Lessons from Moldova’s Transition: The Importance of Transparent Public-Private Policy Dialogue
Moldova's Path to Reforms
In April 2009, flawed elections in Moldova triggered the so-called “Twitter revolution,” a wave of public protests made up primarily of young people that put Moldova in the global spotlight. As in the recent uprisings across the Middle East, the sources of Moldova’s widespread discontent were both political and economic in nature. Young people were shocked by the results of the election and suspected fraud since not many of them had voted for the winning Communist Party. Additionally, they were dissatisfied with Moldova’s economic development.
Even after 20 years of independence after the dissolution of the Soviet Union, the Moldovan economy remains very concentrated, monopolized by a few actors, and lacking in independent regulation. More than half of the economy is regulated by institutions that have significant business interests within the sectors they oversee. Young people associate the Communist Party with Moldova’s poor economic performance, and as such their rejection of the fraudulent election results reflects both their political and economic discontent.
Responding to protests, Moldovan officials held an early parliamentary election in July 2009. Four Moldovan parties agreed to create a governing coalition — The Alliance for European Integration (AEI) — that pushed the Communist Party, which had been in power for eight years, into opposition. As the chairman of the Moldovan Parliamentary Committee for Economy, Budget and Finance, I am involved in AEI’s work and responsible in part for shaping many of the policies meant to support the development of a competitive private sector in Moldova.
AEI’s priorities include a broad range of reforms, from Moldova’s integration into the European Union to local institutional reforms. First and foremost, the coalition’s priority is to improve the quality of regulations and to reduce bureaucratic inefficiencies. Many of AEI’s proposed reforms relate to the justice system, which is a key element of a market economy. AEI also aims to reduce the state budget deficit, which now accounts for more than 50 percent of Moldova’s Gross Domestic Product. That goal, however, is secondary to increasing the capacity of government institutions and reducing the influence of the state in the economy. Thus far, the government has been a very negative influence on Moldova’s economic development and that must change.
Dr. Veaceslav Ionita has been a Member of Parliament since 2009 and is currently Chairman of the Parliamentary Committee for Economy, Budget, and Finance. Before he was elected to Parliament, Dr. Ionita was a Senior Economist at the Institute for Development and Social Initiatives (IDIS) ‘Viitorul’, a leading think tank in Moldova. IDIS has been a CIPE partner since 2006, working with a network of business associations and chambers of commerce from across Moldova to engage in a public-private dialogue and promote pro-business reforms. Dr. Ionita is also an Associate Professor for Public Policy and Administration at the Academy of Economic Studies in Moldova.
The views expressed by the author are his own and do not necessarily represent the views of the Center for International Private Enterprise (CIPE). CIPE grants permission to reprint, translate, and/or publish original articles from its Economic Reform Feature Service provided that (1) proper attribution is given to the original author and to CIPE and (2) CIPE is notified where the article is placed and a copy is provided to CIPE’s Washington office.
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