FY 2010 Foreign Operations Appropriated Assistance: Moldova

Bureau of European and Eurasian Affairs

Performance Report Highlights: Moldova

FY 2010 Foreign Assistance Goals

U.S. Government (USG) assistance in Moldova worked to strengthen the country’s democratic institutions, increase its prosperity, and help it to become a full partner in the European and international communities. In FY 2010, USG assistance promoted democratic electoral processes and political competition by strengthening election administration, political parties and civic election monitoring. Continued USG support for civil society, independent media and local governance increased civic participation, access to objective information and government transparency and accountability. Rule-of-law initiatives helped to build justice-sector professionalism, both through training and continuing legal education. In FY 2010, Moldova signed a five-year, $262 million Millennium Challenge Corporation (MCC) Compact, which will provide critical infrastructure investments in roads and irrigation. U.S. economic growth assistance helped improve Moldova’s business environment, while working with key industries with export potential to build competitiveness and, over time, to add jobs and increase incomes. Trafficking-in-persons (TIP) programs improved the Moldovan justice sector’s ability to identify and prosecute traffickers and to disrupt migrant-smuggling networks while protecting victims of trafficking. In FY 2010, the U.S. continued its support for the re-integration of the breakaway region of Transnistria through economic growth and civic-participation programs in that region.

Total FY 2010 Foreign Operations Appropriated Assistance: $21.42 million*

Date: 2011 Description: Moldova -- Total FY 2010 Foreign Operations Appropriated Assistance:  $21.42 million. - State Dept Image

(*Foreign Operations funding appropriated for FY 2010, not including Peace Corps funding and centrally managed, regional Foreign Operations funding that is not budgeted for specific countries. Humanitarian Assistance total does not include the value of donated humanitarian commodities transported by the Department of State, estimated at $4.15 million in FY 2010.)

Highlights of FY 2010 Performance by Area of Focus

Peace and Security

-- Technical assistance to the Moldovan military facilitated the development of detailed defense plans in pursuit of Moldova’s national security and defense objectives. As part of this Strategic Defense Review process, a draft National Security Strategy was submitted to the Parliament and discussed publicly in May.

-- Training through the International Military Education and Training (IMET) Program and the North Carolina National Guard has helped develop the capacity of the Moldovan military to participate in peacekeeping missions. During 2010, Moldova deployed individuals to peacekeeping activities in Sudan and the Kyrgyz Republic.

-- Technical and equipment assistance to the Moldovan Center for Combating Trafficking in Persons (CCTIP) supported improvements in law enforcement operations, undercover work, interviews and arrests linked to TIP and illegal migration cases. The lack of a physical presence of Moldovan Government (GOM) prosecutors at CCTIP had been an impediment to fully implementing the task force approach. USG assistance facilitated the integration of prosecutors into CCTIP task forces resulting in significantly improved operations: during 2010, the GOM initiated 129 criminal cases on human trafficking.

Governing Justly and Democratically

-- In addition to providing free legal aid to 147 underserved rural communities and expansion of the continuing legal education regime nationwide, USG assistance contributed to the drafting of the new Law on the Legal Profession, adopted by Parliament in May 2010, which improved the self-regulation and status of criminal defense and civil attorneys in the country in accordance with international standards.

-- Through support for robust civic election observation and improvements to election administration, USG assistance contributed to elections deemed by international observers to have met most Organization for Security and Cooperation in Europe (OSCE) and Council of Europe (COE) commitments. USG funding supported sample-based observation of Moldova’s constitutional referendum, and a full-fledged civic observation mission with at least one independent observer in each of Moldova’s polling stations during its November parliamentary elections. Simultaneously, the USG provided training and support materials on election administration procedures, assistance in updating voter lists, and guidance on procedures for handling ballot counts for officials at the central, district and precinct levels.

-- The USG supported the GOM’s efforts to implement governance reforms by providing short-term technical assistance in the areas of fiscal decentralization, agricultural policy, internal communications, customs-service operations, and e-governance. With regard to e-governance, U.S. assistance successfully helped the GOM attract support from a new World Bank project which is expected to make Moldova a leader in this area.

-- USG programs improved the Moldovan public’s capacity to influence public policy by supporting the development of a robust civil society. Support provided through the USG was critical to creating a legislative environment and tax structure that support domestic funding for non-governmental organizations (NGOs) and eased restrictions on many NGO operating functions. A new law on volunteering provided NGOs with a legal mechanism for recruiting and engaging volunteers, and opened new possibilities for developing partnerships with businesses. Similarly, amendments to a law on contracting social services, and work on the draft law on new accounting standards for NGOs, played a crucial role in creating a legal environment in Moldova that supports NGOs and provides them with opportunities to become self-sustaining.

