Assessing Competitiveness In Moldova's Economy - Economic Growth
Assessing Competitiveness In Moldova's Economy - Economic Growth
Assessing Competitiveness In Moldova's Economy - Economic Growth
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Development Alternatives, <strong>In</strong>c. / BIZPRO Moldova Moldova <strong>Competitiveness</strong> Assessment<br />
Quality assurance and standards compliance<br />
Moldova’s systems for ensuring and certifying compliance with quality standards are complex<br />
and have yet to evolve to meet the needs of global markets. The quality architecture is still<br />
shaped primarily by the needs and requirements of the traditional markets in CIS countries,<br />
which adhere to the same GOST standards (based on the Gosstandart agency of Russia) and<br />
recognize the Moldova Standard (MS) mark. <strong>In</strong> addition, Russia recognizes several test<br />
laboratories and certification bodies in Chisinau for specific products that require further testing.<br />
The MS mark is not recognized anywhere else in the world. Moldova has adopted some 200<br />
international standards, but its testing and certification institutions are not recognized<br />
internationally. As long as Moldova’s exporters to the West rely on or work through foreign<br />
partners, compliance with applicable standards is their responsibility, but improvements in the<br />
country’s quality infrastructure are essential for moving into higher value-added exports.<br />
Transport and logistics<br />
There are no Moldovan companies that offer more than one transport mode, plus cargo handling, and<br />
related information services. There are three types of road transport (trucking) service providers:<br />
(1) operators with multilateral permits that allow them into Europe, with some equipment<br />
complying with EURO standards; (2) operators with aging equipment for CIS and non-EU<br />
markets, using bilateral permits; and (3) domestic operators with obsolete equipment. Excess<br />
capacity is endemic in the latter two, yet service levels are inadequate. As a result, a significant<br />
proportion of exporters and producers operate their own trucks—40 percent of respondents in a<br />
recent survey.<br />
Railroad connections are oriented mostly toward the east, and incompatible gauges (Russian<br />
versus European) complicate the task of serving as a hub. Railroad freight rates are relatively<br />
high, and shipments to the east are reportedly subject to pilferage. Airfreight activities are<br />
limited, partly because Moldova is close to its markets, and partly because most of its exports<br />
have a relatively low value-to-volume ratio. Air cargo handling is a monopoly of the airport in<br />
Chisinau, and existing cargo airlines do not provide reliable service.<br />
Financial services<br />
Currently, 16 banks are operating in Moldova, with limited assets and activity levels. While<br />
several banks have foreign investors, there is no foreign bank operating in Moldova, in part<br />
because the Moldovan authorities have imposed restrictions that make it almost impossible to<br />
manage a financial institution according to internationally accepted principles. The structure of<br />
the banking sector provides inadequate support to international trade, and hampers the<br />
development of market institutions needed to forge effective value chains, in particular those<br />
involving small and medium-sized enterprises. Strengthening the financial sector and introducing<br />
new financial products and services will be critical for building competitiveness in the Moldovan<br />
economy. One particular target for development is leasing, which could help alleviate the often<br />
desolate situation in the transport sector, and could also contribute to a “re-mechanization” of<br />
agricultural production.<br />
July 2004 • Draft Page 9