Context
The privatisation of state-owned property in Moldova is a key condition for the introduction of far-reaching economic reforms. The privatisation process is making slow progress, however, and to date the results achieved remain modest. The Public Property Agency still looks after the interests of several hundred companies, including joint stock companies, as well as state-owned and municipal enterprises that are not commercially operated. The latter, in particular, are still not subject to market economy rules and are largely supported by the state or municipalities. Given these circumstances, Moldova has confirmed its keen interest in receiving advisory support on privatisation and improving state asset management.
Objective
The Moldovan privatisation agency has at its disposal methodologically sound privatisation procedures and modern instruments for the administration of state-owned property.
Approach
The main focus of the advisory services is to support the ongoing privatisation process. This involves analysing and examining weaknesses in current administrative and privatisation procedures and the corresponding legal regulations. Dialogue and advisory sessions then take place based on the findings of these problem analyses.
The forms of advisory support vary. They range from working meetings with individuals –generally agency directors, vice ministers and company directors – to brainstorming meetings with small groups of privatisation agency employees, training events and fact-finding visits for agency employees and staff at the ministries involved. In addition, the project prepares written inputs on issues relating to privatisation and state asset management and presents these to the project partners.
Results
Based on the problem analyses carried out to date, the project has drawn up proposals geared to improving administrative procedures at the Public Property Agency. These cover, for example, the standardised registration of state assets and standardisation of decision-making processes. This helps ensure that privatisation projects are carried out more effectively and more transparently. Many of the proposed amendments have already been incorporated into existing privatisation regulations and updated. In the process, the legal framework for privatisation and state asset management has undergone significant adjustment.
Furthermore, a new law came into force in 2014 to regulate state aid for private enterprises. An increasing number of economically sounder companies are being offered within the scope of public tendering processes. The results achieved are much more satisfactory than by putting companies up for auction. This approach means that privatisation contracts increasingly include investor’s obligations with regard to jobs and investment undertakings. Privatisation marketing has also considerably improved: for example, standardised company profiles for investors are published, in addition to lists of privatisation candidates. In addition, the Public Property Agency publishes and distributes its sales literature in English through the various Moldovan missions abroad so as to attract foreign investors.