Chapter 2.3 Economic and social reform and development
No. / ObjectiveThe measure from the AP / Implementation / Responsible institution
Actions undertaken
Improve Welfare
(17) / Implementation of significant measures to address poverty, notably by improving targeting and effectiveness of social assistance
1. Adopt and progress in implementation of the Economic Growth and Poverty Reduction Strategy Paper (EGPRSP), identifying short term and long term priorities, endorsed by international donors based on the three pillars of poverty reduction identified in the I-PRSP of 2002; in particular implement relevant requirements on Poverty Alleviation and on Social safety net agreed within the framework of the EU Food Security Programme. / In December 2004, Parliament of the RM approved the Strategy for Economic Growth and Poverty Reduction (EGPRSP 2004 – 2006).
In order to extend EGPRSP for 2007, was approved the GD nr. 1433 as of 19th of December 2006, thru ought which were approved the modifications to the Annex 5 „Monitoring Indicators of the EGPRSP implementation”, Annex 6 „Policy matrix/Action plan” and Annex nr.7 „Indicative costs of the priority actions foreseen in EGPRSP” all of them being updated in accordance with 2007 priorities. Reports on implementation of EGPRSP can be accessed on
In order to ensure the continuity of the reforms implementation, there was initiated elaboration of a new document of strategic planning for mid – term „National Development Strategy” of the RM for the period 2008 – 2011 (NDS). In accordance with the GD nr. 1495 as of 28.12.2007, the draft NDS was elaborated, in which were included the main direction for development of the socio – economic sector. On 26.06.2007 was organized the National Forum thru which was lunched the public debate on NDS, the purpose of this action was consultation with civil society in order to optimize the NDS. During this event there were organized workshops with the representatives of civil society.
NDS was adopted by the Parliament on 21.12.2007. The Government approved the Action Plan concerning the implementation fo NDS on 06.02.08. / MET
(18) / Redirect public expenditure to significantly address child poverty and to increase primary school enrolment.
1. Implementation of the relevant requirements on Poverty Alleviation and on Social safety net agreed within the framework of the EU Food Security Programme. / On 27 October 2005 by the Government Decision nr. 1117 was approved “The conception concerning the improvement of the social assistance system” and the Action Plan to increase the efficiency of the providing mechanism of the nominative compensations. (In force since 11.11.2005, the Official Monitor nr. 151-153 of 11.11.2005), with the ultimate legislative modification, in order to pass from categorical principle of providing the nominative compensation to the principle based on the estimation of the average global income reported to a family/person.
Based on the Conception precautions concerning the improvement of the social assistance system and the Action Plan concerning the improvement of the providing mode of nominative compensations, on 27 October 2005 the Government approved the Decision nr.1119 regarding the Pilot - Project concerning the testing of the mechanism of providing the nominative compensations. (In force since 11.11.2005. the Official Monitor nr. 151-153 of 11.11.2005).
To improve the social assistance system and to orientate the social benefits to the poorest families and to implement the Government Decision nr. 1119 of 27.10.2005 regarding the Pilot - Project concerning testing the mechanism of providing the nominative compensations, the pilot project was launched in 4 regions of the country - Soroca, Orhei, Leova and Rascani sector of the Chisinau. Through the pilot-project in the February - October 2006 period have been tested the incomes of 27713 beneficiaries of nominative compensations.
On the basis of the obtained results and of the European experts’ recommendations (formulated in the Sub-committee of RM-EU cooperation for Economical and Financial aspects from January 2007) the Government approved the Program of improving the social assistance system for 2008-2010 years. This Program identifies the problems of the system, objectives, to take the actions which are imposed with distribution of them in stages, discount results and progress indicators.
It was elaborated the project Law concerning the social aid. This project was approved by Government Decision nr. 1328 of 29.11.2007 and now is presented for examination in the Parliament. The aim of the Law regarding the social aid is to ensure a monthly guaranteed income to vulnerable families through offering the social aid on the basis of evaluation of incomes and social assistance needs.
