OREANDA-NEWS. October 08, 2010. Interview of well-known businessman, President of Moldova Business People Association on the ways of economic development of the country.

Over the last 10-15 years many words were told that Moldova should use its geographical position and become a bridge between the East and the West. The possibility exists, however the replacing authorities, realizing it, didn’t build even a rickety bridge. How do you think, they didn’t want to make it, couldn’t or there are any other reasons?

Vlad PLAHOTNIUC: We have a great chance. We are neighbors with European Union, but, at the same time, we are closely connected with the Eastern market. It is possible to become a bridge between the East and the West, and the history shows us that the countries that managed to use their junction position in a better way became the most prosperous.

The negotiations with EU on the Agreement on Deep and Comprehensive Free Trade will start in the near future. We have the advantages in terms of labor power that is well prepared in our country. We have the tax concessions. Of course, everything is not perfect, not all of our advantages are in use. The competitiveness of our economy is low and the administrative management both central and local is rather chaotic.

We may lose the chance not only because of instability but, especially, because of lack of national project. Our situation is constant, as if we don’t know what to do at the level of macroeconomics. Today we orient our hopes and economic flows to Moscow, tomorrow reorient them to Bucharest, the day after tomorrow – to Brussels. I have quite many acquaintances among serious European businessmen and assure you: nobody will invest in the country that doesn’t know its own mind. Except for single cases in order to fix some quick financial speculation that isn’t of benefit to the country.

Today Moldova is in great need of external investment capital. Why? Because these funds bring the working places, revenues to the budget, wellbeing, in the end. However, we have the other problems on the way of attraction of this capital. Up to now a foreign businessman, going to Chisinau, at first came upon the unfriendly welcome at the customs, then saw our roads that, mildly speaking, aren’t the best in Europe, further the bureaucracy, corruption and other well-known problems. After that the businessman returned home and didn’t want to invest in Moldova anymore. Managers from thousands of companies visited us, but only few of them invested in our economy.

Do you think the government must have the strategy of construction of this bunch between the major outlets of Moldavian goods – EU and CIS markets?

Vlad PLAHOTNIUC: First of all it is necessary to drop thinking in the spirit of the East and the West opposition. Moscow already collaborates successfully in terms of economy with the West; Russian national strategy became pragmatic, economic results – obvious. We have expended energy in fighting on the subject of our identity, our language, relations with Russia or Romania, but apparently didn’t learn anything. And what did we get? Nothing as well: the country is poor; its citizens go abroad in search of work. Thus I always tell about the same pragmatic project, a new look. Without them we cover with writing so many papers for various purposes for nothing. We had some documents with very good policies. We had the programs and strategies on development, including on stimulation of investments. It seems that at the end of 2009 the total volume of foreign investments exceeded USD2 billion. What is the benefit of them in the medium-term and long-term perspective if the bulk was channeled to the sector of services, and not to the production and infrastructure, warehousing, transport, logistics?

Answering your question I affirm that we are able to make Moldova even more than just a transit country, connecting two largest outlets. However at the level of former governments we had no vision of “owner,” spirit of entrepreneurship and professional long-term project that would be supported by all the parties, irrespective of doctrines.

You are the President of Moldova Business People Association. One of the tasks of MBPA is “promotion of Moldova’s image abroad and attraction of foreign investments.” Do you think Moldova has not a very good image abroad?

Vlad PLAHOTNIUC: Absolutely not. What do Western people speak about Moldova the most frequently? They speak that it’s the poorest country in Europe, it’s an underdeveloped country, supplying “the human commodity” and cheap labor power. We are conceived as poor cousin at whom people look with pity and even with disregard. I speak with a heavy heart but it’s true and we can’t pretend anymore that we don’t understand what people think about us.

This negative image should be changed not only for the sake of national prestige but for a long-term success of our business. Thus, together with my colleagues from the Moldova Business People Association we determined as one of priority tasks – the promotion of country’s image abroad and attraction of foreign investments.

