Assessing Competitiveness In Moldova's Economy - Economic Growth

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Development Alternatives, Inc. Moldova Competitiveness Assessment: Quality Assurance Infrastructure Introduction QUALITY ASSURANCE INFRASTRUCTURE An effective and efficient quality assurance infrastructure is a prerequisite for economic development in any country. Global trends—the unification of markets; global industrial integration, including relocation of production and outsourcing; increasing demand for higher quality; and environmental protection—are increasingly becoming dominating factors in the strategic thinking and design and implementation of economic development policies at the national level. In this world, a harmonized and internationally recognized quality assurance infrastructure is one of the key elements shaping the competitiveness of a country’s economy, for it facilitates the exchange of goods and services in an efficient, timely, and economic manner, reducing the overall cost of doing business with economic agents in that country. The basic elements of a quality infrastructure are standardization, metrology (the science of measurement), conformity assessment, accreditation, and market surveillance. Planning for and developing these elements is a matter of national economic development strategy. Establishing the organizational entities, developing their service capacities in strategic national sectors, and ensuring the ability of this infrastructure to adapt quickly to changes in target markets and global trends comes about only through careful planning supported by knowledge of international best practices and requirements in this field. These basic elements are like links in a chain. If one element comes up short in its overall operational capacity or in its ability to serve the needs of a given sector, the impact on overall trade and that sector’s performance is easily felt in reduced exportability of goods and reduced proceeds. An effective quality infrastructure is also necessary to safeguard the safety and health of citizens, protect the health of animals and plants, and protect the environment. Technical regulations and enforcement mechanisms, including market surveillance that ensures the safety of goods, services, and facilities, are key to meeting these needs. To the extent that these technical regulations reflect internationally harmonized standards, the infrastructure of laboratories and certification schemes aimed at domestic constituencies also facilitates trade and encourages foreign direct investment (FDI). As a transition economy, Moldova has a quality infrastructure designed to meet the current market entry requirements of CIS countries, but faces many challenges in being recognized by countries outside the CIS. This lack of recognition acts as a barrier to export for many Moldovan products that could be competitive in the EU, the United States, and other countries around the world. July 2004 • DRAFT Page 1
Development Alternatives, Inc. Moldova Competitiveness Assessment: Quality Assurance Infrastructure Quality Assurance Infrastructure of Moldova The Moldovan quality infrastructure is complex and fragmented, making it difficult to adapt to changes in target market entry requirements. However, it is evident that the Moldovan government has taken some concrete steps to reform this structure. Actions include regulatory reforms and initial steps to reorganize its quality infrastructure institutions. Regulatory reforms include a new (April 2003) law on conformity assessment and accreditation to comply with international requirements and best practices. The relevant standards include (1) requirements of the World Trade Organization (WTO) agreements on technical barriers to trade (TBT); (2) sanitary and phytosanitary standards—the application of food safety and animal and plant health regulations—(SPS); (3) the European Union’s new approach model for standards and technical regulations; and (4) and the global approach on conformity assessment. A new law on market surveillance is currently in the drafting stage. This new law lays the foundations for improving market surveillance and eliminating some of the overlapping functions of the different inspection agencies active in Moldova. However, progress is very slow and does not seem to keep up with the pace of changes in global market architectures. The pace has been particularly sluggish in implementing new laws. The main bottlenecks have been the complex and fragmented structure, and the lack of resources where they are most needed. Structure The organizational chart on the next page presents a simplified layout of the quality infrastructure institutions of Moldova. The chart does not show all of the ministries that have their own certification bodies and inspectors. There are seven such ministries, including the ones shown in the chart. In most cases the certification bodies under these ministries are registered as state enterprises. Many of the certification bodies also own the required testing labs. According to the Law on Standardization, 3 the various ministries are required to develop standards in their own area of expertise. Furthermore the Law on Conformity Assessment, 4 together with government decision 702, authorizes and defines the responsibility of each ministry in adopting technical regulations. 3 Law on Standardization No. 590 of 22.09.1995 was amended by Law No. 919-XIV, 12.04.2000. 4 Law on Conformity Assessment No. 186-XV, 24.04.2003. July 2004 • DRAFT Page 2
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