Moldova flags up EU aspirations to attract foreign investors

Newsroom 03/10/2011 | 14:36

The Republic of Moldova’s economy grew by 6.9 percent last year and another 7.5 percent in the first semester of this year, convincing an increasing number of European companies to place the country on their investment map. Participants in the first Moldova Business Forum organized last week by BR discussed opportunities in Moldova and ways to increase investment flows between the two countries.

Simona Bazavan

“The Republic of Moldova is definitely a destination for investments. Not for those looking to invest hundreds of millions or billions of euros but for those with small and medium sized companies,” said Ion Sturza, president of GreenLight Invest private equity fund and former prime minister of the Republic of Moldova.

Among the reasons to invest on the right bank of the Prut river, he mentioned the fact that Moldova is a developing and fast growing economy, strategically positioned between the European Union and Community of Independent States. In the present economic crisis, Moldova has become an even more attractive destination alternative for foreign investors in their search for cost optimization, Sturza argued.

Present at the event, Iurie Renita, the Ambassador of the Republic of Moldova to Bucharest, said that now was a good moment to invest in the state, stressing the country has a clear EU agenda. Addressing some companies’ concerns over the political stability in Moldova, Renita said that the business environment there was safe and there were plenty of guarantees.

Progress has been made in the last two and a half years since the Alliance for European Integration came to power and bilateral relations between the two countries have become normal, said Renita. Economic relations, however, are lagging behind, with the volume of bilateral investment flows reaching similar levels.

While agreeing that the Republic of Moldova is not lacking in business opportunities and adding that he himself has invested there, Mihai Ionescu, general secretary of the national association of exporters and importers (ANEIR), said that there is still progress to be made. “This is not a reproach for the authorities in Chisinau. Trust is essential to encourage business and trust is presently being undermined by some actions and behaviors by public workers and the Moldovan authorities. Certain development phases have to be reached. This is a long-term process and the same has happened in Romania,” he said.

One of the most notable Romanian investors in the Republic of Moldova is Banca Comerciala Romana (BCR), which opened a subsidiary there in 1998. Vitalie Arvinte, head of marketing, communication and the community department with BCR Moldova, said that there are several sectors that attract foreign investments to the Republic of Moldova. Industries that fuel foreign trade as well as those producing for the internal market are especially attractive, Arvinte added. Moldova’s exports increased by about 64 percent in the first semester and imports went up by 40 percent, he noted.

There are also industries where investors encounter difficulties, such as in developing new real estate projects. Obtaining all the necessary building permits takes a very long time and is also costly, explained Arvinte. While it is easy to set up a new business in the Republic of Moldova, closing a company can also be time consuming, he added.

Most of the economic activity in Moldova, about 70 percent, is centered around its capital, Chisinau. Present at the event, Gabriela Ciumac, head of Chisinau City Hall’s foreign relations, regional cooperation and European integration division, outlined several projects where the local authorities hope to attract investments through PPPs or concessions. These focus on providing public services such as sewage, public lighting and solutions for the arrangement of the city’s many parks and lakes. Investors were also encouraged to consider the private medical services industry – about 80 percent of the medical services in Chisinau are provided by the state – and social residential projects.

The Moldova Business Forum was organized last week at the Capital Plaza Hotel in Bucharest and attended by about 50 participants. The event was sponsored by BCR and organized with the support of the Embassy of the Republic of Moldova to Romania and the Chamber of Commerce and Industry of the Republic of Moldova.

simona.bazavan@business-review.ro

Iurie Renita,Ambassador of the Republic of Moldova
“I would like it very much if Romanian companies were more active in investing in the Republic of Moldova”

Gabriela Ciumac ,head of the City Hall’s foreign relations, and EU integration, Chisinau
“Next year we hope to set up a trolleybus assembly factory in Chisinau, the first of its kind, which will create additional jobs”

Mihai Ionescu,secretary of ANEIR
“Bilateral agreements are a positive political message but this has to be reinforcedby more business partnerships”

Ion Sturza,president of GreenLight Invest
“Moldovan companies have invested more in Romania than Romanian ones in Moldova and the latter continue to be reluctant about investing here”

Vitalie Arvinte,head of marketing, communication and community, BCR Moldova
“It is quite easy to set up a new company in the Republic of Moldova and the related costs are low”

Lilia Russu,Counsellor of economic affairs with Embassy of the Republic of Moldova
“Moldova is presently undergoing a full process of reconstructing and modernizing its transport infrastructure”

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