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The Court of Accounts notes modest results in the field of regional development

  • 14.07.2021
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On July 14, the Court of Accounts of the Republic of Moldova (CoARM) examined during an online meeting the Performance Audit Report on the implementation of the National Strategy for Regional Development (NSRD) for 2016–2020.

The audit aimed to assess the performance of the objectives set out within the Action Plan on implementing the National Regional Development Strategy for 2016-2020, the mechanisms for achieving them, as well as identifying shortcomings in the implementation of the Strategy and their impact on the overall objective.

At national level, the institutions responsible for coordinating the regional development policy are the National Council for Regional Development, the Ministry of Agriculture, Regional Development and Environment (MARDE) and its subordinate structures, in this case the Regional Development Policy Directorate and the Section for Relations with Regional Development Institutions.  At regional level, there are four regional strategies, the institutional framework for the implementation of the policy being constituted by the Regional Development Councils North, Center, South and Gagauzia Territorial Administrative Unit and 4 Regional Development Agencies.

The main source of financing programs and projects is the National Fund for Regional Development, which allocates annually from the state budget financial means, amounted to about 200 million lei. At the same time, are attracted the resources of external partners for the implementation of the regional development policy of the Republic of Moldova.

The analysis of the implementation of the NSRD during 2016-2020 highlighted major difficulties, which need to be solved, for the efficiency of governance in the field of regional development. Thus, evaluating the degree of implementation of the Strategy, the CoARM finds that, out of the total of 44 actions included in the action plan, 28 actions were fully implemented, 11 - partially, and 5 actions remained unrealized.

The Republic of Moldova is committed to strengthening economic integration with the European Union (EU) based on the Association Agreement between the Republic of Moldova and the European Union and the UN Sustainable Development Goals, the audit finding some shortcomings and problems affecting progress in this domain. Thus, out of the total of 27 actions provided within the National Action Plan for the implementation of the Association Agreement, during 2017-2019, 21 actions were carried out and 6 remained unfulfilled, the implementation rate being 78%.

During the audit, was stated the lack of documents to prove the studies and calculations based on which the costs of actions related to the implementation of NSRD were estimated, in the end the implementation costs amounting to 1.3 billion lei, thus attesting a major difference of 3 billion lei, which affected the full implementation of the action plan. Respectively, the lack of correlation between the amount established for the implementation of NSRD and the real capacity to attract investments indicates that the state authorities relied on some forecasts or funding expectations, planning to attract external sources, which ultimately were not contracted.

Also in this context, it was noted that the distribution of financial means is deficient and does not cover the real needs of the development regions. As a result, the approval of the Single Program Document was made without taking into account the available financial resources, which led to the non-initiation of 20 investment projects worth 783 million lei and the non-completion of 15 projects worth 771 million lei, thus affecting the achievement of regional development objectives.

During the implementation of NSRD, during 2016-2020, all regions of the Republic of Moldova recorded modest results, facing major economic and social challenges. Thus, according to World Bank data, the gross domestic product (GDP), reported per capita, in the Republic of Moldova remained at the lowest level, compared to other countries in Central and Eastern Europe. At the same time, Chisinau generates the highest GDP compared to other regions and contributes about 60% of total GDP, respectively the largest disparity remains between Chisinau and other regions of the country.

The audit also stated that during 2016-2020:

• the regionalization of water supply and sewerage services in the districts of the country was not successful, the processes being difficult and slow;

• the National Spatial Planning Plan and the regional plans have not been developed so far;

• the new Regional Development Concept was approved late with the transition to a new Strategic approach;

• the new Strategy and amendments to the Law on Regional Development are not approved.

In this context, it is noted that, although major investments were made to ensure the access of the population to drinking water supply and sewerage services, insignificant progress was made in this area, the implementation of projects being carried out with great deviations from the initial planned terms, and the networks built remain untapped.

At the same time, the reduced capacities of co-financing of projects by local public authorities, their division into stages, the existence of various litigation with entrepreneurs, as well as insufficient preparation of technical documentation compromised the achievement of implemented projects, some projects of local importance not being related to the priorities established within the NSRD.

The Court of Accounts concludes that, although some progress has been reported in regional development, the institutions responsible for implementing the policy in this area face a number of difficulties, which affect the reliability of the results of investments and compromise the effective achievement of pre-established objectives. At the same time, the current development trends of the Republic of Moldova continue to be dominated by the advancement of the monopolar development model, characterized by the disproportionate concentration of resources and welfare in Chisinau, against the background of increasing marginalization of peripheral regions. Thus, the imperfections of the normative framework, the lack of coordination and synergy of regional development policy with similar interventions managed by other authorities at the level of strategic documents and inefficient institutional management have conditioned the delay in implementing some objectives or even failing to achieve others. In developing the new Strategy, the implementing authorities need to identify the most relevant actions, which will ensure both the efficient conduct of regional development policy and the achievement of cost-effective results, based on real funding sources.

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