Oleg Budza, president of CNSM: Active fighting against informal economy will contribute to identify the necessary resources to carry out socio-economic reforms

Over 80% of Moldova’s economy is shadow, and the highest percentage of undeclared employment can be found in agriculture, construction, trade, hotels and leisure. About this says a study discussed at the meeting of the working group of the Economic Council by the Prime Minister Pavel Filip, 16 January.

According to Oleg Budza, president of the National Trade Union Confederation of Moldova (CNSM), although trade unions have previously insisted that the Government should apply more drastic methods to combat the shadow economy, the situation in this chapter is still one more than alarming.

In relation to the high level of informal economy and the common practice of payment of wages “in envelopes”, CNSM has repeatedly insisted on undertaking radical measures of combating these disastrous phenomena for Moldova.

In addition, during 2016, the subject was addressed at the meetings of the General Council of CNSM and the Confederal Committee of CNSM, after which there were addressed a series of requests to the Moldovan authorities to accelerate the process of combating the informal economy.

Thus, the requests have been sent to the President of Parliament, Prime Minister and Coordinator of the Executive Council of the governing alliance. You can find the documents here.

At the same time, trade unions have beaten the alarm about the issues linked to the informal economy and in discussions with civil society representatives, where they warned that the phenomenon is a challenge for Moldova and is a danger that threatens the economic security of the state.

In this context, in May 2016, trade unionists demanded to be increased the penalties for those who admit informal work conditions through amendments to the Contravention Code and the Criminal Code. The Ministry of Labour, Social Protection and Family elaborated such a project, but he was not promoted to a subsequent approval.

During a press conference organized last week by trade unionists from education, the leader of CNSM said that the purpose of making comprehensive reforms, such as those related to pension system reform, wages or labour relations, the country has the necessary resources and they are in the informal economy.

“Workers employed in the informal economy have more problems at work, for not receiving adequate protection, and when they reach retirement age receive a miserable pension because the employer has made minimal budget breakdowns. Why? Usually, in the dockets of the employee is indicated a salary of only 1900 lei. The employee receives the remaining money in envelope and it is a situation that can be seen in a very large scale in our country. How can reforms be made solely on account of the employees, when over 80% of the country’s economy is a shadow ?! “, emphasized Oleg Budza.

In the opinion of the trade union leader, the participation of the representatives of the employees at meetings of the working group of the Economic Council would contribute to finding solutions and effective mechanisms to combat the informal economy as operative.

We note that earlier this year was created the fourth working group of the Economic Council by the Prime Minister Pavel Filip. This working group will focus on identifying solutions to combat the phenomenon of “wages in envelopes” and informal employment. It includes the representatives of business associations, government authorities, donor community and national experts.

During the first meeting of the group were mentioned the main causes that led to the phenomena of the shadow economy in Moldova – corruption, mistrust in the public sector, cost and labour shortage, overregulation, and the advantages of this situation for both the employee and for the employer.

Representatives of the working group will consider in detail each component phenomenon, within technical subgroups.

Department of mass media and international relations