The Regulations project regarding the way of establishing and the payment of social aid is elaborated and will be promoted to the examination and approval in result of Law adoption concerning the Social aid.
The two projects were elaborated by the Ministry of Social Protection, Family and Child with the assistance of experts of the Food Security Program of the European Committee and of the international experts of the Project “The support in providing of some efficient and sustainable social assistance services”, implemented by Every Child /Oxford Policy Management and financed by DFID/SIDA.
Through Republican Fund of social assistance of population, in conformity with the Regulation concerning the distribution of material assistance of the Republican Fund and the local funds of social assistance of population and the way of cashing the supplemental payments in these funds, approved by Government Decision nr. 1083 of 26 October 2000, yearly the material assistance is provided to the families with children of social disadvantaged categories on the World Child Day – 1st of June and on 1st September – the beginning of the school year.
During previous summer holidays seasons 2005 - 2006; 2006-2007 have been elaborated and approved by the Minister order the Programs of measures devoted to World Child Day – 1st of June and in collaboration with Suisse Agency for Development and Cooperation, in 2005 was organized the summer holiday of 320 children (from 20 districts of the republic) of social disadvantaged families, of whom 112 children with disabilities, in Moldova-Noua village, Dubasari district. Thanks to the collaboration established previously between the Ministry of Social Protection, Family and Child and Suisse Agency for Development and Cooperation in Moldova in 2007, has been organized the summer holiday of 80 children of disadvantaged families from Republic of Moldova placed in social institutions, in the medical summer camp from Trogen, Helvetia, for the period 2-16 August, 2007.
It has been approved the Government Decision nr. 346 of 23.03.2005 for approval of amendments and supplements operated by the Regulation on the way of establishing and payment of benefits addressed to families with children (Government Decision nr. 1478 of 15.11.2002), which provides for to increase the lump-sum benefit for child birth and the monthly benefits to nurse the child until 1,5 of age for non-insured persons and until 3 years old for insured persons.
By Government Decision nr. 194 of 21 February 2007 “Concerning the improvement of modifications and supplements which are operated in some Government Decisions nr. 1478 of 15 November 2002” it was increased the lump-sum benefit for child birth for both, insured and non-insured persons.
By Law nr. 363-XVI of 23.12.2005 on modifications of the Law 499-XIV of 14.07.1999 concerning the state social allocations for some categories of citizens with subsequent modifications, have been increased by 30% the allocations for persons with disabilities from childhood and children with disabilities under the age of 16, and increased, by Law nr. 106-XVI of 20.04.07, nursing allocation amount, inclusively for nursing a child with disability with severity degree I.
In line with the Government Decision nr. 181 of 17.02.2006, 3 centers for children ( The center for children who need special education “Speranta” from Criuleni, the Rehabilitation and Social Protection Center for children in situation of risk “Пламъче” from Taraclia town and the Temporary Placement Center for children in situation of risk “AZIMUT” from town of Soroca, passed from the Committee districts/cities administration under the MHSP subordination (at present MSPFC). This centers are used with pilot title for testing the new social services and the elaboration of minimum quality standards for social services in view of subsequent application on a large scale.
In the view of developing the social quality services for child and family, it has been approved by Government Decision nr. 450 of 28 April 2006 “The minim quality standards concerningnursing, education and socialization of the child from the center of temporary placement”.
In the view of preventing the institutionalization it has been adopted the Government Decision nr. 1177 of 31.10.2007 concerning the creation of the Commission for the protection of the child at risk /in difficult situation/ and the approval of the Framework - Regulation of its funsctionning/activity. The main goal of the activity of the Commission for child protection of the child at risk consists in preventing the placement of the children in residential institutions and its recommendation on the most efficient form of protection of the child at risk.
