According to the Fall Economic Update released today by the World Bank in Moldova, the outlook for the Moldovan economy remains positive, but downside risks are increasing. Prudent fiscal and financial sector policies are critical to protect macroeconomic sustainability, while low productivity and a judicial reform require immediate efforts.
Despite heightened political instability, the economy grew by 5.2 percent in the first half of 2019 driven by a strong increase in consumption, supported by a double-digit wage and pensions growth, on top of high public investment. Export performance was weak during the first six months of the year.
“Moldova needs sustained growth to create jobs and lift more people out of poverty,” says Anna Akhalkatsi, World Bank Country Manager for Moldova. “With the country’s heightened reliance on EU countries for trade and remittances, however, a further EU economic slowdown may reduce Moldova’s exports, and the continuous political uncertainty may undermine the positive macro outlook and fiscal sustainability.”
The economy is projected to grow by 3.6 percent in 2020 and by 3.8 percent in 2021 as growth in Moldova’s main trade partners strengthens. The forecast assumes continued progress on the reform agenda, including on containing fiscal pressures.
The rising uncertainties and slowing global growth require boosting productivity, increasing the efficiency and effectiveness of public spending, and lowering fiscal imbalances in order to nurture sustainable growth in Moldova. State-owned companies are still omnipresent even though they are less productive, and their productivity is declining. Eliminating price controls and monopolies within the economy and boosting competition would help free resources to support heightened productivity.
Strengthening Equity and Effectiveness of Social Spending
According to the World Bank’s Special Focus Notes, the 2017 pension reform strengthened fiscal and social sustainability of the pension system in Moldova: yet, the gains of this reform were not sustained for long. The reform was likely to bring the system to a fiscal balance, and the average replacement rate, instead of slipping to 13 percent, was projected to rise to 30 percent. However, the subsequent policy reversals in 2018 undermined fiscal sustainability. Reducing exemptions from paying social security contributions and harmonizing privileged pensions with the general pension system would address inequities and stabilize financially the pension system.
Moldova’s spending on social assistance is among the lowest in the region. Poverty in Moldova is quite high, especially for vulnerable groups, such as families with multiple children and single-parent families. Moreover, social assistance is still dominated by categorical benefits, and the main anti-poverty program Ajutor Social has begun to decline. In this context, changing the design of Ajutor Social to support families with children and non-able-bodied adults and tightening its linkages to activation and social services would strengthen its effectiveness and adequacy.
“The Ajutor Social, while being the best targeted program, has very low coverage and its benefits are inadequate. Additional scarce funds need to be allocated to this program instead of any other options as Ajutor Social most effectively reduces poverty,” says Roman Zhukovskyi, Social Protection Specialist.
Greenpeace Africa reacts to DRC President’s decision to suspend illegal logging concessions
The President of the Democratic Republic of Congo (DRC), Félix Tshisekedi, ordered on Friday, October 15th, the suspension of all dubious logging concessions, including the 6 granted in September 2020. Greenpeace Africa, one of the civil society organizations that denounced these concessions, applauds the decision taken by the Head of State and encourages him to remain vigilant and ensure its effective execution by Deputy Prime Minister Ms. Eve Bazaiba.
Greenpeace Africa reiterates its call for maintaining the moratorium on new industrial logging concessions to prevent a human rights and climate catastrophe. This logging sector, characterized by bad governance, favors corruption and remains out of touch with the socio-economic needs of the Congolese people and the climate crisis we live in.
Irène Wabiwa Betoko, Head of the International Congo Basin Forest Project of Greenpeace: “The decision of H.E. President Tshisekedi against the illegal actions of former Minister Nyamugabo sends an important message to the Congolese people and their government. It is also a red light for the plans of Ms. Ève Bazaiba, current Minister of the Environment, to open a highway to deforestation by multinational logging companies through lifting the moratorium on new industrial concessions.”
The President asks to “Suspend all questionable contracts pending the outcome of an audit and report them to the government at the next cabinet meeting.” Greenpeace Africa maintains that the review of illegalities in the forest sector must be transparent, independent, and open to comments from civil society organizations.
