CHISINAU (Moldova), March 5 (SeeNews) – Economic freedom in Moldova is constrained by corruption, political uncertainty, weak administrative capacity, vested bureaucratic interests, a rigid labour code and dependence on energy imports, U.S.-based think-tank The Heritage Foundation said.
The rule of law in particular remains very weak in Moldova, especially in the judicial system, according to the 2021 Index of Economic Freedom report published by the think-tank earlier this week.
Moldova’s economic freedom score is 62.5, making its economy the 85th freest in the 2021 Index. Its overall score has increased by 0.5 point, primarily because of an improvement in the tax burden score. Moldova is ranked 41st among 45 countries in the Europe region, and its overall score is below the regional average but above the world average.
Moldovan law protects property rights, but they can be undermined by judicial corruption, The Heritage Foundation noted.
The judiciary is constitutionally independent and reforms are underway to improve the legal framework and reorganize and streamline the operations of the courts, which have been subject to political pressure. However, organised crime and corruption remain major problems at all levels of government, the foundation's report showed.
On the regulatory efficiency front, the foundation found that dealing with construction permits in Moldova has become quite a bit more expensive and time-consuming. "It is estimated that about one-fifth of the labour force works abroad, leaving fewer seeking jobs at home and making it more difficult to expand domestic production," it said.
Regarding market openness, The Heritage Foundation notes that in general, foreign and domestic investors are treated equally under the law, but the overall investment framework lacks transparency and efficiency. Long-term financing remains difficult in Moldova, the report concluded.