What’s Up with State Companies in Moldova?

The number of state-owned companies in Moldova ranges from 356 to 465, according to different sources. Such companies include public utilities, educational institutions, healthcare facilities, and cultural institutions. Their financial situation and performance has been deteriorating over the last decades. Therefore, the Moldovan Parliament intends to introduce a new approach in state company management. The proposed piece of legislation intends to introduce basic corporate management principles such as transparent financial management and accountability. (See more here: http://logos.press.md/Weekly/Main.asp?IssueNum=663&IssueDate=16.06.2006&YearNum=23&Theme=7&Topic=18736 )

However, the biggest challenge in implementing such a reform seems to be the obvious conflict of interest. The current management of state companies will have to change their quasi-transparent work habits overnight, which is very unlikely to happen. To enforce accountability and limit corruption, the plan is to have representatives from the Ministry of Finance and Ministry of Economy and Trade account for the majority of board membership. Therefore a major assumption is made: employees from these two ministries are exemplary enforcers of law, and are incorruptible. Unfortunatelly, this is a far-fetched assumption. Therefore, the question remains: Who will supervise the supervisor? My concern is that this piece of legislation, although apparently reformative, will fail to be implemented properly, and perpetuate the already anecdotally stagnant and reform-resistant governance in Moldova.