.\n - Transparency supports “economic democracy,” enabling business access to financing based on business plans and risk profiles rather than political affiliations." }, { "heading": "IMF engagement: experience and perceptions", "content": "- Government and public response:\n - After five governments since November 2014 and a deeply divided society, there was high trust in the IMF’s advice and technical competence.\n - The IMF’s involvement helped depoliticize reforms and enabled passage of needed legislation.\n- IMF’s operational tempo and impact (as recounted by Cioclea):\n - Rapid response: meetings and missions in April–May 2016 leading to program approval on November 7, 2016.\n - The IMF’s speed of response is credited with preventing severe financial problems in 2016.\n - IMF economists were perceived as experienced and reasonable in proposing suitable solutions." }, { "heading": "Key statistics and dates", "content": "- Population: 3.6 million\n- Real GDP growth in 2016: 4.1 percent\n- IMF-supported reform program size: $179-million\n- Banking crisis origination: November 2014\n- Number of governments since November 2014: five\n- Government took office: January 2016\n- First IMF meeting in Washington: late April 2016\n- IMF team dispatched to Moldova: May 2016\n- Staff-level negotiation mission: July 2017\n- IMF program approval date: November 7, 2016\n\nSource: IMF News — Moldova: Back From The Brink, And Getting Better, September 6, 2017.\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Country Focus\n- conference\n- Boštjan Jazbec\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better" } ], "bullets": [ "[Markdown version](/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better/index.md)", "[Structured JSON version](/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better/index.json)", "[Bundle manifest](/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better/bundle-manifest.json)", "Published: September 6, 2017", "Interview with Octavian Armasu, Minister of Finance (since 2016), and Sergiu Cioclea, Governor of the National Bank of Moldova, conducted during a conference on economic governance in Dubrovnik, Croatia, in July 2017.", "Moldova is described as a landlocked country of 3.6 million, wedged between Romania and Ukraine.", "The country posted economic growth of 4.1 percent in 2016 and is broadly on track with a $179-million economic reform program supported by the IMF.", "Findings:", "Role of the IMF program:", "Timeline highlights:", "Crisis context:", "Central bank response and reforms (actions described by Sergiu Cioclea):", "Structural objective:", "Reforms initiated by the government taking office in January 2016:", "Policy priorities to support sustained growth (as stated by Octavian Armasu):", "Core observation:", "Government strategy:", "Central bank perspective on transparency:", "Government and public response:", "IMF’s operational tempo and impact (as recounted by Cioclea):", "Population: 3.6 million", "Real GDP growth in 2016: 4.1 percent", "IMF-supported reform program size: $179-million", "Banking crisis origination: November 2014", "Number of governments since November 2014: five", "Government took office: January 2016", "First IMF meeting in Washington: late April 2016", "IMF team dispatched to Moldova: May 2016", "Staff-level negotiation mission: July 2017", "IMF program approval date: November 7, 2016", "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)", "[PRESS CENTER](http://presscenter.imf.org/)", "[IMF Country Focus](https://www.imf.org/en/news/country-focus)", "[conference](http://www.imf.org/en/News/Seminars/Conferences/2017/04/28/reaccelerating-convergence-in-central-eastern-and-southeastern-europe)", "[Boštjan Jazbec](https://www.imf.org/en/News/Articles/2017/09/06/na091217-slovenias-central-bank-governor-institutions-are-the-people-who-govern-them)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better/index.md", "json": "/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better/index.json", "bundleManifest": "/en/news/articles/2017/09/05/na090617-moldova-back-from-the-brink-and-getting-better/bundle-manifest.json" }, "generatedAtUtc": "2026-09-25T21:09:31.077Z" }