INVESTMENT AND ECONOMIC FORUM. RESULTS

Home INVESTMENT AND ECONOMIC FORUM. RESULTS

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The forum which was held in 2016 became the fourth for Pridnestrovie. And the first three had only investment character so the main goal of previous forums was increase of investment activity in Pridnestrovie.

The fourth forum became investment and economic. First of all, it is directed to studying of an economic situation in Pridnestrovie, the analysis of the reasons which have caused the crisis phenomena and search of offers on stimulation of economic growth. Transition of Pridnestrovie from survival policy to development policy became a keynote of all Forum.

The Chamber of Commerce and Industry and the Ministry of economic development with assistance of the Government of PMR became organizers of the IV Investment and economic forum.

The number of participants of the IV Forum has constituted about 800 people. These are organizers of the forum, representatives of authorities, universities and banks, representatives of the Pridnestrovian entities of small and large business. Also the Forum was attended by 64 foreign participants from 43 organizations of 17 countries of the world (Russia, Ukraine, Belarus, Moldova, Abkhazia, Italy, France, Great Britain, the USA, the Czech Republic, Romania, Sweden, Switzerland, Germany, Poland, Slovakia, Hungary):

- Representative offices of embassies and diplomatic missions: Delegation of the EU in Moldova, Embassy of Russia in Moldova, Embassy of Ukraine in Moldova, Embassy of Germany in Moldova, Embassy of Poland in Moldova, Embassy of the Czech Republic in Moldova, Embassy of Slovakia in Moldova, Embassy of Hungary in Moldova, Embassy of Great Britain in Moldova, Embassy of Romania in Moldova, Embassy of Sweden in Moldova, the U.S. Embassy in Moldova, Representative office of the Republic of Abkhazia in PMR;

- Chambers of Commerce and Industry: Chamber of Commerce and Industry of the Russian Federation, Taganrog interdistrict Chamber of Commerce and Industry (Russia), Chamber of Commerce and Industry of the Republic of Abkhazia, Chamber of Commerce and Industry France-Moldavie, Chamber of Commerce and Industry Moldo-Italia;

- Representatives of foreign government institutions: Representatives of the Ministry of Economic Development of the Russian Federation, Representatives of the Ministry of Industry and Trade of the Russian Federation, Delegation from administration of the Arkhangelsk region;

- International organizations: United Nations Development Program (UNDP); The UN in Moldova; European Union Border Assistance Mission to Moldova (EUBAM); NP National Institute of Technical Regulation, Moscow; institute of Development and Social initiatives  “Viitorul”, Chisinau; project “Improvement of Water Resources Management, Infrastructure”, GIZ Chisinau; Center of strategic researches and reforms, Chisinau;

- Foreign commercial organizations: CJSC TRANSPROJECT Group, Moscow; JSC Arkhangelsk Investment Company, Arkhangelsk (Russia); LLC Turnkey solutions, Rostov-on-Don (Russia); LLC Megashop, Bryansk (Russia); PricewaterhouseCoopers (PwC) in Moldova; LLC Exhibition Company LEON, Odessa (Ukraine); LLC Niva Krivbass, Kryvyi Rih (Ukraine); National association of milk and dairy products, Chisinau (Moldova); GFA Consulting Group GmbH project (Moldova).

Forum program was very eventfull.

The international scientific and practical conference “Investments and economy: problems and prospects of growth in the conditions of PMR” became the first event, organized on May 12 at Pridnestrovian State University. The scientific articles prepared within conference have been printed in the special collection. They have mentioned actual aspects of fiscal regulation in the conditions of crisis, investment realities of Pridnestrovie, a problem of social investments, and also profitability analysis and solvencies of industries of a national economy of Pridnestrovie.

At the plenary session and five discussion platforms organized on May 19-20, foreign specialists, representatives of the government and business community of Pridnestrovie looked for ways of an exit out of the current crisis situation.

Problems and possibilities of an entry of the entities of Pridnestrovie into the European markets and the markets of the Euroasian economic union have been considered; pros and cons of the operating tax system and objective need of transition to classical tax system; features of investment attraction in the conditions of crisis and the first initiatives of creation of science and technology parks and projects of public-private partnership; a condition of business climate of the republic and possible ways of economy activization through support of entrepreneurial activity; the analysis of national system of technical regulation, strategy of its development on the basis of harmonization with the best international systems is offered. Russian experts have shared experience of activities of institutes of business ombudsmen and the operating mechanisms of small and medium entrepreneurship support in the Russian Federation.

