Moldova Emergency Response, Resilience, and Competitiveness DPO

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The development objective of the Emergency Response, Resilience and Competitiveness Development Policy Operation in Moldova supports Moldova’s efforts to respond to unprecedented challenges, while maintaining momentum on the long-term agenda of building resilience and enhancing competitiveness. Pillar 1 mitigates the impact of the war in Ukraine on refugees and households. The integration of refugees from Ukraine is important not only from a solidarity standpoint but for social cohesion in the host communities and economic resilience, given Moldova’s aging population. In this context, measures supported in Prior Action 1 (PA1) grant Ukrainian citizens the right to work in Moldova without the need to follow standard procedure for foreigners, while PA2 grants school-age refugees from Ukraine access to schools. Moreover, to mitigate the immediate impact of higher energy prices, PA3 supports an increase in the cold season benefit and expands the coverage of vulnerable families, while improving the design of the main social assistance program for future shocks. Pillar 2 builds resilience and enhances competitiveness to reduce vulnerabilities to future shocks. The 2021 SCD Update highlights the urgent need to build resilience and preparedness to mitigate the socio-economic consequences of shocks, and the need to enhance private sector competitiveness and economic diversification through the improvement of the environment to become more conducive to productivity, growth, and job creation. In this context, PA4 supports the increase of the capacity of renewable energy generation, including sustainable biofuels and biogas. PA5 supports the strengthening of the regulatory framework of the private insurance industry to rebuild trust in the industry by households and firms that need help to be better protected from unexpected shocks. PA6 supports the measures to establish the National Fund for Regional and Local Development to provide more efficient, effective, and transparent support to infrastructure projects, including in the critical areas of water and sanitation. PA7 supports the reorganization of the railway sector to play an increasing role in successfully integrating firms, consumers, inputs, and goods within the country with regional and global markets in a more sustainable manner. Also strategically supporting Moldova’s competitiveness in an era of rapid digitalization, as witnessed during the pandemic, PA8 supports the digitalization of public services to contribute not only to competitiveness by reducing the cost of dealing with public administration but also by reducing spatial disparities in public service delivery.