Experience of Moldova in

implementing structural reforms

Eugen OsmochescuHead, RIA Secretariat

Geneva, 23 October 2007

Content Priorities Approach Strategy Legal Framework Institutional Framework Phases of Implementation Results after 3 Phases Enacting the Guillotine Lessons Learned Next Measures Lessons Learned

Priorities in Policy and Regulatory Reform

Rendering paid services for

entrepreneurs

Improvement of the activities of controlling/

inspection organizations

Regulatory Reform

Fiscal & Accounting Reporting

through a simplified fiscal system

Optimization of authorization

system at the start-up stage

of business

Strategy in Policy & Regulatory Reform

Lobbying and Advocacy

Regional Level

National level

Task/Activities Main tools

Implementation of Guillotine Law & RIA

National Working Group(NWG)

Establishment of RWGs, and OSSs

TA to MET, NWG and RWGs

Development of RIAModule

Regional Working Groups(RWGs)

Best inter. practice, Training

Workshops, roundtables, int. forum

Legal Framework (I)

17 February 2004Governmental Decision on Reform of State Regulation of Entrepreneurship Activity

The Concept of Reform has been approved. Inter-ministerial Commission created as a

political body to coordinate the Reform. The National Working Group (NWG) created as a

working entity to propose to the Inter-ministerial Commission modification to the legal framework on regulating entrepreneurship activity.

Legal Framework (II)16 December 2004 Law on reviewing and streamlining

the normative regulatory framework for business activity (Guillotine Law I) passed by the Parliament of Moldova by a near unanimous vote including the opposition.

NB Under the Guillotine Law did not fall laws and decisions of the Parliament

Institutional Framework

State Commission on Regulatory Reform;

National Working Group on Regulatory Reform (NWG);

Secretariat of the NWG (based on a Memorandum signed between MoE&T and USAID BIZPRO/Moldova, and as of July 3, 2006 overtaken by the WB Competitiveness Enhancement Project);

9 Regional Working Groups.

Phases of Implementation

Phase I: 7 February -22 March 2005

Phase II: 22 March – 22 June 2005 Phase III: 22 June – 22 July 2005

Phase I: 7 February -22 March 2005

All public authorities revise official acts in respective field of activity.

Based on the revision, each authority elaborates a List of official acts.

The List of official acts and every single official act are presented to the NWG and its Secretariat

Each official act is presented with an informative note

Phase II: 22 March – 22 June 2005 (I)

Assessment by the NWG of official acts and informative notes presented by public authorities;

NWG takes the decision to include or not include the official acts into the Registry;

Appeals by the public authorities at the State Commission.

Phase II: 22 March – 22 June 2005 (II)

9 sub-groups of the NWG created; 12 independent expert consultants

hired; 15 sessions scheduled for the

NWG.

Phase III: 22 June – 22 July 2005

Public access to the elaboration of the final version of the Registry;

Elaboration and approval of the final version of the Registry;

Presentation of the draft Registry to the Government;

Abrogation of official acts not included in the Registry.

Results after 3 phases

1130 regulations have been revised>- 426 regulations shall be included in

the Registry;- 285 regulations shall be amended;

and- 99 regulations shall be discarded;- Other considered not to regulate

entrepreneurial activity.

Enacting Guillotine I (I) Government Decision – 30 August 2005

Approving the Nomenclature of Authorizations, Permits and Certificates Issued by Central Public Authorities and Subordinated Units for Entrepreneurial Activity of Physical and Legal Persons

Results: - from around 400 permits only 128 remained, of

which only 47 are issued against charge (reference to a law or international agreement Moldova is part of);

- have to be issued within 10 days (unless otherwise provided by a law or international agreement).

Enacting Guillotine I (II) Government Decision – 3 October 2005

Approving the Registry of formal acts regulating business activity

Results: List # 1 – Acts to be included in the Registry; List # 2 – Abrogated Acts; List # 3 – Acts proposed to be abrogated by

independent agencies; List # 4 – Acts to be modified and published in the

Official Gazette (authorities have to present to the NWG modifications to the respective acts within a 3 months period. In case if it is not done, unmodified acts will be abrogated as of January 1, 2006).

Lessons Learned (I) Underestimation of potential number of acts to be

revised Inclusion for revision and assessment of local public

authorities’ acts. In this case the work load is not real taking into account 6 months and available financial and human recourses

Lack of real communication strategy of the central level with local levels, where most of business in need is and

Low quality involvement in the exercise of private sector representatives from the capital city where 70% of business is, except foreign investors

Lack of financial and human resources from the side of the Government, fact leading to a need of foreign TA

Lessons Learned (II) Part of the members of the NWG did not took

the exercise in serous Old mind set in case of most ministries. It took

a while to “educate” them which led to time loosing and low quality of the interaction between the ministries and NWG, which resulted on extra work load for TA

An education/communication/branding campaign needed before the technical process starts, so that ministries would take more serous the obligations inserted in the law

Next Measures Law on Basic Principles Regulating

Entrepreneurial Activity (11 August 2006)

- Guillotine of laws- Most regulations to be adopted by law- Market criteria for assessment- RIA Medium Term Strategy for Regulatory

Reform – 2006/2009 RIA Methodology SMEs Strategy

Law on Basic Principles Regulating Entrepreneurial Activity

The Law sets the following principles: Predictability of regulations; Transparency in decision-making and

regulation; Regulatory Impact Assessment; Material and procedural regulations on

business start up, business development, and business close up only by laws;

Proportionality.

Phases of Implementation

Phase I: 11 Aug. -26 Nov. 2006 Phase II: 26 Nov. 2006 – 26 Feb.

2007 Phase III: 26 Feb. – 26 May 2007 Phase IV: until 30 Nov. 2007

Phase I: 11 Aug. -26 Nov. 2006

Public authorities develop draft modifications and amendments to the normative acts in their area of activity.

Authorities submit to the Commission/NWG/RIA Secretariat drafts and information notes for review, and concomitantly present to the Parliament a report on the results of review of normative acts at the respective stage.

Phase II: 26 Nov. 2006 – 26 Feb. 2007

State Commission examine the drafts and submit its review to the authorities.

State Commission presents to the Parliament a report on its review of normative acts.

Phase III: 26 Feb. – 26 May 2007

Authorities develop, based on the State Commission’s review, the final draft and information notes, and adopt or submit them for adoption in accordance with the law.

Phase IV: until 30 Nov. 2007

Revision by the Parliament, and adoption of modifications as well as abrogation

Lessons Learned (I)

Low quality involvement in the exercise of private sector representatives, except foreign investors;

Lack of financial and human resources from the side of the Government, fact leading to a need of foreign TA;

Lessons Learned (II) Old mind set in case of most ministries. It

took a while to “educate” them which led to time loosing and low quality of the interaction between the ministries and NWG, which resulted on extra work load for TA

An education/communication/branding campaign needed before the technical process starts, so that ministries would take more serous the obligations inserted in the law