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Position of the NDS “Moldova 2020”

in the national strategic planning system

Mr. Ruslan Codreanu – director of Policy, Strategic Planning and Foreign Aid Department

Chişinău, 2012

The State Chancellery

The Goal

Economic growth for sustainable development Development aid: will not stay forever Growth matters: fiscal space for social policies Consumption led growth: not sustainable

Remittances may dry out as migrants establish homes abroad

Not fast enough to ensure convergence

Learning tips from EGPRSP & NDS: less is more

Longer term vision is key

Development Priorities

How we came about setting priorities: Growth diagnostics:

find the bottlenecks Fix problems and not

sectors Seek externalities Generate impact

7 national priorities

Education

Better Roads

Access to finance

Business climate

Energy efficiency

Pension reform

Rule of law

Participatory solutions

•Design process•Set goal•Validate priorities

SPC

•Establish baseline•Define targets for 2020•Define milestones for 2015

•Elaborate vision

Working groups •Online consultations

•Roundtable discussions•Public debates•Feedback

Public consultations

•Government approval•Parliamentary approval

Approval

July August December March 2012

Development partners’ contribution

67 proposals from Joint Donor Group and WB;

Important issues were mainstreamed through the “Moldova 2020”, as for example: Migration, Gender, Health, Environment, etc.

Important EC proposals regarding reintegration of the country and correlation to the Association Agenda were included in the draft.

One section on links with other national strategies and policies was added.

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EXPECTED IMPACTEDUCATION

1) Migration of young graduates will be reduced by 50%,

2) Graduates will be at an aggregate level by 20% more productive.

Under such circumstances, the annual growth rate of GDP over the medium term may be 0.6-0.9% higher compared to the scenario "without reforms".

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EXPECTED IMPACTBETTER ROADS

MDL 2.5 billion is wasted annually on extra repairs and fuel on road segments planned for rehabilitation.

Therefore, saved money can be invested for productive purposes and thus can increase the stock of fixed capital.

Annual GDP growth will be additionally increased by 0.3% due to fuel savings and repairs only. But the overall likely effect will be even greater.

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EXPECTED IMPACTACCESS TO FINANCE

1) Up to 50% increase in financing volumes through the banking and non-banking sectors as a percentage of GDP.

Additional investment will be reflected in an annual GDP growth of up to 0.5-0.7% higher compared to the scenario without the implementation of this priority.

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EXPECTED IMPACTBUSINESS CLIMATE

1) Regulatory constraints and unjustified costs will be eliminated,

2) Enhanced investor confidence in the business environment in Republic of Moldova.

Increased trade volumes, including exports as a share of GDP, which have an positive impact on economic development and poverty reduction.

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EXPECTED IMPACTENERGY EFFICIENCY

1) Strengthened energy security;

2) The intermediate production in the energy and transport sectors only amounts to over MDL 17 billion;

3) The energy efficiency increase by up to 10%. Annual savings by 2020 will account for approximately MDL 830 million in current prices.

GDP growth rate over medium and long term will be higher by at least 0.2% compared to the base case scenario, only on account of savings achieved.

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EXPECTED IMPACTPENSION REFORM

1) A sustainable pension system will have positive repercussions on the national economy, reducing the extent of salaries paid under the table, shadow economy, etc.

The share of pensioners below the absolute poverty line will decrease by 2 p.p. over the scenario ”without reforms” by 2020.

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EXPECTED IMPACTJUSTICE

1) The estimates of the volume of bribes paid in 2011 from the enterprises’ revenues are about MDL 390 million.

2) The lower level of corruption would result in investing a part of this money for productive purposes, thus generating an annual GDP growth by at least 0.1% annually.

Moldova’s attractiveness will increase foreign investments and associated new technologies, thus inducing important collateral effects.

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OVERALL EXPECTED IMPACTGDP GROWTH, MDL MILLION AT 2000 PRICES

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Scenariu de Bază

Moldova 2020

Base case sce-nario

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OVERALL EXPECTED IMPACTREDUCTION OF THE POVERTY RATE, %

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200.0

5.0

10.0

15.0

20.0

25.0

Scenariu de Bază

Moldova 2020

Base case scenario

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“Moldova 2020” operationalization process

PrioritiesPriorities

Objectives & indicators

Objectives & indicators

Measures*Measures*

Time bound actions

Time bound actions

ProgramsPrograms

IndicatorsIndicators

MOLDOVA 2020

CONSOLIDATED ACTION PLAN

MTBF / LAW ON STATE BUDGET

* Measures = groups of related actions

Planning and prioritization Implementation, monitoring & reporting

Consolidated Action Plan

(Implementation)

Technical Assistance

(Implementation)

Annual Budget Programs

(Implementation)

Consolidated Action Plan

Measures & Actions

MTBF

Resourcing

Quarterly & annual reporting against actions

Annual reporting against indicators

Mo

ldo

va 2

020

pri

ori

ties

Mid

-te

rm e

val

ua

tio

n r

ep

ort

”Moldova 2020”, Integrated planning, monitoring and reporting cycle

Follow-up Actions

Monitoring and evaluation Yearly monitoring 2015: interim evaluation 2020: final evaluation

Integrate into the strategic planning Influence the Strategic Development Programs Update the Government Action Plan Inform the Medium Term Expenditure Framework

Maintain awareness

The national strategic planning system

Government’s Program of activities

SDP

Consolidated actions plan

Annual budget

NDS “Moldova 2020”

Sectoral/ cross sectoral strategies

Annual authority action plan

MTBF

MTEF COVERAGE

Education

1st stage, MTEF 2003-2005Health care

Social Protection

Agriculture 2nd stage, MTEF 2007-2009

Culture

3rd stage, MTEF 2008-2010Tourism

Defence

Justice

4th stage, MTEF 2009-2011

Science

Environment protection

Road and transportation

Correctional institutions

Sport and youth

Energy6th stage, MTBF 2013-2015

Quality Infrastructure

Construction

6th stage (piloting), MTBF 2013-2015Informational technologies and communication

Public order and civil protection

MTEF process

• MF elaborates the instructions for the MTBF

• SC establishes the priorities for the next MBTF

MF, CS

• Working groups analyze the main budgetary aspects

• elaborate SES, • Set the expenditure

cap for resources for each sector

Working groups

• MF prepareres the final draft and sends it to the SC

MF

• Government approval

• Presented to the Parliament

Government

December January February March April May

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