The Ministry of Social Protection, Family and Child jointly with with the representatives of the civil society elaborated the set of minimum Quality standards for social services for family and child, which was presented for discussion and approvel to the Government:
- Standards on nursing, education, and social integration of the child in the Daytime center for children with severe disabilities;
- Standards on nursing, rehabilitation, education and social integration of children in Placement center for children with severe disabilities.
Taking into account the strategic intention of the Government in the process of reorganization and the improvement of the efficiency of social assistance system, to support the persons in extreme poverty, through creation of a group of professional social assistants, which will offer a good social assistance, based on Law of social assistance nr. 547 - XIV of 25.12.2003 and the Government Decision provisions nr. 24 of 10 January 2007 concerning the Employment of social assistants, for 2007 has been approved the employment of 600 units of social assistants, continuing to complete the system of community social assistance network with 535 assistants more.
The social assistants will effectuate the identification, evaluation and will undertake measures to overpass the situations of social risk for families and children at risk, with the involvement of the responsible bodies. At the same time, the Ministry of Social Protection, Family and Child proposes as a goal the implementation at the national level of the Automatic Informational System for Child Protection in the Republic of Moldova, which is elaborated with the support of the UNICEF-EU project. The system mentioned above stipulates the collection and the continued processing of all relevant data about every child at risk: the child statute, the causes of entering the system (inclusively the data concerning the social abandonment, abuse and violence, trafficking and juvenile delinquency), the family composition, the condition of health, the school condition), so that, in case of the successfully operation, this system will contribute essentially to the elaboration of the efficient policies in the field of child protection in the Republic of Moldova. In this context, the Ministry had elaborated the project of Government Decision concerning the creation of the Automatic Informational System for Child Protection in the Republic of Moldova and the approval of the Conception of the Automatic Informational System for Child Protection (which at this moment is under examination and approving process in the Government). / MoH
2. Develop community based child protection measures in particular in the countryside in collaboration with local governments / MoH
MoLPA
3. Rationalise child benefits and improve effectiveness of assistance to families in
Need / MoH
4. Remove factors limiting access to education for poor families’ children and
improve their access to primary and secondary education, in particular in the country side. / MoH
MoED
Sustain growth, consolidate public finance, and address the issue of public debt
(19) / Strengthen economic growth and make it sustainable over the medium term.
1. As a vital step toward sustained economic growth, enhance macroeconomic stability through a sound monetary policy aimed, i.a., at containing inflation and a
fiscal policy aimed, i.a., at achieving debt sustainability. / (detaliled described at p. 19.2, 19.3, 19.4, 19.6 şi 19.8)
On regular bases took place meetings with the representatives of IMF, during which were made assessments on measures for realization of the provisions from the Memorandum concluded with IMF on economic and financial policies
The measure has a permanent character
Tax policy
Tax policy objectives are aimed at ensuring stability and predictability of tax revenues; promoting tax equity and stimulating economic growth.
2005 – Tax policy objectives were elaborated and approved by the Government Decision no.1079 as of 19 October 2005, as part of Medium Term Expenditure Framework (MTEF) for 2006-2008. The Law no.154-XVI on Amendment and Completion of some Legislative Acts was adopted on 21.07.2005 and contains amendments to the Titles I, II, III, IV, V and VII of the Tax Code, laws enforcing these titles, laws regulating taxes and fees that are not covered by the Tax Code.
2006 – Tax policy and tax administration policy objectives were elaborated and approved by the Government Decision no.813 as of 11.07.2006, as part of Medium Term Expenditure Framework (MTEF) for 2007-2009. The Law no.268-XVI on Amendment and Completion of some Legislative Acts was adopted on 28.07.2006 and contains amendments to the Titles I, II, III, IV, V and VII of the Tax Code, laws enforcing these titles, laws regulating taxes and fees that are not covered by the Tax Code. These legislative amendments foresaw the achievement of tax policy objectives for 2007.
