State-owned enterprises, economic millstone

State-owned enterprises situation is serious, while the negative indicators increased year by year, and their managers continue to be paid royally. IDIS experts and IT-Moldova (Transparency International) recommends central authorities to reassess conditions in which the state assets are managed and to create a clear strategy to develop the state-owned enterprise sector.

"There are serious problems in the management of these enterprises. The accumulated losses of state-owned enterprises increased by 1.5 times, and joint stock companies doubled in 2015 compared to 2014. Criteria for the nomination of directors of publicly owned enterprises are not transparent, and positions are held by relatives of dignitaries and politicians. We cannot speak of any meritocratic filtration system of the managerial staff. We have over 400 non-functional state enterprises", explained Ianina Spinei expert Transparency International Moldova.

State enterprises are penetrated by corruption, tax irregularities and suspicious transfers of land and properties under management, but very few enterprises provide sufficient information on their financial status and heritage. Transparency is a luxury that these enterprises not allow. Accordingly, we do not have sufficient data on the names of the managers, budgets, audits, founders and tender contracts. "We have 400 state enterprises that are dysfunctional due to lack of assets, their services are not competitive. The fact they don’t work there is a risk that their assets will be sold illegally", said Spinei.

IDIS Viitorul expert, Veaceslav Ionita says that the state must clearly define in the new law which the goods are prepared for privatization, sold or pledged. Currently, there is a vicious practice to obtain loans from commercial banks, and most times the loan exceeds the asset (currently payables amount to about 15 billion lei). In addition, the expert notes the existence of a conflict of interest. On the one hand, a ministry is responsible for policy development and creation of equal conditions and competition of business, on the other hand, this ministry claims to properly manage some state enterprises in its field surveillance. The clearest example is Moldtelecom, but there are others that confirm this unfortunate practice contrary to free competition and the spirit of functioning market.

"The state must establish a clear and a well thought out strategy on public assets. We have many examples through tricks, managers of enterprises have actually managed to destroy the state-owned enterprises, achieving substantial resources for themselves and their families. The investigation press reported almost weekly about these cases and criminal investigation bodies do not reach perpetrators that compromise by their actions the public sector. Although there is national legislation which provides for transfer of the dividends to the state budget, money is often used to finance elections in favor of ruling parties. There are concerns about the decisions of the amalgamation of state-owned enterprises. An example would be the decision to merge enterprises Civil Service, the State Chamber and the Chamber of Licensing with "Registry" that could create chaos in the system, a chaos convenient to some interest groups. "It is unfair that some tasks that should be accomplished by the state to be reorganized because this creates the risk area, including alienation. We have a lot of reports from CC, indicating serious violations of company and the loans used for lending to businesses”, concluded Veaceslav Negruta, Transparency International expert.

For more details, please contact the Press officer, Victor Ursu at or by phone 069 017 396.

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