Development Priorities of Moldova in the Sphere of Poverty Reduction (2013)

A diagnostic analysis of the constraints to economic development highlights the critical issues, i.e. domains in terms of which Republic of Moldova is largely surpassed by comparable countries. This approach1 has been applied successfully in several countries, such as Brazil, Egypt, Bolivia, and Mongolia. Essentially, as long as the critical issues remain unresolved, the investment potential of the national economy cannot be fully realized. It is necessary to remove these investment-suppressing barriers as a matter of priority in order to change the country's development paradigm. 

On these lines, four critical issues were identified: education, roads, access to finance, and business environment. Following a consultative process, the Government established major problems that, once solved, will contribute greatly to ensuring economic growth and poverty reduction. Hence, the experience of an inefficient judicial system endangers the development of all areas, affecting seriously both the business environment in the country and the investment process. Other two priorities, solutions to which can be found during the implementation timeframe of present Strategy and which have direct impact on the poor, are: consumption of energy resources and pension system. Health was identified as one of critical problems which leads to reduction of labor force and to a decrease in labor productivity, but its solving is possible by including health aspects in all long-term development priorities. As long-term strategic objectives, the National 

Development Strategy "Moldova 2020" is focused on the following development priorities: 

  1. Aligning the education system to labor market needs in order to enhance labor productivity and increase employment in the economy; 
  2. Increasing public investment in the national and local road infrastructure, in order to reduce transportation costs and increase the speed of access; 
  3. Reducing financing costs by increasing competition in the financial sector and developing risk management tools; 
  4. Improving the business climate, promoting competition policies, streamlining the regulatory framework and applying information technologies in public services for businesses and citizens; 
  5. Reducing energy consumption by increasing energy efficiency and using renewable energy sources; 
  6. Ensuring financial sustainability of the pension system in order to secure an appropriate rate of wage replacement; 
  7. Increasing the quality and efficiency of justice and fighting corruption in order to ensure an equitable access to public goods for all citizens. 

The focus of this Strategy is to produce a social and economic impact on each of the above-mentioned dimensions. The cumulative effect of solving the addressed problems lies in removing the critical barriers that prevent the optimal use of resources. This approach makes it possible to prioritize areas of state intervention and subject them to a clearly defined objective of the Strategy: ensuring qualitative economic development and, implicitly, poverty reduction. 

The Republic of Moldova will undertake all the necessary efforts to ensure the transition to a green economic development, which promotes sustainable development principles and contributes to poverty reduction, including by ensuring a better governance in the sustainable development domain, by integrating and strengthening environmental protection aspects in all social-economic development domains of the country. 
A determining factor in the successful accomplishment of identified priorities and achievement of the main objective is the existence of efficient and modern state institutions. Acceleration of institutional reforms and strengthening of capacity of public authorities will address each identified priority. Increased quality of public services through modernization and greater transparency and accessibility are inherent during Strategy implementation process.

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