Ms. Wabiwa adds that “Both the protection of the rights of Congolese peoples and the success of COP26 require that the moratorium on granting new forest titles be strengthened. We again call on President Tshisekedi to strengthen the 2005 presidential decree to extend the moratorium.”
Ms. Wabiwa concludes that “instead of allowing new avenues of destruction, the DRC needs a permanent forest protection plan, taking into account the management by the local and indigenous populations who live there and depend on them for their survival.”
Standards & Digital Transformation – Good Governance in a Digital Age
In celebration of World Standards Day 2021, celebrated on 14 October every year, the United Nations Industrial Development Organization (UNIDO) is pleased to announce the launch of a brochure, “Standards and Digital Transformation: Good Governance in the Digital Age”.
In the spirit of this year’s World Standards Day theme “Shared Vision for a Better World”, the brochure provides insights into the key drivers of the digital transformation and its implications for sustainable development, particularly people, prosperity and planet. Noting the rapid pace of change of the digital transformation, with the COVID-19 pandemic serving as an unanticipated accelerator, the brochure highlights the role of standards in digital transformation governance. It further considers the principles necessary for guiding the collaborative development of standards in the digital technology landscape to ensure that the technologies remain human-centered and aligned to the goals of sustainability.
This year’s World Standards Day theme highlights the Sustainable Development Goals (SDGs) representing a shared vision for peace and prosperity, for people and planet. Every SDG is a call for action, but we can only get there if we work together, and international standards offer practical solutions we can all stand behind.
This brochure is a summary of a publication set to be released in November 2021.
Download it here.
UN: Paraguay violated indigenous rights
Paraguay’s failure to prevent the toxic contamination of indigenous people’s traditional lands by commercial farming violates their rights and their sense of “home”, the UN Human Rights Committee said in a landmark ruling on Wednesday.
The Committee, which is made up of 18 independent experts from across the world, monitors countries’ adherence to the International Covenant on Civil and Political Rights.
Lands represent ‘home’
The decision on Paraguay (in Spanish) marked the first time it has affirmed that for indigenous people, “home” should be understood in the context of their special relationship with their territories, including their livestock, crops and way of life.
“For indigenous peoples, their lands represent their home, culture and community. Serious environmental damages have severe impacts on indigenous people’s family life, tradition, identity and even lead to the disappearance of their community. It dramatically harms the existence of the culture of the group as a whole,” said Committee member Hélène Tigroudja.
The decision stems from a complaint filed more than a decade ago on behalf of some 201 Ava Guarani people of the Campo Agua’e indigenous community, located in Curuguaty district in eastern Paraguay.
The area where they live is surrounded by large commercial farms which produce genetically modified soybeans through fumigation, a process which involves the use of banned pesticides.
Traditional life affected
Fumigation occurred continuously for more than 10 years and affected the indigenous community’s whole way of life, including killing livestock, contaminating waterways and harming people’s health.
The damage also had severe intangible repercussions, according to the UN committee. The disappearance of natural resources needed for hunting, fishing and foraging resulted in the loss of traditional knowledge. For example, ceremonial baptisms no longer take place as necessary materials no longer exist.
“By halting such ceremonies, children are denied a rite crucial to strengthening their cultural identity,” the Committee said. “Most alarmingly, the indigenous community structure is being eroded and disintegrated as families are forced to leave their land.”
The indigenous community brought the case to the Human Rights Committee after a lengthy and unsatisfactory administrative and judicial process in Paraguay’s courts.
“More than 12 years after the victims filed their criminal complaint regarding the fumigation with toxic agrochemicals, to which they have continued to be exposed throughout this period, the investigations have not progressed in any meaningful way and the State party has not justified the delay,” the Committee said in its decision.
Members found Paraguay did not adequately monitor the fumigation and failed to prevent contamination, adding “this failure in its duty to provide protection made it possible for the large-scale, illegal fumigation to continue for many years, destroying all components of the indigenous people’s family life and home.”
The Committee recommended that Paraguay complete the criminal and administrative proceedings against all parties responsible and make full reparation to the victims.
The authorities are also urged to take all necessary measures, in close consultation with the indigenous community, to repair the environmental damage, and to work to prevent similar violations from occurring in the future.
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