Also in the first day of a forum the exchange of business contacts has been organized – businessmen from the different countries could communicate to representatives of the entities of our republic. Perhaps, it will serve as an impulse to development of external trade and economic relations of Transnistria. The greatest interest of foreign participants has caused the Pridnestrovian sturgeon complex Akvatir. Also foreign entrepreneurs have communicated to a management of “Elektromash”, “Tiraspoltransgaz”, “Kamensky Kolos”, “Kamensk cannery”, companies “Rist”, “Vetryak”, “OST-Merkury” and others.

Within the Forum there were also other events:

1) exhibition of investment potential of the regions of Transnistria;

2) meeting of foreign participants with a republic authorities;

3) round table on a public-private partnership perspective with Vitaly Maximov, chairman of the board of directors, CJSC TRASPROJECT Group;

At the forum agreement on cooperation and partnership between Chamber of Commerce and Industry of Pridnestrovie and Chamber of Commerce and Industry Italy Moldova has been signed.

UNITY FOR THE CRISIS REASONS

In the course of discussion at plenary session “Pridnestrovie in conditions of crisis: from survival policy to development policy” the assessment of state of Pridnestrovian economy has been given, basic reasons of crisis proceeding from which participants of discussion have made strategic and tactical recommendations as “recipes” about an exit from the crisis state have been noted.

General strategic vision of the directions of reaction:

1) rebalancing of trade relations in the foreign markets via mechanisms of monetary policy;

2) recovery of economic activity in the domestic market via demand increase mechanisms;

3) upgrade of the tax system in direction of ensuring compliance to an environment of the international markets, and also adequacy of the tax load of economic actors in different fields of activity;

4) improvement of business climate (investment attractiveness) and on this basis giving a new impulse to development of entrepreneurship and agricultural industry;

5) development of new forms of investment attraction such as PPP, industrial parks, master planning, placement of production capacities, development of large investment projects by the state departments, forming of a guarantee fund of investment attraction;

6) upgrade of technical regulation system for ensuring growth of a technological level of all economy and safety of consumers of the imported and own products;

7) acceptance of strategy (program) of social and economic development of Pridnestrovie.

Tactical tasks to overcome the crisis:

1)   decrease in administrative barriers for business activity;

2)   practical steps on support of own producer and on accomplishment of the import substitution program;

3)   initiation of institute of the business ombudsman;

4)   development of the program of inflation control in case of forced devaluation of ruble;

5) adjustment of tax rate for income in separate industries where the tax load has led to washing away of current assets of the entities.

DEVELOPMENT OF FOREIGN NARKETS

In view of an export orientation of Pridnestrovian economy the subject of the foreign trade relations is the most important in scope of crisis processes in Pridnestrovian economy. Therefore discussion on the subject “Problems and Prospects of Development of the Foreign Markets for Export of Products of Pridnestrovian Entities” became one of the most active. Experts have noted that over the past few years the structure of Pridnestrovian export has a little changed: We began to sell to Moldova and the European Union more, Russia –  much less, Ukraine – approximately as much. At the same time following the results of last year Moldova (49% of the total amount of export) and Romania (15%) remain the main partners. About only 8% are the share of Russia and Ukraine.

During crisis of 2014-2015-2016 there was a real threat of loss of the markets for our producers for several reasons:

1. Loss of competitiveness because of currency devaluation in the countries of export to US dollar.

2. Domestic policy of currency regulation.

3. Initiation of insurance system of credit risks by banks.

4. Unfairly high financial load of separate industries of economy.

5. Lack of a legal bank system in Pridnestrovie as integral part of a world bank system.

6. Investment policy in the republic.

7. Customs regulation between Moldova and Pridnestrovie.

 TAX SYSTEM

At the forum one of the hottest discussions has run high around the tax system of Pridnestrovie. Carrying out tax reform – a necessary measure for decrease in a budget deficit, this is the requirement of market economy. The consensus of all speakers of a discussion platform “The tax system as an important factor stimulating the country’s economy” was it. The attention of all speakers has been focused on shortcomings of the operating tax system and on problems which can arise upon transition to “classical” system.

The reformed tax system shall provide equitable sharing of the tax load between different groups of taxpayers and stability of receipt of the tax income in the budget, to stimulate business development and economies. For this purpose it is advisable to carry out a comprehensive assessment of the possible effects of the tax reform and its impact on different sectors, groups of enterprises and budget and choose the best option of reforming the tax system.