-- USG programs continued to contribute to the development of a sustainable network of regional independent television stations, culminating in the official registration of an association of broadcasters and the launch of an interactive media news website. USG-funded assistance provided to 15 rural independent television stations and seven media outlets located in Transnistria improved Moldovans’ access to objective sources of local news and information.

-- Study visits and exchanges to the United States exposed Moldovans to the democratic, market-based institutions of our society. In 2010, 145 Moldovans studied in the United States under a variety of academic and professional exchange programs. For example, ten officials with responsibilities for the economic development of their communities benefited from a USG-funded exchange program that allowed them to learn from and network with U.S. local economic development experts, and another ten representatives of the mass media participated in a study tour to learn about investigative and anti-corruption journalism and its importance to good governance. In addition, an exchange group from the GOM’s Ecology Working Group and the Transnistrian administration traveled to the United States to study environmental issues and management. The exchange was part of an initiative to tackle practical issues in a confidence-building process that is part of the larger effort to bring about a resolution of the Transnistria conflict.

Economic Growth

-- U.S. assistance programs continued to work to develop the export capacity of Moldova’s agricultural sector, as a major potential employer and economic driver for the country. During 2010, USG programs helped two firms with the process of obtaining hazard-analysis and critical-control-point (HACCP) certifications, which are globally recognized and confirm the safety of products for consumption. One meat-processing firm completed the process, and the second made significant progress and expects to complete certification shortly. In addition, USG assistance facilitated the construction of a 3,500 ton cold-storage warehouse and the planning of three other similar structures. In total, facilities will be constructed for 9,500 tons of food, providing employment for 100 workers.

-- USG assistance programs targeted individual firms in three key sectors of the Moldovan economy: apparel and textiles, information and communications technology (ICT), and wine production. Interventions with targeted apparel producers resulted in up to 20% productivity increases and the launch of their own brands by those firms in 2010. The industry grew as an overall share of the Moldovan economy in 2009, increasing from 17% to 20% of exports and was on-track for significant growth in 2010. In the ICT sphere, USG interventions helped establish several fully sustainable training centers, including one Microsoft IT Academy and several Cisco Networking Academies, within Moldovan educational institutions, as well as an IT Excellence Center. USG efforts also facilitated the formation and development of the Moldovan Association of Private ICT Companies, which serves as a pillar for promoting effective industry development on domestic and foreign markets, and a reliable dialogue partner for the GOM. USG assistance to 11 growth-oriented wineries, including assistance to develop the Moldova Wine Guild, continued to improve the quality of Moldovan wine, as well as the wineries’ understanding of Moldova’s competitive position in the region. Exports within the region grew during the year, particularly in nearby markets.

-- Technical assistance provided by the USG helped improve the regulatory and operating environment for business in Moldova, making it easier to start and sustain businesses and eliminating opportunities for corruption. USG assistance helped draft a law streamlining the processes for obtaining a construction permit, which reduces the waiting time to receive a construction permit by at least 71 days. In particular, the new law cuts the number of procedures needed for such a permit, as identified by the World Bank’s Doing Business assessment, by more than 50% and reduces the official costs by almost 80%. This will generate annual savings for the private sector of $6 million and is expected to improve Moldova's rating in the next Doing Business report. The USG also worked with the GOM to streamline the business-licensing regime, reducing the number of activities that require licenses (to certify competency and control entry) from 37 to 32.

-- In view of the limited protections afforded minority-share investors, the USG provided assistance to the National Commission on Financial Markets to draft amendments to the law which will increase these protections and allow for more attractive investment opportunities. This will mitigate the current incentives for foreign direct investment to establish only new firms or to completely buy out existing firms, rather than become partial shareholders – a situation that limits investment options in Moldova.

-- The USG also provided significant technical and ICT assistance to the State Tax Service (STS), improving citizens’ and business’ ability to file taxes accurately and efficiently as well as GOM revenue collection. Specifically, the USG helped improve existing software to allow easy export of data from accounting software into the STS system. As a result, more than 2,100 companies were using the new system at the end of 2010. The USG also helped the STS develop a web portal which now offers seven key services to taxpayers, including confirming that taxpayers are registered and establishing an e-certificate system to authenticate individuals' online signatures.

-- U.S. assistance programs also sought to promote equitable economic opportunities for women and youth. The Women’s Career Development Project plays an important role in empowering vulnerable and disadvantaged women. During 2010, 127 women benefitted from skills training in accounting, bank services, computer use, office management, and foreign languages. This increase in marketable skills contributed to 113 of the program participants being hired by local businesses.

Humanitarian Assistance

-- In response to the floods which hit Moldova in the summer of 2010, the USG provided more than $300,000 in relief supplies and funds to assist affected families. USG assistance was used to provide and purchase household furniture and bedding sets for distribution to displaced families. The U.S. military also provided relief supplies and other flood-related assistance.

-- Separately, USG assistance provided over $4.15 million in donated medical supplies and equipment to recipient hospitals and clinics throughout Moldova.