“The most important news right now in Moldova relates to the results of the recent presidential elections,” says Cobzac & Partners Managing Partner Daniel Cobzac, from Chisinau, referring to the November 15 victory of former World Bank economist Maia Sandu over incumbent Igor Dodon, the leader of the pro-Russian “Party of Socialists of the Republic of Moldova,” which holds a parliamentary majority.
Cobzac believes that President-elect Sandu will try to strengthen cooperation with the United States and EU. He says that the relationship with Russia “will not be a priority as it was before, but I don’t believe it will be disrupted either.” Sandu is known for her desire for reform, he reports, describing that as “a good thing, given that, for the past 20 years or so, there have been no actual reforms.” According to him, “Moldova just didn’t have the luck of other ex-Soviet states that had leaders who had the well-being of their citizens as a priority.” Instead, he says, “almost every leader we had was either quite unpopular or ended up on trial for corruption.”
Although Sandu won almost 58% of the vote (which Cobzac describes as “remarkable,” as “the Socialist party controls the government and all administrative resources”), he believes she will need additional support to pursue the reforms she has promised. “The office of the President has no outright legislative power,” he points out, “so parliamentary support is crucial.” Accordingly, he says, “the President-elect is hoping for the opportunity to take control of parliament and has hinted at potentially calling for a general election soon, where this may be attempted.”
Moving away from politics, Cobzac reports that the only recent major change to Moldova’s legislative landscape involves amendments to the country’s Insolvency Law. “The reforms to the Insolvency Law were brought on by the EU and were drafted by a group of experts from Moldova, US, the World Bank, and local qualified judges,” he says, adding that the changes “solved a lot of issues.”
The most important amendment to the Insolvency Law, Cobzac reports, is the ability for companies to prolong the restructuring period. “The total period, now, is five years, as opposed to the previous three-year limit which was not enough to restructure a business.”
Finally, assessing the pulse of Moldova’s economy, Cobzac says that “the situation is not good, for all sectors of business,” due to the Covid-19 pandemic. He reports that, because of the crisis, there have been no major deals for the past six months, and he reports that “the sectors that do work are large retail chains of stores and some local vendors here and there.” With Moldova not belonging to the European Union, there are no relief funds coming its way, which means that help must be sought elsewhere. “The government has applied for several relief programs with donors from the EU and the USA but that these are all contingent on detailed plans for the way the assistance will be utilized," he says. "There are no indications that the government has completed any plans, so all of this is still on hold.”
Nevertheless, Cobzac reports that on November 25 President-elect Sandu announced that Moldova will receive EUR 51.6 million in financial assistance from the EU. According to him, "although this money will come as a loan, it is still good news for the ailing Moldovan economy.”