Building a viable state, budget decifit cut in half says Speaker of Parliament

Flanked by journalists and an impressive contingent of mineral water bottles, Speaker Yevgeny Shevchuk, 38, briefed the press

TIRASPOL (Tiraspol Times) - Fighting for its statehood, Pridnestrovie is finding ways to overcome economic hardship and build a viable state despite outside pressure and what the local authorities here perceive as relentless economic warfare.

On 20 April 2007 Speaker of Parliament Yevgeny Shevchuk, 38, held a press conference on the economic situation of the unrecognized country which unofficially is also known as Trans-Dniester.

According to the PMR Parliamentary press service, one of the key themes of the press conference was the situation of the country's 2007 budget and measures which are being taken to stabilize the economic situation. The main issue discussed was a decifit of the national budget in 2007.

A budget shortfall originally projected at $100 million USD had been reduced to $83 million by the time of the implementation of the budget, and slashed further to $52 through new tax income and a reduction in spending ordered by parliament.

" - Regarding the budget deficit of $83 million dollars, as a result of the suspension of certain articles, we were able to reduce to 52 million dollars," said Yevgeny Shevchuk, explaining also that as far as pensions and other social spending is concerned, there is now almost no budget deficit: "the deficit on social spending has been reduced from 33 million to $1.9 million dollars."

After passage of the emergency bill on amendments to the 2007 republican budget a stabilization fund with the budget of 7.5 million US dollars was set up and it was decided to issue treasury bonds as a way to fund salaries for teachers and other public sector workers for the period of May and June 2007. Some social benefits and programs have had to be suspended, with the freeze lasting for the duration of the budget shortfall.

As a result of these measures by Parliament, Pridnestrovie's national budget deficit has been reduced to 52 million US dollars.

Blockade and economic warfare caused deficit

In Yevgeny Shevchuk's opinion, the budget shortfall was caused primarily by the 3 March 2006 introduction by Moldova and Ukraine of a new customs regime which authorities in Pridnestrovie have classified as an economic blockade against the small country.

" - This situation [the budget decifit, ed.] arose for reasons which include new customs regulations on the Pridnestrovian-Ukrainian border, causing Pridnestrovian companies to suffer losses and Pridnestrovie’s economy doesn’t function at the full rate of before March 2006."

The losses by local firms mean less tax revenue for the state, and hampers its ability to fund social programs such as hospitals, pensions and aid to low income families.

" - If no outside conditions had adversely affected our economy, then during the 2007 fiscal year Pridnestrovie would have been able to fully carry out all of its social responsibilities: paying pensions, salaries and all social benefits by the state to its citizens."

Parliament has focused primarily on maintaining the spending intact for the most vulnerable sectors of the population. In the field of social programs, which include free education and health care, as well as pension programs, the deficit has been reduced from 33 million US dollars to 1.9 million dollars. This means that pensions are virtually guaranteed to be paid on time, with little risk that the weakest parts of society will be adversely affected by the budget crisis.

Journalists from Pridnestrove, Moldova and Russia took part in the event held at the parliament building in Tiraspol, the capital of Pridnestrovie. (With information from vspmr.org)

See also:
» Yevgeny Shevchuk: "This situation doesn't help constructive dialogue and a search for solutions"