Transcript Moldova Trade Study comprises four notes

Moldova Trade Study:
Overview
Ruslan Piontkivsky
Chisinau, Moldova
February, 29th 2016
Moldova Trade Study comprises four notes
1. Analysis of Trade Competitiveness
2. Is the DCFTA Good for Moldova? Analysis of Moldova’s
Trade Policy Options
3. Competitiveness in Moldova’s Agricultural Sector
4. The Performance of Free Economic Zones in Moldova
Why these four notes?
1. Analysis of Trade Competitiveness
Core diagnostics, based on Trade Competitiveness Diagnostics
Toolkit of the WB
2. Is the DCFTA Good for Moldova? Analysis of Moldova’s Trade Policy Options
Most important medium-term trade policy challenge
3. Competitiveness in Moldova’s Agricultural Sector
Agro-food is the largest export item, also key for employment,
poverty and GDP volatility
4. The Performance of Free Economic Zones in Moldova
Key factor explaining recent trade dynamics
Key Message across notes:
Major obstacles for export-driven growth are at
home, so more dynamic expansion of exports
depends on reforms within Moldova
Exports growth lagged behind regional comparators, as trading
costs, including provision of backbone services and ‘corruption
tax’ are high
Merchandise Exports Performance, 2000-2013
Productivity Losses Associated with Corruption
1000
Bribes courts
900
0
800
-0.01
2000=100
700
600
-0.02
500
-0.03
400
-0.04
300
200
-0.05
100
-0.06
0
-0.07
Moldova
Belarus
Ukraine
Albania
Slovakia
Hungary
-0.08
Bribes customs
Corruption perceptions
DCFTA seems superior to other trade policy options, but the
largest benefits could come from trade facilitation and
investment attraction, not from the tariffs reduction per se
GDP Impact of Trade Policy Options Relative to
Baseline, in p.p.
Decomposition of DCFTA Gains, in p.p. of GDP
Key to maximizing gains from the DCFTA with the EU is to
enhance Moldova’s agricultural competitiveness to ensure
access of its agro-food products to the EU market
• enhancing production processes by using fertilizers and pesticides
appropriately;
• increasing quality through improving harvest and post-harvest
processes and infrastructure;
• supporting producers’ learning and understanding of product
characteristics demanded in end markets; and
• supporting organic farming as a way to differentiate products and
compete in high-value added market segments.
Some FEZs recorded strong static gains, but have not
contributed to dynamic spillovers so far
Recommendations for development of
the zones:
Recommendations for the rest of the
economy:
• Downgrade fiscal incentives and
shift to targeted service delivery
• More power to the regulator and
resident appointed administrator
• One-stop-shop mechanisms for all
necessary approvals and licenses
• Monitoring and assessment
mechanism of incentives
• Integrate and replicate best
practices observed in the zones
• Develop technical and support
services to encourage clustering
and networking
• Extend the privileges and the
concept of the Authorized
Economic Operator