  1. The discussion revealed serious divergences of views on the ways of reforming tax system. Two basic views on the reform were identified:
  2. Transition of entire national economy to the classical tax system, i.e. collection of taxes to income, to property and to value added. At the same time the main disputes were around the VAT. Most of participants specified problems and difficulties which this tax can cause. When entering the VAT questions of normalization of trade relations with Moldova shall hold a specific place – the tax issues in case of implementation of goods exchange transactions between conflicting parties can stimulate mutual trade, but can become also an absolute obstacle.
  3. Search of opportunities of implementation of the taxation excluding VAT. It was offered to leave also operating system, but to establish fair rates of a tax on the income of the organizations. In this case there is unresolved question of customs duties’s cancellation on the goods imported from the countries with which there is a free trade regime practices.

 INVESTMENT ATTRACTION

Questions of investment policy of the country in conditions of crisis, experiment of the Russian Federation on PPP projects implementation, the concept of creation of science and technology parks and project implementations of PPP in Pridnestrovie were discussed at the discussion platform “Modern technologies to attract foreign and domestic investment into economy of the Republic. Public-private partnership – new opportunities for business development and investment attraction”.

Special attention has been paid to questions of interaction between the state and private investors for creation and improvement of infrastructure on the basis of the PPP mechanism. At the moment within improvement of the investment climate and revival of investment processes by the state the first steps promoting implementation of the above-stated tools are taken. The ministry of economic development and the profile ministries at the Forum have provided concepts of creation of the science and technology parks and the PPP projects planned for implementation in the territory of Pridnestrovie as pilot concepts.

Speakers of the platform have made the offers directed to increase in investment activity in Pridnestrovie such as:

  • development together with the Russian Federation of “Strategy of investment and innovative development of Pridnestrovie” for 5-7 years;
  • taking measures for preserving the foreign investment business which is already functioning in the republic;
  • creation of “the client center” for support of personal contacts of the investor;
  • development of mechanism of the state guarantees for investors;
  • contribution to formation and development of PPP institute.

BUSINESS-ENVIRONMENT

Brisk discussion was developed also on the subject “Improving the Business Environment and support entrepreneurship — the key to investment and economic growth of the Republic”.

Participants have discussed a condition of business environment of Pridnestrovie and a possibility of economy activization through support of entrepreneurial activity, and also efficiency of overcoming of the crisis phenomena in economy through a financial support of SME. More than once it has been noted that the business climate in Pridnestrovie is influenced by both negative factors, and positive ones. Unacknowledgment, blockade measures undertaken by the neighboring Moldova and Ukraine, and also internal instability, in particular, concern to the first. Among positive sides have been called: a comfortable geographical position (proximity to the Black Sea ports and passing through the territory of the republic of one of the transeuropean transport corridors); fine climatic conditions together with fertility of local soil; availability of potential production together with the competent personnel.

It was noted that the state provides considerable support to entrepreneurs. Also in the course of the discussion it was noted that, thanks to funds of the Russian Federation, state support to entrepreneurs in the form of soft loans for the development of agro-industrial complex of small business.

TECHNICAL REGULATION

The question of reforming standardization system and certification system in Pridnestrovie and transition to system of technical regulation has ripened for a long time. It also became a subject of a final discussion platform of the Forum “Modernisation of Technical Regulation System as the Basis for Strengthening the Competitiveness of Economy of Pridnestrovie”.

All participants of the discussion noted that the current system needs to be modernized, but it requires a balanced and in-depth approach. For free circulation of Pridnestrovian products in any of economic community or to the main trading partner countries is necessary, as a minimum, following rules should be observed:

  • unified or harmonized technical regulations;
  • unified or harmonized sanitary, veterinary and phytosanitary standards;
  • unified standards in order to confirm compliance with the requirements of technical regulations;
  • unified policy in the field of conformity assessment of products.

Participants of discussion have agreed that it is necessary to stir up activities for search of joint decisions for development of mechanism on exchange of information about a condition of a veterinary and phytosanitary situation between authorized bodies of Pridnestrovie and Moldova for an exception of duplicative mechanism of issuing permits to the economic agents of Pridnestrovie arranging products for export.

In the transition to the system of technical regulation necessary to legislate as one of the principles of voluntary application of standards.