MBPA intends to promote the Moldavian projects in a specific form within the international investment forums, and to carry out similar events in Chisinau with presence of very famous persons, such as Dominique de Villepin, Ex-Premier of France, whom we meet in Chisinau this week. Don’t expect massive investments without offering of viable projects to the persons with good connections at the highest level. Another opportunity to create a positive image of the country is to participate in the international exhibitions and fairs in order to promote our products. It doesn’t refer to urgently prepared, badly coordinated participation, as it was, unfortunately, before. We will organize the participation in compliance with the highest international standards. Besides, I think that the power of the press isn’t used in full, including of the foreign one, in the process of creation of positive public opinion about Moldova abroad. If we don’t speak with dignity and professionalism about our country, don’t expect that someone will make it for us.

Summarizing, the MBPA wants to bring in the professionalism in the activity on promotion of Moldavian business, and we will do our best. These efforts need the political support as well – government, parties, president. It’s not enough that the movement started in the civil society. Common approach of the entire country is required. All countries striving for progress, including the ex-socialist act in this manner; Poland, Hungary and Czech are the better examples. We should follow the same way.

What else the Moldova Business People Association is going to undertake to create the favorable investment climate?

Vlad PLAHOTNIUC: Many things, but it goes again my principles that the word outstripped the deed. In order to answer your question I will note something that should be done quickly and we’ll try to convince the authorities of its benefit: state-private partnership. What does it mean? Ensuring private capitalization of those big projects that aren’t completed today because the government hasn’t enough money for this. In case of creation of partnership, the money from the private sector, internal, and especially international could be channeled for roads, schools, hospitals and many other issues that needs the long-term investments. However for this it’s necessary to have clever leaders, thinking openly, loving the country but not only the pocket or the party.

Much was told of this partnership, but, unfortunately, I saw that event the businessmen are quite passive when it refers to the participation in discussion of legislative and normative acts, elaboration of realistic proposals. Let’s try to change the situation, the MBPA intends through its proposals to participate actively in the elaboration of governmental policies, especially, in the field of attraction of foreign investments. I assure you that it’s not just a simple unsubstantiated announcement, I’m not a politician. We have the MBPA specialists-members, well prepared, true professionals who know the problems and the ways to solve them. The companies that they head scored many successes and due to the experience they can participate in the improvement of business environment.

A businessman needs clear game rules in order to invest or develop its business. How do you think Moldova has an enough transparent and predictable business environment or something should be changed here as well?

Vlad PLAHOTNIUC: Unfortunately, we have neither transparency, nor predictability. The politicians keep the business under surveillance because it’s profitable. Thus, the corruption prospers and the country suffers. Hundreds of useless documents that only complicated the entrepreneurial activity have been adopted during the last 4-5 years. Recently the authorities admitted that they didn’t manage to defeat the bureaucracy and the reform of regulatory base should start all over again. And it’s after the well-known “Guillotine 1” and “Guillotine 2.” It means that nobody respects the business as before. Every new document adopted by any authority means change of game rules in fact.

The MBPA wants to become a tribune from which the voice of business could be heard, and the proposals suggested – could turn into the projects of legislative and normative acts. The Association will propose in public the draft laws that will be adopted by future parliamentarians, in such a way organizing the pressure on the government and the parliament. The MBPA may help in work of elaboration commissions. As to the predictability, only good laws that won’t change every day can provide it. And the harmonization of these laws with the European principles and standards will stimulate everything else.

Much is told on which investments are the most preferable for us – from the West or from the East? When somebody asks this question, a Chinese leader comes to mind, he said: “it does not matter what color a cat is as long as it hunts mice.” To my mind first of all we look at the color of a cat?

Vlad PLAHOTNIUC: The Chinese – is a good nation and they can express a thought deeply. Yes, we have namely such kind of situation; but, as I already said – it’s a false dilemma. We shouldn’t care about this issue, but only about benefit for Moldova and its citizen. The citizen’s benefit is to get well-paid working places, effective public health services, education and protection, to have good roads, hospitals, universities. If the standard of living rises, Moldavian citizens will be happier. After all, namely this is important: that everyone lived more joyful and quieter. The choice between the West and the East is a mistake, because we need the professional actions and concrete investments, and not the vapid conversations. We must understand it someday too.