2007 - Tax policy and tax administration policy objectives were elaborated and approved by the Government Decision no.756 as of 2.07.2007, as part of Medium Term Expenditure Framework (MTEF) for 2008-2010. The Law no.177-XVI on Amendment and Completion of some Legislative Acts was adopted on 20 July 2007 and contains amendments to the Titles I,
II, III, IV, V,VI,VII,VIIIand IX of the Tax Code, laws enforcing these titles, laws regulating taxes and fees that are not covered by the Tax Code. These legislative amendments foresaw the achievement of tax policy objectives for 2008.
There has been adopted the Title IX “Road taxes” of the Tax Code by Law no.316-XVI as of 02 November 2006 and Law no.317-XVI as of 02 November 2006 for Enforcement the Title IX of the Tax Code, in order to systematize the tax legislation, and Law no.318-XVI as of 20 November 2006 for Amendment and Completion of some Legislative Acts, aiming at adjusting the national legislation to the provisions of the Title IX “Road taxes” of the Tax Code. The purpose of this action is the further development and improvement of national tax legislation
Budgetary sector
Achievements in the budgetary sector comprised the ongoing development of the Medium Term Expenditure Framework (MTEF).
2005-MTEF for 2006-2008 was approved by the Government Decision no. 1079 as of 19 October 2005. It was characterized by advanced and improved analysis and strategic planning of budget expenditures, inclusion of the agricultural sector (accompanied by an explanatory note) and a more extensive involvement of public authorities in programme-based budgeting. In 2005 the development of MTEF was extended to the local level, by including 3 pilot rayons: Orhei, Ungheni and Glodeni.
2006- MTEF for 2007-2009 was developed and approved by the Government Decision no. 813 as of 11 July 2006. It included agriculture as a pilot sector for strategic planning. The process of extending the MTEF to the local level also continued in 2006, comprising 7 additional territorial-administrative units compared to 2005, namely: Chisinau and Balti municipalities, Cahul, Drochia, Edinet, Singerei, Straseni rayons. Currently 10 second-level subnational units are covered by MTEF.
2007-MTEF for 2008-2010 was developed and approved by the Government Decision no. 756 as of 2.07.2007.
In the context of tax and administrative decentralization were set out the competences of local authorities of 1st and 2nd level and they were taken into consideration by the elaboration of the new draft Law on Local Public Finance. The draft Law on Local Public Finance was submitted for review and notification to concerned national central and local institutions, Association of Rayon Presidents and Counsellors, Association of Mayors and Local Communities of Republic of Moldova as well as to European Council experts.
State debt
In public debt management the accent has been putted on the revisal of the legislation and its adjustment to the European and international standards. Having that objective and the support of the Project „Support to Public Debt Management in Moldova”, financed by SIDA, the Law on Public Debt, State Guarantees and State Onlending was elaborated. At the end of 2006 (December 22) the Law has been approved by the Parliament.
The government bonds market was activated and during:
- 2006 were issued medium term state securities: Governments Bonds with a 2 - year maturity term and floating interest rate worth 66,5 mil. MDL;
- 2007 were issued medium term state securities: Governments Bonds with a 2 - year maturity term and floating interest rate worth 117,5 mil. MDL
By the approval of the Law No. 191-XVI as of June 30, 2006 on the amendments of the Law No. 548-XIII as of July 21, 1995 on the National Bank of Moldova the main objective of the National Bank of Moldova has been changed from „to ensure and maintain the national currency stability” to „to ensure and maintain price stability”.
In order to achieve its primary objective, the National Bank of Moldova uses the entire variety of available monetary policy instruments: interest rates on the NBM’s monetary instruments, open market operations, standing facilities, required reserves etc. While performing open market operations both the instruments for the excess liquidity sterilization (the issuance of the NBM Certificates, deposit acceptance, Repo-selling operations, state securities sales from the NBM’s portfolio) and the instruments of banks’ refinancing (Repo-buying operations) can be used.