CHISINAU (Moldova), June 9 (SeeNews) – Moldova has climbed ten spots to 87th place in the 2020 global economic freedom chart prepared by U.S.-based think-tank The Heritage Foundation thanks to an overall improvement in the government integrity and spending indicators, The Heritage Foundation said.
Moldova's economic freedom score gained an annual 2.9 points to 62, primarily because of higher government integrity and spending scores, according to the 2020 Index of Economic Freedom report published by the think-tank.
Moldova is ranked 40th among 45 countries in the Europe region, and its overall score is well below the regional average and approximately equal to the world average, according to the report.
The Moldovan economy moves up to the moderately free category this year and GDP growth has been healthy for the past five years.
"Economic freedom is constrained by post-Soviet Moldova’s ongoing vulnerability to corruption, political uncertainty, weak administrative capacity, vested bureaucratic interests, a rigid labor code, dependence on energy imports, Russian political and economic pressure, heavy dependence on agricultural exports, and unresolved separatism in the country’s Transnistria region," The Heritage foundation said.
The rule of law, in particular, remains very weak, as widespread corruption and related advantages for politically connected business owners affect normal business activity and undermine fair competition, it added.
Also, the judiciary is susceptible to political pressures that limit its independence.
On the economic front, private businesses must deal with political uncertainty, weak administrative capabilities, and enmeshed bureaucratic interests, the report reads. However, starting a business has been facilitated by the removal of redundancy in registration, The Heritage Foundation noted.
The inefficient labour market is fed by an inefficient education system. Better educated Moldovans often leave to work elsewhere., the report also reads.
Regarding market openness, The Heritage Foundation notes that foreign and domestic investors are treated equally, but the overall investment regime is not conducive to dynamic investment growth. The level of overall financial intermediation remains shallow, the report concluded.