index.1.jpg (3032 bytes) Note #4 – April 2005                                                               

Europeanization and Governance

As of April 2005, Republic of Moldova will get its 10th – since gaining independence in 1991 – government. Again, the prime-minister contender will have, under the Constitution, only 2 weeks to prepare programme of activity, functions, structure and personnel of his/her cabinet. As regards the programme, it is clear that it will be expounded in the framework of the Economic Growth and Poverty Reduction Strategy for 2004-2006 (EGPRS) and EU-Moldova Action Plan for 2005-2007 “canonized” by the Parliament. However, it will be harder to define functions and structure, since neither science, nor previous Government elaborated any prior intermediates.

Therefore, it is very likely that – as was the case of previous cabinets – they will try to unite/part ministries and departments, as well as to reduce (once again!) number of state personnel. We have already seen it all, but the number of state personnel instead of reducing has unfortunately grown almost sevenfold since 1990. And the main question remains unanswered: is state administration system ready to modernize Republic of Moldova according to its European choice? 

Moldova is returning to Europe, trying to define its place there starting from interests of both the state and its citizens. Situated on southeastern outskirts of the European area, Moldova nonetheless does not want to be a marginal – a country of peripheral economy, culture and mentality. With this in view, Government and the current generation of Moldovan citizens have to work hard to revive the country and raise quality of governance, business and living up to the level of existing European standards. 

Transiting to reforms of the new type, according to initiatives of the President, V. Voronin, ensuring higher (than 5-6% according to SCERS) GDP growth rates and better consistency in transformation of the state, economy and society in accordance with EU-Moldova Action Plan presupposes further improvement of functions and structure of state machinery. This state machinery, despite partial changes of the last years and the process of adaptation of some of its bodies and officials to market conditions, still bears a strong imprint of past political and economic systems. 

Moldova has already lost too much time because of contradictory and ineffective reformation of the 90’s. Over this period, central European and Baltic countries managed to build legal and institutional foundation of their statehood, to make economic growth start and draw their competitiveness closer to the EU requirements. With a view to not waste any more time and chances for Moldova’s European integration, a system of well-coordinated actions concerning realization of EU-Moldova Action Plan is a number one national priority. It has to be the Government and state machinery that we should start reforming from, since their role in implementation of EU-Moldova Action Plan is principal. 

The current system is notable for excessive fragmentation of the central state machinery: there are more than 50 ministries, departments and state agencies. This process has particularly stirred up after 2001, when for each “issue” a special department or agency was formed to strengthen state impact. At that, though, there is no strong centre of the socio-economic policy planning and coordination. This can be Ministry of Economy that is gradually getting rid of the Gosplan atavisms: line-based approach is being replaced in the economy by the problem-based one. But limited potential of the Ministry’s key unit – Department of Macroeconomic Policy – does not allow it to occupy a dominant position in relations with NBM, Ministry of Finance and international financial organizations. Some ministries and departments have a pronounced tendency towards administrative interference into business activities.  

A new phenomenon appeared – business based on plenary powers, when ministries and departments transferred “on legal ground” a part of their functions to “affiliated bodies” for rendering of paid services to business and population. 

At the same time, as regards the Government’s functions and structure regional factor is evidently underestimated, including relations between the center and local public bodies, decentralization of resources and responsibility. As a result, business “crowds around the power” – more than 80% of economic units are registered in Chisinau, while other areas, small towns in particular, did not get over depression. Role of the Government’s Apparatus (State Chancellery – before 2005) and nature of its cooperation with the President’s Administration have not crystallized yet. Following this, there is direct evidence of inert, fragmented and many-storied structure of governance. 

Existing situation affects negatively the process of the country’s modernization. First, it hampers any attempts, including initiatives of the President, to liberalize, deregulate or demonopolize economy. Group interests penetrating through different channels often enjoy organizational and political support inside the Government and further – in Parliament. Under such conditions, a dynamic, well-coordinated policy of reforms so essential for realization of EU-Moldova Action Plan seems to be hardly realizable. It would be arguable to hope that Ministry of Foreign Affairs in the person of the corresponding department will cope with all this work. In Ukraine, for instance, these functions are entrusted upon Ministry of Economy and European Integration, and upon Ministry of European Integration in Romania. But, on the whole, as experience of the countries – new EU members showed, responsibility is incumbent on all levels and components of the state administration system. 

Experience of those countries also shows that formation of a new Government is the best time for deep changes in functions and structure of the state machinery. In this case, this process infringes less on private interests of the Cabinet members. The first stage of reformation usually consists in reducing number of ministries and departments (no more than 20) and, after that, in rationalizing structure of the Government, apparatus of which would deal only with functions of expert and technical service to the Prime Minister and Government as a collective body. 

Within the changed structure, one of Vice Prime Ministers, on behalf of the Prime Minister, would be responsible for coordinating processes of European integration, while another – for coordinating socio-economic policy of the Government. It is Ministry of Economy where functions regarding realization of foreign trade policy, regional development and cross-border cooperation, as well as creation of favorable conditions for investments and entrepreneurship have to be strongly reinforced. It is necessary to reconsider functions of ministries of industry and agriculture. Their functions should be defined by new realities of the country. 

Once functions and structure of ministries and departments were “Europeanized”, their deep internal reorganization is necessary. Thereupon only, an opportunity will appear to not only reduce, but also optimize employment in state administration, save budget funds and direct a part of them to raise wages of state officials, especially in sub-divisions that are directly engaged in practical realization of EU-Moldova Action Plan.  

In aggregate, actions to reform state administration should ensure:

·        An evident targeting of the whole Government at realization of EU-Moldova Action Plan, including its constituent – Strategy of Economic Growth and Poverty Reduction (SCERS);

·        A distinct division of political positions in government (prime minister, ministers and their deputies, political counselors) from apolitical state service (all other positions);

·        Competitive bases and transparency of selection of candidates for state service, financial and ethical stimuli for employment, efficient system of raising qualification of state officials, observance of the ethical code of conduct, including anti-corruption, of both persons holding political positions and professional state officials;

·        Training of specialists for practical work in key areas of EU-Moldova interaction: knowledge of European law canons will let obtain through negotiations the most advantageous conditions for transitional period and so-called temporary derogations (refusal to employ obligations of a candidate country) that render time to adapt to norms and conditions binding in EU. And it is necessary to create an effective informational and personnel database to solve issues emerging during negotiations;

·        Rational use of resources of the technical aid from European Commission and other donors with the switch to principles of long-term programming and object/problem-based approach, concentration on priority sectors and maximization of “hard” aid meant not only for consultations and education, but for investments and infrastructure as well;

·        PR-actions both at international forums and in bilateral relations that would characterize Moldova’s readiness for European integration. 

It is clear that these actions cannot be realized in form of an “emergency campaign”. They require continuous, laborious work and not one, but several nearest governments. Chances to realize the reformatory scenario depend on political will, continuity and coordination of actions of legislative and executive powers, and confidence of business community and population towards them.